The pension crisis and the dying Fordist economy have joined forces to sink another US city. Looking to plug a massive hole in its budget the city of Flint, Michigan, went for the nuclear option, firing 20 percent of its employees and restructuring its public services through a mix of cutbacks and outsourcing. The plan worked: The city has broken even, albeit at a terrible price. Bloomberg reports:
It’s…approaching the point at which it can’t function as a city. That’s the assessment of Edward Kurtz, its emergency manager. Without reliable revenue to replace dwindling property and income taxes and state funding, the birthplace of General Motors Co. (GM) won’t be able to support its citizens, even if its books are square, Kurtz said.Today, hundreds of acres of bare concrete remain where plants once stood, and neighborhoods are scarred by vacant and boarded-up homes. Almost a quarter of the housing units are vacant, according to the U.S. Census.For those who remain, life is dangerous. Flint had the highest rate of violent crime in 2011 among U.S. cities with 100,000 or more residents, and Detroit was second, according to the FBI.
The factors that devastated Flint are complex. There, as across the whole country, generous pension promises made by yesterday’s pols played their part. The city was forced to fire many of its public employees because it couldn’t afford to pay off its pension debt.But the collapse of the manufacturing industry was an even larger factor. GM has long been the city’s largest employer, and the company’s huge personnel cuts gutted the local economy. The number of GM employees in the city has fallen from 80,000 in 1978 to 7,500 today. The state clearly needs to do more to bring some of these jobs back, but it’s hard to imagine it can bring back enough to return Flint to its former vibrancy, particularly when the city can barely afford to provide basic services.Oh, and there’s another city not far away from Flint that is suffering from many of the same problems. Is this where Detroit is headed?