Detroit, Where Public Employment Booms


This just in from Detroit: Lack of private enterprise is detrimental to city survival, no matter how many art collectives pop up in long-abandoned homes. Michigan's Mackinac Center for Public Policy has the scoop, gleaned from the city's most recent financial report:  

The report lists the number of jobs provided by the city's largest employers, which indicates how sensitive its finances are to the actions of a particular firm. In Detroit's case, six of the top 10 employers are not private businesses at all, but government entities: public schools, the city government, the U.S. government, Wayne State University, the State of Michigan and the U.S. Post Office. Two others are health care providers intrinsically tied to government policy, the Detroit Medical Center and the Henry Ford Health System.

The remaining two are automaker recipients of federal bailouts, GM and Chrysler.

Detroit is showing a $155 million budget deficit, despite borrowing $255 million last year. The city government still boasts an 70 departments and agencies, of which several provide redundant services to the mayor and City Council. The roads are falling apart, and the school system is saddled with a $327 million budget deficit, which will require shuttering half the schools in Detroit.

But wait, there's good news! The city met its audit deadline for the first time since 1997 and received $207 million in stimulus funding for police, new buses, and assistance for the homeless. The Pistons might be moving downtown, hopefully driving casino traffic; the employment rate went up 3 percent last year; and that eternal savior of decaying downtowns, light rail, just got a $25 million boost from the feds.

Incidentally, Chicago has an even higher concentration of public sector jobs, with nearly 175,000 in the city working for either the school district of federal, state, county, and city governments. Might be time to think about lowering that nation-leading tax burden. 

Read more from Reason on America's cities here.