WASHINGTON — Detroit's historic bankruptcy filing is a major setback for public employee unions that have spent years trying to ward off cuts to the pensions of government workers around the country.
If the city's gambit succeeds, it could jeopardize the longtime union bargaining strategy of deferring higher wages in favor of more generous pensions and health benefits.
It also could embolden other financially troubled cities dealing with pension shortfalls to consider bankruptcy, or at least take a harder line negotiating with unions.
Detroit's bankruptcy filing comes on the heels of public employees losing most of their collective bargaining rights in Wisconsin. Unions also have shed thousands of members as state and local governments shrink public payrolls.
The crisis of underfunded public pensions could further erode union clout.
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