The Jump Start program, which will receive $40 million from President Biden’s American Rescue Plan Act, is announced by Mayor Mike Duggan. President Joe Biden’s senior advisor and coordinator for the American Rescue Plan, Gene Sperling, is present.
Detroit has always been known for its resilience and now that bounce-back effect is cropping up in other ways too as the country is on the verge of a national recession, according to a University of Michigan Economic Forecast.
With more jobs coming online, higher wages and more opportunities forecast for Detroiters, there is a level of growing optimism that cannot be denied – even though some harsh economic conditions still remain like unemployment.
The Detroit Economic Outlook for 2022–2027 published in early February by the University of Michigan predicts that despite forecasts of a slight national recession, Detroit’s economy would continue to develop steadily and demonstrate resiliency post–pandemic.
“We expect Detroit’s resilience in recovering from the pandemic to date to translate into continued growth – even amid a challenging national economy,” said Gabriel Ehrlich, director of U-M’s Research Seminar in Quantitative Economics and lead author of the forecast.
While good new lingers, some concerns level things out.
In general, it is indicated that employment will “increase every year from 2023 to 2027,” concluding the estimate with “far above pre-pandemic levels,” by creating 2,200 jobs this year and then picking up to an average of 2,700 additional jobs each year through 2027.
Blue-collar employment continued to lead the way in Detroit last year, increasing by 8,000 jobs over pre-pandemic levels. Blue-collar employment growth is still increasing, and the leisure and hospitality industry is recovering, which helps to balance recent losses and slower growth in the financial activities sector.
While there are still possible downsides to the projection, such as delays in construction projects and long-term consequences from remote work, city-led initiatives to give Detroiters well-paying jobs have strengthened its ability to survive a downturn. Furthermore, due to sound fiscal management that has preserved balanced budgets and increased reserves while enhancing the quality of life for Detroiters and satisfying financial obligations to City retirees and employees, the City is positioned financially to withstand the revenue risks of a slowing economy.
Detroit’s continued success in luring well-paying jobs is a major contributor to its healthy economy. In 2023, the city plans to start construction on a new employment center at the site of the former AMC headquarters, which is anticipated to provide up to 400 new jobs. Another win is the anticipated addition of 1,200 employees to the Amazon distribution center at the state fairgrounds. At least 400 people are anticipated to be employed full-time at Lear’s new seating factory, which will be located on the site of the former Cadillac Stamping Plant, by 2023.
According to the projection research, wages in Detroit are also anticipated to rise this year. Wage growth is anticipated to reach 4.3 percent this year and then drop back to 3 percent during the forecast, with a gain of 3.2 percent in 2022. From 2024 on, that growth is anticipated to outpace inflation. The analysis predicts that over the forecast period, wage growth for Detroit residents will keep up with wage growth for jobs situated in the city. By 2027, average resident salaries are anticipated to increase to $47,500.
The U of M projection also predicts that “workers will return to the labor force as the city’s recovery continues over the next years.” There were 8,865 jobs available for Detroit residents as of February 6. Additionally, the City will connect people with training programs as necessary.
The City is ensuring that more Detroiters will gain from new jobs and pay increases through initiatives like Jump Start. With the help of funded education and career/job training programs, Jump Start is a significant, first-of-its-kind $100 million scholarship program that aims to assist long-term unemployed citizens in reentering the labor force. It is anticipated that 1,200 Detroiters will return to the workforce thanks to Jump Start, with even more expected.
“Despite projections of a mild national recession, the Detroit economy has proven to be more resilient today supported by multiple years of balanced budgets for the City post-bankruptcy. We will continue employing the administration’s growth and opportunity strategies to further sustain and grow the City’s economy and improve the quality of life for Detroiters,” said Jay Rising, chief financial officer, City of Detroit.
For more information visit detroitmi.gov.
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