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Bloomberg Warns that the City's Labor Costs Could Make NYC Like Detroit

 Mayor Michael Bloomberg delivers remarks at the former Pfizer plant in Brooklyn.
Mayor Michael Bloomberg delivers remarks at the former Pfizer plant in Brooklyn.
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DNAinfo/Colby Hamilton

NEW YORK CITY — Mayor Michael Bloomberg pointed to Detroit filing for bankruptcy last month when he warned on Tuesday that expanding pension and healthcare costs for city workers represent a similar long-term threat to New York’s future.

Chief among those reasons, according to the mayor, was Detroit’s inability to transition from its dependence on large-scale manufacturing to a more diverse, high-tech economy—something Bloomberg said New York City had managed to achieve.

“The great manufacturing cities of the 21st century will be those that produce unique innovations and ideas, not uniform widgets,” Bloomberg said during a speech at a business incubator located inside the former Pfizer factory in Brooklyn.

He pointed to the Pfizer facility, which had operated for 150 years before closing in 2008. It was home to one of the small-scale manufacturing and production hubs the Bloomberg administration had worked to create.

But Detroit was also undone, according to Bloomberg, by “special interest politics” that helped drive that city’s labor costs to unsustainable levels. Bloomberg warned that New York City could suffer the same fate.

According to the mayor, the city’s annual pension obligations that will continue to grow from the current $8 billion mark, coupled with rising city employee healthcare costs paid almost entirely by the city treasury, threaten to undo the economic gains made by the city since the 1970s.

With all of the city’s labor contracts up for renewal and the city soon looking for cheaper healthcare insurance for city workers, Bloomberg said it’s up to the next mayor to keep these financial burdens in check.

“The question is: Will the next mayor continue to hold the line or capitulate,” Bloomberg said. “The reality is we may be a long way from Detroit, but we are only a short distance from relapsing into decline if we allow healthcare and pension benefits to crowd out the investments that make New York City a place where people want to live, work, study and visit.”