For more than three decades, firefighters like Larry Newberry risked their lives saving residents and buildings from fires in Detroit. But now, with Detroit declaring bankruptcy, the city could drastically cut the pension he lives in order to reduce its debts.
Workers’ compensation attorneys say that Newberry is typical of retired city workers who will suffer from the cuts. At 65 years old now, Newberry says he ran calls to at least 3 or 4 fires a day that ravaged the city for years (including a high incidence of car fires). He sustained various workplace injuries that required reconstructive surgery for his hand and knee, as well as a hip replacement. While most of these were typical workers’ compensation injuries, some were designated as third party claims, further complicating the ordeal he lived through. Following Newberry’s retirement in 1995, he went to work for Procter & Gamble, but is currently unable to hold down a job.
The Detroit resident gets by on his $34,000 per year pension (on which he still has to pay federal and state taxes), and a $200 monthly Social Security check. Because Detroit firefighters didn’t participate in the Social Security program, his check is based solely on his short amount of time working in the private sector.
In its heyday, Detroit was the centerpiece of American auto manufacturing and industrial innovation; but with yesterday’s announcement, it has earned a new distinction, becoming the largest U.S. city to file for bankruptcy. Residents have been apprehensive about the filing for months, and now face an uncertain course that will likely involve Employment Attorneys predict will lead to lay-offs for municipal workers, auctioning off assets, hiking fees and cutting back basic services like trash collection and city police.
Governor Rick Snyder approved the decision, saying that “only one feasible path offers a way out.”
Kevyn Orr, who was appointed Detroit Emergency Manager and has been overseeing the bankruptcy proceedings, admitted that there “must be significant cuts” in pensions for both current workers and retirees. Those employees agree that everyone will probably need to take a “haircut,” but they argue that they (and fellow emergency workers, firefighters, teachers and their families) shouldn’t be made to pay the ultimate price for the city’s fiscal mismanagement.
“I put my money into our pension fund and was promised it would be there by law when I retired,” Newberry explained. “I sucked up smoke and put my life on the line every day I went to work and have the injuries to prove it. The least the government can do is stand by Michigan law.”