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From VOA Learning English, this is the Economics Report.
Detroit Mayor Dave Bing had to report some bad news recently. He said Detroit was seeking bankruptcy protection. The move would give the city court protection from creditors. The decision to declare bankruptcy is an effort to restructure and reduce debt. It comes at a difficult time for Detroit. In March, Michigan Governor Rick Snyder named Kevyn Orr, a bankruptcy expert, to oversee the city’s financial problems. Detroit has been struggling to reduce a budget deficit of more than $300 million. In addition, the city’s long-term debt has increased to at least $18 billion.
Detroit’s problems have grown over many years. Michigan State University professor Eric Scorsone says the city depended too much on one industry: automobile manufacturing. Jobs with car makers were a big reason why Detroit was one of the country’s largest cities half a century ago. In the 1950s, it had a population of about 1.8 million people. Today the number is down to less than 800,000. Robin Boyle is a professor of urban planning at Wayne State University. He says, over the years, many Detroit residents moved to areas outside the city or even left the state. That hurt Detroit’s ability to invest in itself. It is rare for a large American city of seek bankruptcy protection. In 1975, New York City came close before the federal government agreed to provide money. Detroit, however, is the largest city to seek bankruptcy.
Now, a federal judge is to consider Detroit’s request. One of the main issues is what to do about the retirement pay of city workers. Currently, there are many more retired workers than those paying into the pension system.
