Catherwood LibraryILR School

An increasing number of U.S. cities are finding themselves ?under financial siege? as public sector labor costs far outpace tax revenues. For many cities, the housing collapse in 2008 has caused a steep decline in property taxes, which no longer offset the municipalities? outlay toward public employee pensions, overtime pay, and other labor costs. As a result, some municipal governments may seek to declare bankruptcy to void their current contracts with public sector unions. Others have taken the step of paying minimum wage to city workers, risking union lawsuits and large penalties in back pay and damages.