Today, the United States Bankruptcy Court is in the midst of hearing a case to determine whether Detroit’s Chapter 9 bankruptcy filing is a legal option to deal with their struggling economy.
A group of retired police officers, firefighters and public employees filed the lawsuit claiming the action is ultimately in violation of the Michigan State Constitution, as it would cut workers’ pensions.
While some deem the move a viable option to deal with the city’s struggling economy, as reports say unfair manufacturing competition and restrictive labor laws are at the root, the city will soon find out if they can be granted a new footing.
Whether the suit protects their pensions or not, the city has to come up, once again, with a way to build their future economy.
In New York City, Wall Street provides a deeply rooted financial engine, making the same demise unlikely, but what happens when we too fall into a neverending economic endeavor?
Detroit once made up for nearly all of the country’s automotive manufacturing businesses and built a steady “reliable” system for its economic foundations, however it was inevitable that this could not last.
Although it doesn’t seem like NYC isn’t headed for bankruptcy anytime soon, it is likely that the way business is being done will change. Comptroller John Liu and Public Advocate Bill de Blasio are both running for mayor and also both accuse the Bloomberg administration for punishing small businesses with hefty fines and arbitrary violations, is it possible mom and pops may close for good?
Liu takes it a step further and calls for city government to put an end to tax subsidies for big business in an attempt to save money and prevent having to fine small businesses.
The power that NYC has is the middle-class, and while it is shrinking, the small business owners keep competition in check.
However, if New York becomes more like Detroit, with one or a few main industries with few entrepreneurs and start-ups, it may face the same fate as the failed auto industry. Even with a bailout.