Skip to comments.Detroit: The Triumph of Progressive Public Policy
Posted on 02/14/2012 6:04:39 AM PST by MichCapCon
Imagine a city where all the major economic planks of the statist or "progressive" platform have been enacted:
*A "living wage" ordinance, far above the federal minimum wage, for all public employees and private contractors. *A school system that spends significantly more per pupil than the national average. *A powerful school employee union that militantly defends the exceptional pay, benefits and job security it has won for its members. *Other government employee unions that do the same for their members. *A tax system that aggressively redistributes income from businesses and the wealthy to the poor and to government bureaucracies.
Would this be a shining city on a hill, exciting the admiration of all? We don't have to guess, because there is such a city right here in our state: Detroit
Detroit has been dubbed "the most liberal city in America" and each of these "progressive" policies is alive and well there. How have they worked out?
In 1950, Detroit was the wealthiest city in America on a per capita income basis. Today, the Census Bureau reports that it is the nation's 2nd poorest major city, just "edging out" Cleveland.
Could it be pure coincidence that the decline occurred over the same period in which union power, the city government bureaucracy, taxes and business regulations all multiplied? While correlation is not causation, it is striking that the decline in per capita income is exactly what classical economists predict would occur when wage controls are imposed and taxes are increased.
Specifically, "price theory" predicts that artificially high business costs caused by excessive regulation and above-market labor compensation rates imposed by so-called "living wages" will lead to an increase in unemployment. Detroit's minimum wage is more than $2 above the federal minimum wage; and pressure groups are pushing for more. Additionally, any company contracting with the city must pay its employees $11.03 an hour if they offer benefits or $13.78 an hour if they do not.
Such high wage mandates are especially hard on individuals with a poor education and low skills. If struggling and heavily taxed businesses cannot pay such high wages, then they are more selective about the few workers they do hire or simply go out of business altogether. Those who have promulgated these polices may be well-intentioned, but mainstream economists have warned for decades that such policies were very likely to bring about the abject poverty and unemployment that characterize Detroit today. The city has the highest unemployment rate among all large U.S. cities.
A similar pattern has played out in public education. It is now conventional wisdom among the political class that higher pay for teachers and increased spending per student lead to improvements in teacher quality and student performance - Detroit Public Schools strongly suggests that this theory must be rejected. It has chronically underperformed state averages, yet reforms are vehemently opposed by the system's powerful school employee union.
At the same time that union, the Detroit Federation of Teachers, has won rich salary and benefits packages for its members. Detroit spends one of the highests amounts of money per student nationwide and the district's spending per pupil is eighth highest out of Michigan's 551 school districts. For all that, by almost any measure Detroit schools have for decades failed their students: test scores, safety, drop out rates, etc. Detroit's public school students perform among the lowest in the state. On a 2009 test for urban districts from the U.S. Department of Education, DPS students performed "barely above what one would expect simply by chance, as if the kids simply guessed at the answers."
In the private sector such failure would result in mass firings for unsatisfactory performance. No doubt such a response would be condemned by the progressives who support the school employee unions that have made similar actions impossible in their institutions, and have opposed major transformation at every turn.
For example, in 2003 philanthropist Bob Thompson offered $200 million to build 15 charter public schools in the city in which he would guarantee a 90 percent graduation rate. In response, the DFT balked because charter schools are not unionized. The outcome was that the union jobs trumped better outcomes for children.
People vote with their feet, and all the above suggests why, over the past decade, DPS has lost about 10,000 students each year to charter, independent and suburban schools.
Of course it would be unfair to place all the blame for the city's decline on public employee unions. Detroit is home to the Big Three, whose contracts with their own powerful unions provided the model for those public employee arrangements. The UAW successfully extracted wages and benefits estimated at $73 per hour before the recent shake-ups began.
This is about $25 more per hour than the amount foreign-owned U.S. auto manufacturing plants pay their non-unionized American workers. Due to this disparity, Japanese car companies earn some $1,000 to $2,000 more on each car sold than their American counterparts. The outcome has been a relentless loss of market share that, among other things, has devastated the economic engine that once powered Motor City prosperity.
In addition to being a model of progressive economic, labor and education policy, Detroit is also a case study in welfare statism. Tom Bray, former editorial page editor for The Detroit News, has made the following observation:
"Detroit, remember, was going to be the 'Model City' of Lyndon Johnson's Great Society, the shining example of what the 'fairness' of the welfare state can produce. Billions of dollars later, Detroit instead has become the model of everything that can go wrong when you hook people on the idea of something for nothing - a once-middle class city of nearly 2 million that is now a poverty-stricken city of less than 900,000."
Today, Detroit is down 25 percent over the past 10 years; to just over 700,000 and dropping fast.
Progressives will complain that this portrait oversimplifies the factors involved in a great city's decline. Perhaps it does, but with this question in mind: At what point does the weight of evidence and logic make it impossible to avoid concluding that in the case of Detroit, correlation is causation?
Most animals don't foul their own nest.
no, no, don’t worry: Eastwood tells us that Detroit is back!
Readers of this can’t cry racism; no mention of demographics at all.
Democrats - ruin it and run away.
Remember, the Liberal “progressive” mindset is always set to DENIAL. Never ask the question whether the intended goal was achieved (or even if it was attainable), it's all about good feelings and the appearance of good works. Performance metrics are never mentioned and discouraged in the harshest ways possible.
The idiots running Detroit will NEVER learn and so Detroit must die in order to be reborn. Whether or not it can ever be reborn is another matter. It will never happen if attitudes and the current reasons for the destruction of Detroit do not change. The main thing is for the State of Michigan to allow Detroit to fail and not get sucked into oblivion along with the whirlpool called Detroit.
Once the left has power, dissent is not tolerated.
These worthless LIBs are the termites attacking civilization. Relentless, purposeful, destructive.
Detroit is considered “The Most Liberal City in America!”. Gary, In., is the 2nd most liberal.
I wonder why our lib friends don’t move to these paradises of Socialist Rule, enmass?
Us here in the Detroit ‘burbs are watching as it only a matter of weeks now before the State of Michigan takes over Detroit with the new Emergency Manager law.
When that happens it becomes racist!
Considering Detroit has been selecting its population for the laziest, stupidist, most ignorant, and above all the most dependent, and having run off all of the hard working and innovative, I'd have to say a rebirth is highly unlikely. When the bulk of you population is hard core welfare, and has a bone deep sense of entitlement, no skill and no desire to do anythin except drink, do drugs and screw out more welfare babies you have no labor pool. If you combine this with punishing any innovation or attempts to legitimately make money by taxation and regulation, then all you'll get is more lazy parasites thinking that the rest of the country owes them something. For the most part these people can't be salvaged.
Poverty is a lifestyle choice.
“And yet Americans still vote for Liberals and liberal policies that wrecked not only Detroit, but Cleveland, Oakland, and a host of other cities.”
You succinctly capture one of the core tenets of why conservatives are smart, and conservative, and why leftists are addicted to their own weaknesses. Place a table in front of a drug addict. On the table place just enough drugs to get them through a few days on the way to their ultimate destruction and also place a package marked “health and freedom from addiction”. The druggy will take the drugs every time, just like the leftist will almost always take the meager gov’t handout with its eternal chains.
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