DETROIT, July 26 — There are many lessons to be learned from the city of Detroit being forced into bankruptcy. The bosses and the media they own would have us believe that good wages, health care and pensions are the cause of every financial crisis. But the Detroit bankruptcy is an attempted “Smash and Grab” by the bosses to steal $3.5 billion in city workers’ pensions and $5.7 billion in retiree health care. The bankruptcy will enable a federal bankruptcy judge to impose further cuts to city services and to void union contracts.
If they pull it off here, there is an estimated $3.5 trillion in city and state pensions around the U.S., $134 billion in New York City alone. With union leaders committed to their bosses’ success and politically wedded to the profit system, the bosses have driven down wages, destroyed private-sector pensions, doubled the “normal” unemployment rate, attacked the pensions and healthcare of retired auto and steel workers, and are out for more. Every attack can be “doubled” when applying it to black, Latino and immigrant workers. Which brings us to Detroit, with an 80% black population.
Charlei LeDuff of the Detroit Free Press wrote in the New York Times (7/25), “Of Detroit’s debt of at least $18 billion, about $7 billion is secured by collateral like casino revenues and utility taxes. That means creditors — read: big banks — will get paid. Of the remaining $11 billion or so in unsecured debt, about $9 billion is owed to retirees and current municipal workers…These debts come in the form of promised pension checks and health care benefits, all backed by a false, unsecured promise. These are the people who are likely to lose out.”
Thanks to the Bush and Obama bailouts and billions in UAW concessions, the auto bosses and bankers are once again making billions in profits. Yet Detroit is a hollowed-out shell. Banks and auto companies make profits, cities don’t. The latter provide services, and that costs tax money. Soaring racist unemployment, half the population it had in 1970 and lower wages all add up to reduced income tax revenue. The bosses and Obama are not about to bail out Detroit.
Chrysler’s Jefferson North plant on Detroit’s east side, in the midst of mass poverty and surrounded by barbed wire, is producing $2 billion in annual profits (NYTimes, 7/15). Most workers in the plant make $12/hr. and have no pension, reduced health care, and the union is in the midst of a 5-year no-strike contract. These workers cannot afford the $50,000 Grand Cherokees they build. When they go home, many have no street lights. If anyone in their family should have a medical emergency, they cannot count on an ambulance showing up.
The racist profit system can never guarantee a future for the international working class. For decades, Detroit and its auto workers led the whole working class in winning a higher standard of living, from decent wages to home ownership, from retirements you could live on to some of the best health care coverage for U.S. workers. These hard-won advances often required violent mass struggle, from the 1937 Flint Sit-Down Strike to the 1967 armed rebellion against racist police terror. These victories have been wiped out. As long as the bosses hold power we will be fighting for crumbs and that can never be guaranteed. Only a PLP of millions leading tens of millions more can crush the bosses and build a communist society to meet the needs of the international working class.