Detroit City Council OKs wage cut for non-union workers

Fri Jan 25, 2013 11:25am EST

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Jan 25 (Reuters) - The Detroit City Council on Friday approved another measure aimed at shoring up the city's sagging finances and staving off a state takeover.

In a 6-3 vote, the council reduced the pay of non-union workers in Detroit's legislative and executive branches by 10 percent. Mayor Dave Bing had originally sought an up to 20 percent reduction through unpaid days off. Estimated cost savings were not immediately available from Bing's office.

Since November, a majority of the nine-member city council has signed onto reform, restructuring and cost-cutting measures sought by the mayor and by Michigan officials to address a financial crisis that has dogged the city for years.

The slow progress prompted the state in December to launch a review process that could lead to the appointment of an emergency financial manager who could recommend Detroit file for bankruptcy. That process, which would culminate in a recommendation by a review team to Governor Rick Snyder, could end soon.

A Chapter 9 municipal bankruptcy filing by Detroit, which the state could block, would be the largest ever in the United States. Detroit has around $8.2 billion of outstanding rated debt.

The city of about 700,000 has been battered by a steep decline in population, years of severe budget deficits and escalating employee costs.

Earlier this month, the council approved a one-year pension freeze and a higher share of health care costs for nonunion workers as the city planned to negotiate similar cost-cutting actions with its labor unions.

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