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Detroit: The Triumph of Progressive Public Policy (How's the most liberal city in the USA doing?)
Mackinac Center for Public Policy ^ | 7/6/2009 | Jarrett Skorup

Posted on 07/06/2009 10:07:13 AM PDT by SeekAndFind

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.

* A powerful government employee union that does the same for its 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 are 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 a whopping $7.40 an hour, more than $2 above the federal minimum wage when it was enacted; and pressure groups are pushing for more. Additionally, any company contracting with the city must pay its employees $8.23 an hour if they offer benefits or $10.28 an hour if they do not offer benefits.

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 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. (On a side note, Michigan is home to eight of the 20 cities overall with the highest unemployment and has the highest state unemployment in the country.)

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. Again, correlation is not causation, but 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. Median compensation for a DPS teacher is $76,000 and Detroit spends the third highest amount of money per student among 76 large cities nationwide. Statewide, Detroit's spending per pupil is in the 91st percentile and DPS teachers are paid at the 96th percentile. For all that, by almost any measure Detroit schools have for decades failed their students: test scores, safety, drop out rates, etc. For example, Detroit's public school students perform at the 3rd percentile in the state - that is, they are in the lowest 3 percent, and the district is in its second state takeover in a decade.

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 $71 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."

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?

#####

Jarrett Skorup is a 2009 graduate of Grove City College with a dual major in history and political science. He is a research intern at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.


TOPICS: Business/Economy; Constitution/Conservatism; Culture/Society; Editorial; US: Michigan
KEYWORDS: bluezone; cities; detroit; leftists; liberalism; urban

1 posted on 07/06/2009 10:07:13 AM PDT by SeekAndFind
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To: SeekAndFind

Hey, California has many of the same/similar laws, and they’re doing just great!

/sarc


2 posted on 07/06/2009 10:10:31 AM PDT by papasmurf (Save us from 0bama, I prayed. Then I heard, "the 2nd, I saved")
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To: SeekAndFind

In Year 2 of Presidential Hell, The First Thug should relocate all D.C. operations, buildings, etc. to Detroit. It seems suitably symbolic and accurate.


3 posted on 07/06/2009 10:11:33 AM PDT by kromike
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To: kromike

Byrd has already moved them to West Virginia


4 posted on 07/06/2009 10:13:55 AM PDT by BilLies
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To: SeekAndFind

it should be pointed out though that Michgan’s unemployment rates have historically run high because the UAW contract provides for sub-pay to supplement UI benefits to 95% of base pay (leading to a stampede of workers to take layoffs....er, ah....13-week paid vacations)


5 posted on 07/06/2009 10:15:05 AM PDT by Buckeye McFrog
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To: SeekAndFind

Detroit is an absolute mess and the powers that be will not take the necessary steps to change it. But the folks fleeing the city bring their problems with them. The inner ring suburbs are going to hell and the folks with money are moving to get away.


6 posted on 07/06/2009 10:15:25 AM PDT by Feasor13
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To: SeekAndFind

Racist cracker.


7 posted on 07/06/2009 10:15:40 AM PDT by noblejones (<deprecate>Ben Stein 2008.</deprecate> Sarah 2012, 2016, 2020.)
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To: SeekAndFind
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.

I giggled, although I was disgusted at the same time.

Amazing << Hear this. Feel this, and tell me that this isn't music.

Oh, dear...


8 posted on 07/06/2009 10:18:37 AM PDT by rdb3 (The mouth is the exhaust pipe of the heart.)
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To: SeekAndFind

The best thing Obama can do to fix Detroit now is convince the Russians to lob a nuke at it.


9 posted on 07/06/2009 10:21:56 AM PDT by Bon mots
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To: rdb3

Detroit was THE city that introduced black America to the middle class.

And they killed it.


10 posted on 07/06/2009 10:22:13 AM PDT by SJSAMPLE
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To: SJSAMPLE

The Marxist Laboratory© had to kill it.

Amazing << Hear this. Feel this, and tell me that this isn't music.

Oh, dear...


11 posted on 07/06/2009 10:26:57 AM PDT by rdb3 (The mouth is the exhaust pipe of the heart.)
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To: SeekAndFind

Thank god for Mackinac!


12 posted on 07/06/2009 10:35:03 AM PDT by dr_who
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To: SeekAndFind

You have to be in denial to think that “liberalism” or “progressivism” actually work.


13 posted on 07/06/2009 10:36:45 AM PDT by popdonnelly (The Democrats have returned to their game of supporting totalitarian regimes. Now they're muslim.)
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To: Bon mots
The best thing Obama can do to fix Detroit now is convince the Russians to lob a nuke at it.

Well, Hiroshima and Nagasaki are thriving cities in Japan. One huge difference --- The people living in these cities are not similar to those in Detroit.
14 posted on 07/06/2009 10:38:45 AM PDT by SeekAndFind
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To: SeekAndFind

BFL


15 posted on 07/06/2009 10:42:29 AM PDT by Skooz (Gabba Gabba we accept you we accept you one of us Gabba Gabba we accept you we accept you one of us)
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To: Springman; sergeantdave; cyclotic; netmilsmom; RatsDawg; PGalt; FreedomHammer; queenkathy; ...
Image and video hosting by TinyPic

If you would like to be added or dropped from the Michigan ping list, please freepmail me.

16 posted on 07/06/2009 10:47:08 AM PDT by grellis (I am Jill's overwhelming sense of disgust.)
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To: Bon mots
The best thing Obama can do to fix Detroit now is convince the Russians to lob a nuke at it.

No I say we invade Canada and force them to take Detroit. Heck just bring in the big dredges like they used to dig the Panama Canal and reroute the river to the other side of the city. Detroit is already North of the Canadian border so let them have it.
17 posted on 07/06/2009 11:03:54 AM PDT by GonzoGOP (There are millions of paranoid people in the world, and they are all out to get me.)
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To: SeekAndFind

The only thing that stops this is people whom prevent it on a federal level.


18 posted on 07/06/2009 11:05:35 AM PDT by Rick_Michael (Have no fear "President Government" is here)
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To: SeekAndFind

Bookmark later


19 posted on 07/06/2009 11:43:13 AM PDT by Popman (Joe Biden REALLY can't be Vice President, can he ?)
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To: SeekAndFind

no gubmint program is ever a failure, it’s just “underfunded”.

ask any libtard.


20 posted on 07/06/2009 11:53:32 AM PDT by WOBBLY BOB (ACORN:American Corruption for Obama Right Now)
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To: Bon mots

The best thing the State of Michigan can do is shut the place down, declare it “The Ruins Of Detroit State Park”, and charge admission to see it.


21 posted on 07/06/2009 12:06:44 PM PDT by Mountain Troll (My investment plan - Canned food and shotguns)
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To: SeekAndFind
Well, Hiroshima and Nagasaki are thriving cities in Japan. One huge difference --- The people living in these cities are not similar to those in Detroit.

Details... details...

22 posted on 07/06/2009 12:09:01 PM PDT by Bon mots
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To: SJSAMPLE
Detroit was THE city that introduced black America to the middle class.

And they killed it.

They need to get Marion Barry in there!

23 posted on 07/06/2009 12:10:40 PM PDT by Bon mots
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To: SeekAndFind

I propose we get some of those new army anti-ambush vehicles prep em up a bit and make them tourist tour cars. As we drive thru some of Detroit’s more “vibrant” (lefty code speak for do not move there) some of the locals can pop some caps at the vehicle for realism’s sake. (the pistols will be 9mm so no one gets hurt)


24 posted on 07/06/2009 2:15:10 PM PDT by junta (I am the son of Yacub, who for one welcomes my new overlord Obama.)
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To: SeekAndFind
Detroit - Civilization in reverse.

Worse, under the statists it could happen nationwide.

25 posted on 07/06/2009 2:54:58 PM PDT by Jacquerie (That to secure these Rights, Governments are instituted among Men.)
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To: SeekAndFind

26 posted on 07/06/2009 3:58:53 PM PDT by Vince Ferrer
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To: SeekAndFind

Detroit is not “the most liberal city in America.” You could never get the population to observe the kind of environmental recycling laws they have in Toronto. The only U.S. city where they can enforce that kind of crap is Seattle.

If course, Toronto would not be able to enforce their draconian recycling laws if they couldn’t export all their garbage to Michigan.


27 posted on 07/06/2009 6:36:22 PM PDT by Alouette (Vicious Babushka)
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