Since the initial shock of Detroit’s filing for Chapter 9 bankruptcy this past summer, local residents and businesses have been largely left alone to deal with the implications of this drastic step. But Detroit’s organized Jewish community, concentrated mainly in the affluent suburbs, and largely untouched by the city’s financial demise, appears to be bucking this trend.
Jewish leaders and activists are taking on the fight of the city’s retired municipal employees. These retirees stand to lose much of their already minimal pensions if a federal bankruptcy court moves to pay other creditors at their expense, as the city has asked. Many of the Jewish activists see their stand as a way to support the future of Detroit and of urban America.
“The idea of cutting the modest pensions of rank-and-file firefighters, policemen, and water and sewage workers who had worked for 20 or 30 years seems unconscionable in terms of Jewish values,” said Andy Levin, a businessman and communal activist who heads Project Micah, Detroit’s interfaith initiative.
The fate of 21,000 former city employees’ pensions, and those of another 9,000 current workers, will be determined by a bankruptcy court that convenes at the Theodore Levin United States Courthouse, named after Levin’s own great-uncle.
Right now, the court is considering Detroit’s July 18 request for bankruptcy protection. The city says it is unable to continue servicing nearly $20 billion in debt, including $3.5 billion in pension liabilities and more than $6 billion in health care benefits for retirees — part of the commitment the city made to its workers in labor contracts with city unions.
Representatives of the unions have argued that Michigan’s state constitution specifically forbids making changes to retiree pensions or health benefits. They say this should put their members first in line for compensation under the eventual bankruptcy plan, ahead of the city’s creditors. The city’s governor-appointed emergency manager, Kevyn Orr, does not deny that this is the meaning of the constitutional provision they cite. But he says that U.S. federal bankruptcy laws trump the state constitution.
If the court approves the city’s bankruptcy plan, Detroit will implement draconian cuts that will take away an estimated 70% of the retirees’ monthly pension checks. Local unions have warned that pensioners living on fixed incomes that average $30,000 per year will be devastated.
The court’s decisions regarding the rights of former city employees will have little to no relevance for the daily life of most Detroit Jews, but Jewish activists have taken on the issue as a social justice cause. Jewish leaders frame their aim as not only saving the workers’ pensions; they cite the greater issue of urban renewal in Detroit and, by extension, other struggling American cities.
“Our engagement has been on the broader level,” said Robert Cohen, executive director of the Jewish Community Relations Council of Greater Detroit. Cohen stressed “the need for a national and local urban issues agenda, and the impact that an interfaith coalition could have on it.” The group will host a discussion on the issue in the coming weeks in Detroit.