Detroit’s water shutoff policy is intimately connected with the city’s bankruptcy, which slashed retirees’ health care and pension benefits while privatizing city services and handing over public assets to well-connected speculators.Assuming such a privatization is in the works, the city might not be spending money wisely, as the simplest thing to do is to sell the water utility as is, where is, with all the unpaid bills, and let the new owner attempt to collect on them. The relevant economic question is whether the expected payoff net of collection costs to a policy of settling old accounts exceeds the expected payoff of selling the water works as is.
The bankruptcy paved the way for the spin-off of the city’s water department to a regional authority, in preparation for its ultimate privatization. This process has been accompanied by a draconian program of water shutoffs and rate increases aimed at making the future water authority attractive to investors.
Note, though, where another strapped waterworks is.
As the WSWS had warned, the decision to carry out mass water shutoffs in Detroit has set a precedent for other cities throughout the United States. Earlier this year, the city of Baltimore announced that it would begin shutting off water to as many as 25,000 residents.Under capitalism, are there insufficient incentives for workers rendered unemployable by globalization or the minimum wage to migrate out of cities rendered obsolete by globalization or improved infrastructures elsewhere?