The Pain in Detroit
by Charles Lemos, Sat Oct 24, 2009 at 09:40:46 PM EDT
The Michigan Messenger has the bloody numbers. They are painful.
The September unemployment stats for Michigan came out this week and they are high -- as expected.
Mlive.com highlighted the statistics on a municipal level, showing the five cities with the highest jobless rates are all over 25 percent. The cities of Highland Park and Pontiac, which leaned heavily on auto-related employment, had the highest unemployment with 35.2 percent of residents reportedly jobless. Both cities have declared bankruptcy in the recent past. Highland Park recently emerged from state receivership and Pontiac just slipped under state control last year.
While the overall state's unemployment rate is the highest in the nation at 15.3 percent, the top five hardest hit cities in the state are all former automobile production hubs.
According to Mlive.com:
1.Highland Park 35.2%
1. Pontiac 35.2%
3. Detroit 27.9%
4. Flint 26.3%
5. Port Huron 25.7%
Back in April, the Detroit News reported that a Michigander family was leaving the state once every 12 minutes. Using US Census Bureau data, the paper found that Michigan gets less populated, less educated, and poorer because of outmigration.
The state's net loss to outmigration -- the number of people leaving the state minus those moving in from other states -- has skyrocketed since 2001. Although the Census Bureau does not report totals moving in and out each year, Internal Revenue Service records show that the population decline is a result of two disturbing trends: The number of Michigan residents leaving the state rose 25 percent between 2001 and 2007, while the number of new residents moving in plummeted by nearly one-third.
Since 2001, migration has cost Michigan 465,000 people, the equivalent of the combined populations of Grand Rapids, Warren and Sterling Heights -- the state's second-, third- and fourth-largest cities.
Population loss of that magnitude is so rare that its impact has never been studied. But The News' analysis discovered some sobering trends:
* Those leaving Michigan are the people the state most needs to keep -- young and college-educated. The state suffered a net loss to migration of 18,000 adults with a bachelor's degree or higher in 2007 alone -- the equivalent of half the staff of the University of Michigan crossing the state line.
* Michiganians who fled the state in 2007 took with them almost $1.2 billion more in paychecks than the paychecks of those moving in. That represents a 45 percent increase in lost wages in just one year, money no longer spent in Michigan businesses, paying mortgages or paying taxes.
Those leaving Michigan had incomes 20 percent higher than those who moved here ($49,700 to $40,000), a disturbing reversal of a long-standing trend.
And those figures don't take into account the "ripple effect" those paychecks would have had here -- an estimated $3.7 billion.
* The net loss of school-age children was more than 12,000 in 2007 alone, costing individual school districts roughly $84 million in state aid.
* With about 36,000 more households leaving the state than moving in, that leaves 36,000 empty houses and apartments, damaging already weak home values. "When there are more properties on the market, it drives down prices," said Ron Walraven, a real estate agent in West Bloomfield. "With the layoffs and the buyouts at the auto companies, people are leaving. Some are just abandoning their homes."
* People moving from state to state are disproportionately young. While almost 13 percent of Michigan's population is over 65, only 2.5 percent of those leaving are that old. That means outmigration is adding to the costs associated with an aging population, such as the state's share of Medicaid payments to retirement homes.
* There will be fewer tax dollars to pay for those services, maintain roads or run schools. According to Senate Fiscal Agency estimates, the income leaving the state cost Michigan more than $100 million in personal income tax revenue in 2007 alone.
How desperate are people? This desperate: Help Me Leave Detroit. It is just painful.