Will Detroit Resurgence Continue Amid COVID-19 Crisis

By Donald James 

Like many cities across America, Detroit has been impacted by the COVID-19 pandemic that began to wreak havoc on businesses and economic development in March of this year.  Unlike other American cities, however, Detroit, in 2013, filed for a devastating bankruptcy, making it the largest municipality in American history to do so.  Yet, since coming out of bankruptcy the following year, the city has made steady gains in job growth and economic development.  And then the COVID-19 pandemic hit, sparking job loss in Detroit across every sector of business.

This August the University of Michigan released a report that revealed in April of this year more than 64,000 jobs had been lost by Detroiters due to the pandemic.  According to Nicole Sherard-Freeman who oversees Detroit at Work, a Mayor Duggan Workforce Development Board entity, employment of Detroiters has rebounded faster than expected, but has not reached the level reported earlier this year.  However, as of Nov. 10, according to Detroit at Work’s website, 5,028 jobs are available in Detroit across 237 employers.

While the pandemic has the power to negatively impact businesses and jobs across the Motor City, there are lots of reasons for optimism, even as the pandemic rages on.  One of the city’s leading organizations on economic development, job creation, and small business entrepreneurship is reflecting complete optimism.

“We are in ‘go-mode’”, said Kevin Johnson, president and CEO of Detroit Economic Growth Corporation (DEGC), the city’s economic catalyst created to attract investments, create jobs, and advance Detroit’s economy for all residents.  “We are going as hard as we can to provide support to small businesses and fulfilling our obligation to continue to build the economy of Detroit with our local, regional, state, federal and philanthropic partners.”

Johnson admits that the pandemic has stunned small businesses across the city, many of which are Black-owned.  Yet, he was ecstatic when talking about DEGC helping small businesses through the tough times of the pandemic to the tune of $7.25 million in restart grants distributed in late September of 2020.  Black-, women- and veteran-owned businesses have been awarded more than 70% of the funds.  

“Protecting Detroit’s small businesses that have been hit especially hard by the COVID-19 crisis is a key priority for the City, “ Johnson said.  “Assistance from the Restart Program will help more than 900 Detroit small businesses that are suffering from lost revenue.  Our entire community is coming together with resources to help our small businesses survive this crisis so we can protect jobs, economic growth and the neighborhood vibrancy that comes from the small business community.”

Johnson said that even though there have been tough moments for DEGC due to the pandemic, the non-profit organization has not slowed its efforts to attract investments and complete projects that have been in the organization’s queue since March when the pandemic became a stark reality.

“We announced the Amazon project during the pandemic, announced Queen Lillian during the pandemic, announced Osi Art Apartments during the pandemic, and had ribbon-cuttings on Motor City Match winners, such as Polished Lounge.  And Clearcover, a leader in car insurance, announced they are coming to Detroit and will generate close to 300 jobs.”

Jobs for Detroiters is something that Nicole Sherard-Freeman knows a lot about.  She has molded Detroit at Work into a world-class staffing entity that supplies ready talent to employers.

“It’s clear that the workforce in the city is one of the leading advantages in the marketplace, as we convince businesses to locate to Detroit or expand in Detroit,” said Sherard-Freeman.  “Detroit having the workforce to support their businesses is a huge selling point. It’s more important than incentives and tax abatements because if you can solve employers’ talent problems, it’s huge.”

Sherard-Freeman points out that two of the largest companies to work with Detroit at Work to fill jobs with Detroiters are Fiat Chrysler Automobiles (FCA) and Amazon.

“We are just beginning to feel the impact of FCA bringing thousands of jobs to the city,” Sherard-Freeman said.  “We were not sure how things would pan out earlier in the year.  Now, here we are in November with more than 4,300 Detroiters who have job offers with FCA, 4,100 Detroiters that have already accepted, and more than 3,400 who have already started work at FCA.”

Amazon has been hiring many Detroiters for months, even amid the COVID-19 pandemic.  The company’s goal is to hire 2,000-plus workers.  Amazon has a starting hourly wage of $15.00 with full benefits that begin day one.

“We are targeting our recruitment to Detroiters through the Michigan Chronicle and local news stations,” said Ofori Agboka, Amazon’s vice president of human resources for Global Customer Fulfillment.  “We’ve come to Detroit because we believe in Detroit.”

Amazon’s presence in Detroit will become even larger when the giant company builds a 3.8-million-square-foot fulfillment-distribution facility at the site of the former Michigan State Fairgrounds.  When completed in 2022, the facility will accommodate at least 1,200 workers.  With the addition of two Amazon facilities currently under construction in Pontiac, it is apparent that Detroit and surrounding cities have become prominent destinations on Amazon’s radar for expansion.

Both Sherard-Freeman and Johnson share the belief that Detroit is a city of destination, but they agree that the pandemic can have an impact.  Johnson believes the linchpin to the continuation of business and job growth is the ability to control the COVID-19 virus and its spread.

“If things are going in the opposite direction because of the virus, no one is going to come invest anything,” Johnson said.  “If this virus is not under some level of control and we are not doing our parts to prevent the spread, it becomes a threat both externally and internally.”

Dr. Tiah E. McKinney, founder of The Equity Institute, agrees that the key to economic growth, stability, and prosperity for Detroiters is controlling the virus.  Through the Detroit-based Institute, McKinney oversees relevant research, policymaking, and the implementation of best practices that empower individuals and organizations economically.

“Detroit was hit hard by COVID-19 and now we are seeing a resurgence of the virus,” said Dr. McKinney, who also heads the 10-year-old McKinney Foundation.  “Businesses and the economy will not rebound as they should until COVID-19 is under control.  When we stabilize COVID, we will stabilize the economy.  I see education, health and the economy as synergistic.”

“When the pandemic happened, it put heavy stress on small and medium-sized businesses,” said Johnson.  “How we responded and continue to respond was to identify resources that would provide liquidity in the system to help businesses survive.  That is what we do, and will continue to do, to help stabilize this economy.”

Sherard-Freeman knows that as more Detroiters are hired, the better it will stabilize the economy while reflecting that the Motor City is a place that companies will find a strong workforce.

“Our aim is not just to attract businesses to Detroit, but to have a reputation in the state, nation, and world as a place where it’s easy to do business,” said Sherard-Freeman, who on January 1, 2021, will serve as group executive of Jobs, Economy and Detroit At Work, after Mayor Duggan appointed her to the powerful position.  “I’m extremely optimistic that more employers will see Detroit as a place to locate, a place that they want to do business and a place that will deliver on the talent promises we make.   I’m completely confident that Detroit is on the right side of the equation.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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