Detroit offers some sobering lessons for state to learn
Detroit, once a shining symbol of American invention and prosperity, is bankrupt.
The bankruptcy declared two weeks ago has been awhile in the making.
This sad development carries an instructive lesson. The city’s unions, so instrumental in the growth of the car industry decades ago, were founded on good intentions but eventually carried too much power. The result was a pension and benefits system that became too expensive for the car industry to sustain without pricing itself nearly out of the automobile market.
The dominance of the car industry was lost, but the benefits negotiated by unions still need to be paid. The population has dropped by two-thirds, so there is not the tax base to support the city’s needs amid high unemployment. It’s a snowball rolling downhill.
Meanwhile, barely a year after passing Right to Work legislation, the state of Indiana is more than $2.3 billion in the black and will be returning money to taxpayers.
There’s a lesson there for Pennsylvania, where prevailing wage laws and the lack of Right to Work legislation limit employment possibilities and fuel excessive public expenditures on a multitude of projects.
Which will it be, the sad depression of Detroit or the invigorating progress of Indiana?
Pennsylvania leaders need to decide quickly to rejuvenate economic development by reforming workplace laws. Far from disadvantaging workers, changes in the prevailing wage law and a move to Right to Work regulations would create more opportunity.
The alternative, as we look at the sobering example of Detroit, is not good.