A coalition of 30 labor unions representing Detroit workers ratified new sell-out contracts this week in hopes of averting the imposition of an emergency financial manager by Gov. Rick Snyder. Under Michigan’s Emergency Manager law (see here, here and here), the governor can dissolve union contracts, abolish collective bargaining and fire elected officials when a city or municipality is deemed a financial failure.
The unions agreed to accept 10% pay cuts, layoffs and changes to city pensions, according to MSNBC. As has become the norm for unions lately, Detroit’s city unions have completely forgotten their reason for being: to improve the working and living conditions of their members. Union officials said they were willing to help save their city from financial meltdown, but apparently forgot that their members were not the cause of the city’s financial woes, which are the result of lost revenue due to the financial crisis, mismanagement, a declining population and tax base, and politicians’ unwillingness to tax themselves and their wealthy friends at a rate that could keep the city in the black.
The unions’ concessions not only contribute to the immiseration of their members, but they won’t even necessarily save their jobs or their union contracts. Under the agreement, Detroit would save about $54 million per year from the concessions, which is less than half of what Mayor Dave Bing had hoped for. Thus, a financial manager could still be imposed, union contracts abolished, and pay and benefits reduced even further.
Indeed, Terry Stanton, a spokesman for Gov. Snyder, said "The state's concern is that the agreement does not generate the savings needed to address (Detroit's) long- and short-term crisis."
When Detroit Mayor Bing called the labor agreements historic he was not far from the truth. Unions have been giving away more and more over the years, but in this case they gave it away without getting anything tangible in return. Furthermore, it significantly improves Bing’s chances of being appointed the new financial manager, which would give him greater flexibility to bust the unions and privatize public works.