When it comes to figuring out why the Good Ship Economic Recovery still hasn’t quite made its way to port in Detroit, even though metro Detroit, the State of Michigan, and indeed much of the rest of the country apparently have much to brag about, it’s really all about deciphering the clues to the numbers game.
Last week, Bloomberg News came out with a widely-circulated upbeat story trumpeting how the level of unemployment throughout the country continues to decline at a noticeable rate, thanks largely to policies put in place by President Barack Obama. This is, indeed, very good news. Especially considering how the economy was preparing to jump off the cliff just eight years ago when Obama first took office.
So this is what Bloomberg said on July 23:
“The fewest Americans in four decades filed applications for unemployment benefits last week, continuing to unwind an early-July surge that was probably tied to mid-year factory shutdowns and school vacations. Jobless claims plunged by 26,000 to 255,000 in the week ended July 18, the fewest since November 1973, a report from the Labor Department showed on Thursday in Washington. The median forecast of 47 economists surveyed by Bloomberg called for 278,000. Volatility is typical for this time of year as auto plants retool for the new model year and school staff varies with summer holidays, a department spokesman said as the data was released to the press.”
Sounds great. Bringing it closer to home here in Michigan, the Detroit Free Press trumpeted similar good news last March, reporting that Michigan’s unemployment rate had dropped below 6% for the first time in 14 years thanks in large part to an auto industry flexing its newly-acquired muscles and more building and construction.
The unemployment rate fell to 5.9% in February, down from 6.3% the previous month and 7.8% in February 2014.
“Gov. Rick Snyder boasted that the state had added 400,000 private-sector jobs since 2010, when he was elected, best among Midwest states. ‘We should be proud that our hard work in reinventing Michigan is showing results, with companies tapping our talent and legendary work ethic as they create more and better jobs. We’re working to lead the nation in developing the skilled trades, creating an environment for businesses to grow and thrive and building on the entrepreneurial spirit that is known around the globe.’”
But then we get to Detroit, and suddenly the good news comes to a bit of a grinding halt. Because despite the continued reports of Detroit as the Comeback Kid, brand spanking new with a million dollar smile, ready to be re-introduced to the world, those pesky facts and numbers still insist on raising a red flag that the Promised Land and Detroit are not twins. They ain’t even related. Because according to the Bureau of Labor Statistics, unemployment in Detroit was 13 % by the end of May. Granted, that 13 % is (thankfully) a drop from the 16.90 % level of May of 2014, or the 18.6 percent level reached in May the year before that. But it is also more than twice the unemployment level for the rest of the state, which is higher than the new and improved national average.
“We know that the unemployment rate is at least double, perhaps triple the 13.1% reported for Detroit. The rate does not include those who are no longer seeking employment or receiving unemployment benefits. Recent research conducted for JPMorgan Chase indicated that there were 175,000 Detroiters in the labor pool who were not working and are not actively seeking a job. The number of jobs available is growing, but businesses are looking for employees who are ready to work and skilled. Training and post-secondary education are essential to succeed,” said Pamela Moore, President and CEO of Detroit Employment Solutions Corp., in a written statement.
So how could this be? Time to look at some more numbers…
Nearly half the city’s residents are considered functionally illiterate. The number of Detroiters living below the poverty level is roughly one-third of the population. For at least the past decade, hundreds of Detroiters each year have been threatened with losing their homes to either mortgage or tax foreclosure. From the Huffington Post (May, 2011):
“According to estimates by The National Institute for Literacy, roughly 47 percent of adults in Detroit, Michigan — 200,000 total — are “functionally illiterate,” meaning they have trouble with reading, speaking, writing and computational skills. Even more surprisingly, the Detroit Regional Workforce finds half of that illiterate population has obtained a high school degree.
The DRWF report places particular focus on the lack of resources available to those hoping to better educate themselves, with fewer than 10 percent of those in need of help actually receiving it. Only 18 percent of the programs surveyed serve English-language learners, despite 10 percent of the adult population of Detroit speaking English ‘less than very well.’ Additionally, the report finds, one in three workers in the state of Michigan lack the skills or credentials to pursue additional education beyond high school.”
Now contrast these numbers with those that describe Detroit’s hottest real estate surrounding downtown. From the 2nd Edition of “7.2 SQ MI: A Report on Greater Downtown Detroit”:
“Since 2010, Downtown Detroit has added over 16,000 employees including over 12,000 Quicken Loans affiliated team members, 3,400 Blue Cross Blue Shield employees, and 600 Campbell Ewell employees.”
Judging by the condition of at least 47 percent of Detroit’s population, it’s a safe bet that close to zero of those brand new jobs went to any of them.
The New Detroit isn’t going to work for the vast majority of Detroiters (and isn’t currently working, by the way) until Detroit places a top priority on figuring out how to meet them where they are and then on how to revise and redesign the current New Detroit blueprint to be more inclusive of those Detroiters who are already here – and who continue to struggle.
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