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WSJ Senior Economic Writer Steven Moore on cities such as Miami declaring “financial urgency” or “financial state of emergency“ in an effort t...
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Ago we were one of the first to report -- city of North Las Vegas declaring a state of emergency and ordered his suspend collective bargaining with the unions now Miami is following hot on its heels and declaring financial urgency of their own.
With city officials using this new tactic to wiggle out of financial obligations with its workers -- this trend going to change the unions grip on America.
With me now is Steve -- the wall.
Analysts -- economics -- -- reporter Steve thank you so much for coming back we appreciate your time.
-- -- -- this new trend right this state of emergency state of urgency it's a new way to get out of these contracts do you think we're gonna see more and more cities doing it.
That's exactly what it is in these cities what's gone on in Miami by the way is a big city used to be small cities that -- to on this -- -- thank.
-- we got one of the ten biggest cities in the United States that's declared a financial state of emergency.
I -- it is in large part because of the unions and it's not so much the wages and salaries as you know -- say it's really the health care benefits.
And the pension benefits -- people -- retired while working for the city any longer.
And you gotta blame -- the politicians not of today but the winds of 51020 years ago lot the end of these supergenerous.
Pensions and health care plans and the problem for a city like Miami was seen a lot of cities inside -- for in the same thing.
They just can't afford to pay those -- or else they're gonna have to slash their school budget.
In other prison budget -- court budget their police budget and that's what it's come to for any yachts and cancer question Melissa yeah -- a trend I see happening.
All around the country you know -- -- some countries.
Declare bankruptcy.
This new -- they had never seen this before declaring a state of emergency this kind of a new tactic.
Yeah which is gonna be more effective because we've seen the bankruptcy sting on the rise as well do you think -- state of emergency or urgency.
You think it's gonna work better I mean you have any idea.
You know 810 it it depends on what the courts decide you know that the reason that cities declare.
Bankruptcy is it north highs -- The existing contracts and then you can.
You can renegotiate and there's like auto companies tried to deal I don't know the real question here must say is if cities declare an emergency.
Well the courts allow them then to invalidate these contracts we don't know the answer that question yeah that's clearly the gulf.
-- isn't meet you feel bad for the city workers to.
You know took a job and entered into a promise where they were gonna work for period of time they were promised these benefits of the -- want it and that is without question not fair that they worked.
Thinking they -- gonna get these benefits at the same time.
I mean it was more of a -- that a promise because there's no way to pay -- mean if you look at Miami.
Big gap they have this huge gap I think its sixty million dollars they have but that's just right now and it gets worse over time.
80% of their budget is going to pay labored at play pay employees actually -- -- like that.
The -- and I'll just give me an example let's say a city of the last hope California which a few years ago declared bankruptcy.
When I -- the city manager there he said that they have to people collecting retirement benefits.
For every person is working hard army private business is not -- could do that.
You know -- private business in America would be out of business if they had -- you know these enormous benefits that they have to pay.
For shrinking workforce without really the people get hurt by this also are the current union workers because cities can't pay as much they have to lay off workers and teachers because so much so much of the budget is going to people aren't even working in the city and don't -- -- -- -- starting -- -- -- the city any longer.
Yeah actually did is an inflection point and we are we seeing a real change in America -- now.
Yeah yeah I think you did you know you saw what happened in some of these key -- since the cities like San Jose earlier this year where people finally says enough is enough.
We can't afford to pay these benefits there'd -- -- don't look it would be one thing to pay somebody affair about a fence you know that go up health care about a -- a retirement benefit but as you know -- you -- the story these benefits were talking about are twice as generous.
As what a private sector G matter a private sector bus driver got.
That's the fairness issue why should they be paid so much more in these benefits then the private sector worker living right down the street yeah.
The always brilliant Steve Moore he has great hair what more could you want thanks coming -- Melissa greatest -- grew.
