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Tale of two cities: Despite rebound, study says Detroit short 100,000 jobs

Feb 17, 2017

Over the past several years, the conventional wisdom has been that Detroit is recovering. Every new restaurant, boutique store, or retail chain setting up shop in Detroit is offered as proof.

There’s a major flaw in that assessment.

The focus of recent development has been the city’s central business districts. Meanwhile, the people in the neighborhoods are not sharing in that prosperity. If anything, the plight of Detroit’s long-time residents has been getting worse.

“You’ve got a huge jobs deficit in the neighborhoods,” said Gary Sands, professor emeritus in the Dept. of Urban Studies and Planning at Wayne State University. “And when you bring jobs into midtown and downtown, whether it be Quicken Loans or Microsoft or whoever, it doesn’t do as much good for the people who are in the neighborhoods.”

Sands is the author a recent article in The Conversation, Detroit’s Recovery: The Glass is Half-Full at Most. It highlights the ways in which Detroit’s neighborhoods are being left behind. 

His examination of economic and social trends in the city in recent years reveals that Detroit’s purported recovery has largely benefited people who don’t live in Detroit at all. For example, while jobs for suburbanites who work in Detroit have increased by 16.6% since 2007, jobs for Detroit residents have declined by 35.5%.

“If you look at data on payrolls and income from employment for Detroit, it’s going up in downtown /midtown, zip codes 48201 and 48226,” Sands said. “But in every other area of the city, the total payrolls are going down. The average wage rate in downtown midtown is perhaps 4 or 5 times what it is in the neighborhoods, and that’s not sustainable.”

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In the face of this growing disparity, the development tax breaks that have been proposed (and granted) as a way of drawing businesses and jobs to Detroit may not do much to help the city’s long-term residents. In fact, such policies can help to prioritize capital investments over job growth. 

“Every time you invest in a building, or a machine... you make that more attractive, people use more of that, and consequently less labor,” Sands said.

That’s a problem because, in Sands’s analysis, any solution to Detroit’s long malaise will require substantial job growth. He estimates a shortage of 100,000 jobs in the city.

Improvements to the city’s public education, greater access to transportation and programs that foster entrepreneurship in the neighborhoods are among the approaches that he suggests to help fill that job gap.  

But, as Sands points out, none of those are the types of quick fixes that align with legislative and political cycles.

“It’s taken six decades to decline to the point where we are today,” he said. “It’s not going to be fixed in the next three years.”

Listen to our full interview with Gary Sands, professor emeritus in the Dept. of Urban Studies and Planning at Wayne State University, above.

Support for the Detroit Journalism Cooperative on Michigan Radio comes from the John S. and James L. Knight Foundation, Renaissance Journalism's Michigan Reporting Initiative, the Ford Foundation and the Corporation for Public Broadcasting.