WUOMFM

Detroit unemployment rate expected to be lower for all the wrong reasons

Jan 25, 2015

Hart Plaza in Detroit.
Credit Jason Mrachina / Flickr

Michigan’s rate of unemployment is down. Detroit’s is expected to continue to decline. However, Detroit’s rate is still about twice that of the state.

Worse than that is the fact that the rates are going down for different reasons. The state’s 6.3% unemployment rate in December dropped again because statewide Michigan has been adding jobs.

In Detroit, it’s a different story. The December unemployment rate for the city has not yet been released, but it’s expected to continue declining. The reason the unemployment rate is going down in the city is because people are giving up the search for a job.

“Most of that decline will just be due to fewer people active in the workforce as opposed to any real significant increase in the number of persons employed,” said Bruce Weaver, an analyst with the Department of Technology, Management and Budget.

University of Michigan economist Don Grimes says while Detroit’s falling unemployment rate seems like a good thing, it might not be.

“…because a lot of people have actually dropped out of the labor force as well,” Grimes explained.

Job creation in Detroit is not keeping pace with the rest of the state. Some older workers and those with few job skills have given up. Additionally people moving away also factor into the falling unemployment rate in Detroit.

When the numbers come out in a few days, the Detroit unemployment rate is expected to drop below 13%, half of what it was in 2009.