When selecting a setting for his nbc sitcom The Office,
Executive Producer Greg Daniels decided on Scranton, Pennsylvania, in
part because the city is typical. The Emmy-winning show wanted to
ridicule American corporate life, and needed a typical American city to
let the mockery happen in. Scranton embraced The Office, and has enjoyed nationwide recognition as a result of the hit show’s setting. But now, the former coal town is making headlines for a very different reason.
Last Friday, the city of Scranton sent out paychecks to its
employees, as it does every two weeks. But these checks were for amounts
significantly smaller than usual because Mayor Chris Doherty reduced all city employees’ pay—including his own—to the state minimum wage of $7.25 an hour.
After sending out Friday’s checks, Scranton had only $5,000 left in
the bank and still owed its 400 employees almost $1 million.
Scranton’s police unions, firefighters’ union and public works
unions have taken the city to court over the reduced pay, but Doherty
says he has no other choice because the city is broke. His planned
solution is to immediately raise taxes by 29 percent, and by 78 percent
over the next three years. But the council wants the city to instead
borrow money to solve Scranton’s fiscal woes.
On Monday, Mish’s Global Economic Trend Analysis said, “It should be perfectly obvious to every soul on the planet that Scranton is bankrupt. Tax hikes are not the answer. The solution is filing bankruptcy with the hope of killing public union wages and benefits.”
But like many other states, Pennsylvania has rules in place that
prohibit cities from filing bankruptcy without approval from the state. Mish’s
final assessment is that “Inept city management, with public union
wages and benefits at the heart of it, killed Scranton.” Whether or not
Pennsylvania is prepared to admit it, Scranton is bankrupt, and the
tensions there are rising.
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