An arcane and rarely trodden section of the bankruptcy code was instrumental in lifting a great American city out of disrepair.

Why it matters: The city of Detroit filed for the largest Chapter 9 bankruptcy case in U.S. history on this day in 2013.

• The bankruptcy ultimately allowed Detroit to shed about $7 billion of its $11 billion in unsecured debt, freeing up critical cash flow to reinvest in services.

Flashback: When Detroit filed for bankruptcy, the city's tax base had imploded due to population loss and the long decline of the auto industry.

• At the time about 40% of its budget was devoted to debt and retiree obligations.
• Absent the bankruptcy filing, that figure would've ballooned to about 70% within three to four years, which would have devastated public safety.

Between the lines: Chapter 9 bankruptcy was so mysterious when Detroit filed in 2013, that few attorneys had ever been involved in one.

Consequently, few people understood that:

• Unlike businesses, cities cannot be forced to sell assets in bankruptcy. Congress made sure of this.
• Municipalities must prove they're insolvent before they can even enter bankruptcy. In the meantime, they're at the mercy of creditors who can pursue assets via court judgments.
• Municipal pensioners lack the federal backstop that accompanies private pensions. As a result, they become unsecured creditors, and their checks can be cut.

The big picture: The tragedy of the Detroit bankruptcy is that pensioners did indeed endure cuts — albeit much lower, on a percentage basis, than unsecured Wall Street creditors.

• Without a state or federal bailout — both of which were politically untenable — such cuts were practically inevitable.

Where it stands: Chapter 9 bankruptcy freed up critical cash flow to reinvest in services.

• Detroit is now on solid fiscal footing because of the tough decisions that were made during the bankruptcy — and prudent financial decisions since then.
• As a result, the city has dramatically improved public safety services, repaired its broken street lights, bolstered public transit, improved parks, and removed thousands of abandoned buildings.

🖼️ Zoom in: Because cities can't be forced to sell assets in bankruptcy, Detroit was even able to preserve, with some philanthropic help, the treasured masterpieces at the Detroit Institute of Arts — the type of asset that surely would've been liquidated in a business bankruptcy.

The bottom line: Chapter 9 bankruptcy isn't a place you want to end up, but it does offer the chance for a fresh start if things go horribly wrong.

Go deeper ... "Gradually, Then Suddenly: The Bankruptcy of Detroit," debuts today, streaming free on Tubi and YouTube ... Watch the trailer.

The fees Americans are paying to manage the money in their 401(k) accounts have fallen dramatically this century, per a new report from the Investment Company Institute.

Why it matters: The billions of dollars saved in management fees are instead remaining in the market and compounding in savers' accounts over decades.

Follow the money: Two-thirds of the money in 401(k) accounts is invested in mutual funds — about $4.8 trillion, as of the end of 2023.

• With fees at current levels, mutual fund companies are collecting more than $15 billion per year for managing the money in 401(k) accounts.
• Every basis point (one-hundredth of a percentage point) that fees come down represents a savings of about half a billion dollars per year.

The big picture: Employees picking out funds generally choose the options with the lowest fees, while savers who have been part of a plan for many years are more likely to stick with whichever funds they originally chose.

• As a result, fees naturally tend to decline over time as older savers withdraw their funds and newer savers enjoy lower costs.

Between the lines: The larger the 401(k) plan, the lower the fees, in general.

• Plans with less than $1 million in assets paid average fees of 0.53% on their equity mutual funds in 2020, while plans with more than $1 billion paid 0.34% on average.

The bottom line: 401(k) plans aren't only a good idea from a tax perspective; they're increasingly attractive from a fee perspective, too.

Demand for software developers has plunged from the boom times of 2021 and 2022.

Why it matters: Even though the labor market remains strong, the supply of higher-paying white-collar jobs (tech, marketing and finance) is pretty meh.

• These positions, "what we once would've called office jobs," are the weakest spot in the labor market, says Nick Bunker, an economist at Indeed.

Catch up fast: There was a pandemic hiring frenzy for these roles. Workers were fielding multiple calls a day from recruiters and naming their price when it came to salary.

• Now, companies are slower to hire now and less willing to expand headcount, Bunker says.
• The decline in demand is likely not an AI thing — the drop-off started before the introduction of ChatGPT.

The big picture: These are still among the best jobs around.

• Software developer is ranked second on the Labor Department's list of occupations with the most projected job growth over the next decade or so, coming in after home health aides.
• And the pay is good. The lowest-paid software developers, located in the Cleveland metro area, earn a median salary of more than $100,000 per year, per a study from ADP last month. The highest paid work in Silicon Valley and earn a median of $163,000.

The bottom line: Good jobs are harder to find.