May 5, 2009 City Council packet - Laserfiche WebLink

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In November, nationwide unemployment in manufacturing and production occupations was already 9.4 percent. Compare that with the professional occupations, where it was just a little over 3 percent. According to an anaiysn done by Michael Mandel, the chief economist at BusinessWeek, jobs in the "tangible" sector —that is, production, construction, extraction, and transport —declined by nearly 1.8 million between December 2007 and November 2008, while those in the intangible sector —what I call the "creative class" of scientists, engineers, managers, and professionals —increased by more than doo,000. Both sorts of jobs are regionally concentrated. Paul Krugman has noted that the worst of the crisis, so far at least, can be seen in a "Slump Belt," heavy with manufacturing centers, running from the industrial Midwest down into the Carolinas. Large swaths of the Northeast, with its professional and creative centers, have been better insulated. Perhaps no major city in the U.S. today looks more beleaguered than Detroit, where in October the average home price was $18,313, and some 45,000 properties were in some form of foreclosure. A recent listing of tax foreclosures in Wayne County, which encompasses Detroit, ran to agi pages in the Detroit Free Press. The city's public school system, facing a budget deficit of S4o8 million; was taken over by the state in December; dozens of schools have been closed since 2005 because of declining enrollment. Just ao percent of Detroit's adult residents are college graduates, and in December the city's jobless rate was 2a percent. To say the least, Detroit is not well positioned to absorb fresh blows. The city has of course been declining for a Iong time. But if the area's auto headquarters, parts manufacturers, and remaining auto -manufacturing jobs should vanish, it's hard to imagine anything replacing them. When work disappears, city populations don't always decline as fast as you might expect. Detroit, astonishingly, is still the lath -largest city in the U.S. "If you no longer can sell your property, how can you move elsewhere?" said Robin Boyle, an urban -planning professor at Wayne State University. in a December Associated Press article. But then he answered his own question: "Some people just switch out the lights and leave —property values have gone so low, walking away is no longer such a difficult option." Perhaps Detroit has reached a tipping point, and will become a ghost town. I'd certainly expect it to shrink faster in the neat few, years than it has in the past few. But more than likely, many people will stay —those with no means and few obvious prospects elsewhere, those with close family ties nearby, some number of young professionals and creative types looking to take advantage of the city's low housing prices. Still, as its population density dips 10