The Pain in Detroit

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.

Tags: Michigan, Unemployement, US Economy (all tags)

Comments

7 Comments

so sad

I used to have a lot of family in Grand Rapids, which was a major furniture manufacturing center in this country.

I don't know how policy-makers can begin to turn things around there.

by desmoinesdem 2009-10-24 10:25PM | 0 recs
Depressing

There is no such thing as an equal opportunity depression.

That is to say that depressions occur in specific areas and grow or shrivel.

Today in America they are growing like so many spores of mold all over the country, but at the neighborhood level first and then consuming entire cities or regions.

And why is this happening?

There are a number of reasons. Most recently it is simply becuase the ultra wealthy are stealing the wealth of the less wealthy and that would include the rich, middle class and poor.

This is a government clearly run by select corporations. They are clearly in control.

They are using deception to govern. There will be no public option...the rumours of a public option are created to dampen any protest.

There will be an increase in the amount of troops in Afghanistan.

Talk of "troop withdrawal" should be recognized by the American population as endless. Troop withdrawal talk has been going since the wars in the mideast began.

War is now something that is "stylish". It's "in".

Deception in now the way of governance. People are regarded as objects to be manipulated by those in control.

This is a world wide phenomenon.

by stu Piddy 2009-10-24 10:28PM | 0 recs
Re: The Pain in Detroit

Michigan always had a step ahead of Ohio 'cos Ohio let its education system run aground decades ago, and suffered decades of brain drain... There is very little economic potential in Ohio anymore as a result.

Michigan avoided this crisis by continuously funding an excellent education system.  But, now,  they are suffering the same brain as Ohio, and with that, the end of the potential of new investment in the future.

It's a shame.  Michigan is a great state and was an economic powerhouse.  Soon it will become a dead state, and like Ohio, never able to recover.

by LordMike 2009-10-24 10:56PM | 0 recs
Re: The Pain in Detroit

Ohio will never recover? Have you seen the growth and development taking place about 30 minutes north of Cincinnati in areas like Liberty Twp, Mason and Lebanon. New homes, commercial and retail building and medical industry and growing and thriving there. They have beeb hampered somwewhat the last year due to the economy but prior to that were exploded economically.

by BuckeyeBlogger 2009-10-25 05:44AM | 0 recs
Re: The Pain in Detroit

A good article on what ails Detroit by someone who lived there

http://www.mackinac.org/article.aspx?ID= 9767

by BuckeyeBlogger 2009-10-25 05:48AM | 0 recs
Re: The Pain in Detroit

How painful is it?, you asked. A quote from the link:

I live in Detroit. I am a skilled pipefitter, yet I am unemployed. Detroit's unemployment rate is at a record 28.7 percent. 1/3 of Detroiters live at or below the poverty line. Crime is rampant. My house has been burglarized 9 times. My car window was bust by a thief who I caught breaking into the house down the street. He did it when he was released from jail a few weeks after being arrested for the burglary. The houses on both sides of me are vacant. One is a crack house. There is open drug use at an epidemic level. Violence is out of control. Those of you that know me remember how beautiful the neighborhood used to be. Now its too dangerous for me to even stay there. On average, 1 person is shot or killed here everyday. Google it. Or watch the many documentary clips on youtube.

I'm not bashing Detroit. It is a city with huge potential. But I can't wait. I can't control others, but I can do something myself.

So I am asking for your help. I am moving out of Detroit.

Thanks for this story. We keep hearing the statistics but not much about the lives behind them. Maybe when we do, we will understand that there is a Grapes of Wrath going on around us, and we need to get involved.

by MainStreet 2009-10-25 06:09AM | 0 recs
Re: The Pain in Detroit
I was born in Detroit and lived much of my life there. When I left over 30 years ago, crime was already out of control, e.g. the highest murder rate in the country, and the city was rapidly deteriorating. My white friends and I were attempting to hold out against the earlier "white flight" trend by choosing to live in a racially integrated community, but we were giving up, and many black people who could afford to leave were also leaving. We all left due to crime and unsafe neighborhoods, drugs, unemployment, and physical deterioration of the city and it's services, which then destroys the tax base leading to even worse conditions. The city lost half it's population. This is a disaster that, like Katrina, was largely ignored by our national government and by much of our society, in which workers are considered disposable, especially when many of them are black. There were, and still are, noble efforts to save the city, which was once the 5th largest in the country, but it takes more than a village, it takes a whole society.
Outside the city, I fear for the University of Michigan, among other things. I was able to attend that great school on a scholarship, and it changed my life, but I don't know how it can maintain it's quality under these financial conditions, and of course education is vital to the rehabilitation of any region.
by DeanOR 2009-10-26 09:21AM | 0 recs

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