AFL-CIO President Richard Trumka said Thursday reiterated his opposition to cutting Detroit city workers' pensions despite the fact that the city was forced into bankruptcy. Trumka didn’t dispute the city’s financial situation but argued that cutting those workers’ retirement pay was the wrong way to start and would be an “abuse of the bankruptcy law.”
“Do you know what the average pensions in Detroit are? $19,000. Not outrageous at all,” Trumka asked reporters at a breakfast hoisted by the Christian Science Monitor.
He further said that it was the city’s bondholders who were pushing for the cuts: “The bondholders know that if the workers take a haircut that is more they (the bondholders) get.”
Big Labor is fighting the effort to trim the Detroit pensions in court, arguing that is illegal under the Michigan constitution. Most legal analysts believe federal law will trump that. The city has an estimated $20 billion in accumulated debt.
Some labor officials have called for a full bailout of Detroit. Trumka indicated Thursday he was of a like mind. He said it didn’t seem fair that the banks got bailed in 2008 but the feds won’t bail out the city.