UPDATE: Here’s what the SEIU has to say about leaders of 19 city bargaining units grabbing at the deal to avoid layoffs: “While public workers across the country are being forced to take layoffs,
furloughs and pay cuts, and residents suffer drastic service cuts, Los Angeles
has the chance to lead again by embracing a solution that creates long-term
fiscal stability, prioritizes direct service and invests in the future
workforce.” Full Text
DETROIT — Out in the prosperous suburbs northwest of Detroit, the
first days of summer are glorious with warm sunny days and gardens in
bloom even as the auto industry that feeds the region’s wealth teeters
on the brink of collapse.
In the heart of this once great city, there is nothing but the
smell of decay. Houses sell for less than $5,000, one in four people
are unemployed, whole neighborhoods are returning to a state of nature
unseen since the first settlers came here.
And as is usual in such cases, those who have failed offer versions of the same excuse: If we knew then what we know now…
I can’t help seeing the parallel with my town given my obsession
with trying to get the leadership of LA to learn from the mistakes we
and others have made that have led to the decline of great cities, the
destruction of the middle class and the separation of our communities
like you see here in the difference between Detroit and its wealthy
And yet I see City Hall’s leadership doing what they have done for
so long as they created the city’s financial crisis and continue to
repeat the mistakes of the past.
The deal on the table with the city’s unions guarantee, that short of
an economic miracle, LA will soon be just as bankrupt as Detroit is
today, that the disparity between rich and poor will grow and the
middle class shrink, that suburbs will thrive in and the inner city
My friend Karen Kanter foreshadowed the future in a new comment on
a piece I wrote entitled “What Price Labor Peace…”on City Hall’s
buyout plan to reduce the payroll.
“If this goes through, I
think we can count on our mayor to say next year or the year after
that: ‘No one could have predicted these kind of budget shortfalls.’”
For all the talk about no pay raises (for everyone except the DWP) and furloughs and layoffs, what’s on the table is an early
retirement package that lets city workers get enhanced pensions with
lifetime health benefits and voluntary leave at age 55 with as much as
a $33,000 cash payoff for many.
Eliminating 2,500 jobs through early retirement plus 1,200 others
that are vacant and deferring pay raises will allow city officials to
achieve a balanced budget on paper.
Think about it: If you’re 55
and the boss will pad your pension up to 75 percent of your highest
salary or even 90 percent for police and fire and give you a bundle of
cash, would you be delighted to retire and go fishing?
Certainly those the mayor called “deadwood” will jump at this deal
but so will many others whose knowledge and skill is irreplaceable.
unions price for this deal is to raise their contribution level from 6
to 6.75 percent — still a third less than Social Security deductions
in the private sector — and waiting two years to start getting raises
every six months to make them whole as if this was all just a terrible
“Once that two-year period is over, however, those same workers
would receive six pay increases between July 1, 2011, and Jan 1, 2014,
ranging from 2.25% to 4%, most of them delayed from their current
contract,” according to a draft proposal obtained by David Zahnisher in
the Times. “Those workers also would receive an extra cash payout equal
to 1.75% of their salaries in 2012 and 2013.”
This is a fantasy that will become a nightmare.
City and union officials know this. So who are they kidding? The public obviously but city workers as well.
inability to face reality is why the city kept giving big raises and
increases in benefits for years. And now that the bills have come due,
they still don’t have the courage to face the truth that city
government costs too much and delivers too little.
When this deal blows up it will be because the soaring cost of city
pensions and payrolls is unaffordable. We will never be able to pay for
these bills. We will face even more severe cuts soon enough and city
services will continue to decline and cause further erosion in the
city’s economic base.
It’s not a mystery. It’s what has happened to Detroit and other
cities in decay and it’s what has been happening year after year in LA.