Screwed in Scranton: Why Is This Just a Local Fight?

Scranton’s problems are actually typical of the financial death spiral facing many mid-sized towns in Pennsylvania and across the United States (see here, here and here) after three decades of deindustrialization and a halting economic recovery with continuing wage cuts. ​“Cities like Scranton have been hit hard by the loss of manufacturing and a loss of population, so that they are left trying to maintain services with a smaller tax base,” economist Stephen Herzenberg, director of the Keystone Research Center, a progressive think tank in Pennsvlvania, says. ​“But when the quality of services like education fall, better-off families will move out, and these cities won’t attract industry.”

The draconian, suddenly imposed pay cuts have generated enormous national attention. But stunningly, comments by the local combatants and former Pennsylvania Governor Ed Rendell, a pro-corporate Democrat, have almost entirely neglected the larger context of America’s glaring income inequality, its long-suffering industrial cities, and Pennsylvania’s shamelessly pro-corporate budget priorities.

The immediate outcome of the unilateral pay cuts has largely been an intramural struggle confined to the local Democratic players in Scranton. Mayor Chris Doherty, a Democrat, argues that the pay cuts are a temporary necessity to improve the city’s credit rating and line up a bank loan. Doherty promises to pay the workers back once the crisis has been resolved, but has defied a court order reinstating the old wage structure contained in the unions’ contracts. Doherty’s eagerness to do the bankers’ bidding brings to mind a Third World nation being strong-armed by the International Monetary Fund.

Doherty has been opposed by the overwhelmingly Democratic City Council members, who opposed Doherty’s earlier call for substantial property tax increases of 78% over the next three years to fill the city’s revenue gap. Instead, they favor remedies like ​“alternative revenue sources, such as increased contributions from nonprofits and commuter, sales and payroll taxes.” While well-intentioned, this hardly sounds like a plan that will fill a fiscal gap estimated of over $16 million for a city of 76,000 people.

Meanwhile, three city unions — International Association of Firefighters Local 60, the Fraternal Order of Police E.B. Jermyn Lodge 2, and the International Association of Machinists and Aerospace Workers Local Lodge 2305 — have filed suit against the wage cuts and the mayor’s failure to abide by a court order to pay full wages. The Scranton Times-Tribune reports:

The unions…are not persuaded that slashing wages is necessary. They see the mayor’s move as an effort to bully Scranton’s city council into approving the tax increase the local banking community, wary of the city’s unfunded debt, has demanded in return for any loan.

Along with filing the lawsuit, the unions have reached out to the Obama Administration (Vice President Biden was born in Scranton). Fire Fighters Local 60 President John Judge explained,
​“With Scranton and Pennsylvania being such a hot bed for the next election, we want to make sure that they know there’s a Democratic mayor that’s not taking care of his public safety unions

​“We know that President Obama and Vice President Biden have been staunch supporters of police and fire, and we wanted to make sure they were aware of how our unions were being treated up here.”

But the unions have apparently forgotten that the Obama administration infamously refused to take a firm stand with workers against a widely reviled Scott Walker in Wisconsin. Thus, there appears little chance that Obama or Biden will step into the midst of a dispute among Democratic constituencies so close to the fall elections. Nor can Obama, hamstrung by a Republican-controlled House, unleash the kind of federal assistance that dozens of cities like Scranton need.

​“What we need now is further revenue sharing from the federal government,” says Herzenberg. ​“Instead, we’re getting austerity economics. So when a local government in Scranton cuts back on public workers’ pay, it hurts the local private economy because there is weaker demand for their products. It’s obviously devastating for the city workers themselves, but it harms the overall economy.”

For Republicans like Gov. Corbett, such an intense, locally focused battle offers the delicious prospect of election-season in-fighting among Democrats. (Further, Corbett and his allies have also enacted restrictive ​“Voter ID” laws that GOP majority leader Mike Turzai openly boasted would deliver Pennsvlvania’s crucial electoral votes to Romney).

Gov. Corbett is rarely mentioned when diagnosing the problems afflicting the state’s troubled cities (here’s an exception), despite his willingness to let cities like Scranton twist slowly in the wind. Nor is the shared fate of Scranton and other cities across the nation discussed with any frequency. Insolvent Harrisburg, Penn., is dominated by a Corbett-appointed receiver, not unlike the anti-democratic method by which Michigan Gov. Rick Snyder is using bankruptcy to impose ​“fiscal martial law.”

While cutting back aid to local governments in line with the ​“starve the beast” (see here and here) gospel of Grover Norquist, Corbett has lavished enormous long-term tax breaks for hugely profitable firms like Royal Dutch Shell Oil, laying out $1.7 billion over the next 25 years. Not only will Shell be bringing a relatively small number of jobs to Pennsylvania, but it will be attacking the safety of its water supply with the use of technology and chemicals of unknown toxicity to fracture (also known as ​“fracking”) shale deposits containing natural gas. Shell has been awarded enormous tax breaks for this ​“public service,” while Corbett and co. enacted a law depriving localities of a democratic voice in the fracking issue.

Viewed against a national backdrop, the cruelly ripped-off workers in Scranton cannot afford to wait around for salvation by Democratic politicians. Nor can they fight their case in isolation from the larger trends of income inequality, attacks on public workers and institutions, and insidious efforts by corporations and the Right to undermine democracy. A much bolder and broader vision of the battle is desperately needed in Scranton. Corbett and his sponsors like Shell offer inviting targets, if labor is willing to engage in a protracted, far-reaching and imaginative struggle.