Detroit’s Demise a Dire Warning for Other Cities
By Keith Hansen
Detroit might not be the only city that sinks into bankruptcy this year if the economic storm that is prophesied to sweep across the nation lives up to its billing. Recent estimates place 48 states in an at-risk status, with Illinois the odds-on favorite to topple first.
So it may be that the noble effort to save the Motor City has come too late. It’s of little consequence, no doubt, that Detroit would be spared the ignominy of going down in history as the solitary failed city. Instead, it will be known as the first of many to have fallen. Presently, Detroit has suffered a 60-percent drop in factories and a nearly 90-percent reduction in its workforce from 1960 levels. The staggering impact of those numbers on the local economy doesn’t take into consideration the loss of industry-related jobs and of secondary businesses that spring up around major employment facilities.
What happened to the auto industry in 2009 could not have come as a surprise, given the kind of numbers floating around even as far back as 1993.
At that time, a New York Times article entitled “Retirees Figure Big in Detroit Math” reported that in 1950, a company like Ford had 62 active workers per retiree. Just over 40 years later, the ratio had dwindled to 1.2 workers per retiree.
As economic conditions continued to deteriorate and the wear and tear of the hits Detroit absorbed in the past began to show—both tangibly and psychologically—the toll manifested itself in several ways, the most marked of which is flight from the city.
Since approaching 2 million in 1950, the population has steadily declined and now is at approximately 680,000—82 percent of whom are black.
Late last year, The Detroit News figured the official unemployment rate at 27 percent—the optimistic low end of a scale that, in reality, could easily be bumped upward to 47 percent.
The city’s infrastructure is in no better shape for this continuing depopulation, as certain low-income sections are targeted for the bulldozer.
There are approximately 34,000 vacant homes, with three times as many vacant lots, and Detroit Mayor David Bing, a former National Basketball League player who spent nine of his 12 seasons with the Detroit Pistons, projects that within three years, 10,000 homes will be razed, 3,000 of which will come down this year. Residents in the sections designated for demolition are offered buyouts and relocation.
Although this plan, on its face, appears to be a radical move, several cities outside of Michigan have similar programs, with others ready to adopt such measures—an indication of how widespread and entrenched the nation’s economic malaise has become.
The median sales price for a Detroit home is now $5,800. That figure doesn’t leave much for the city in terms of property taxes, which, in turn, isn’t good for the school system that is over $100 million in debt and trying to stave off bankruptcy by possibly closing half its schools and increasing class sizes to 60 or more.
Things have gotten so bad that a councilman with mayoral aspirations has abandoned his home. Detroit is also faced with a budget deficit of at least $85 million, moving Bing to plan more emergency measures such as halting key services, to include fire and police, in parts of the city considered “unsustainable.”
This move could also become an inducement to move people who are not inclined to do so, perhaps forcibly.
Bing is also hoping for $25 million in aid from federal and state funds to pay for the first two years of demolition.
Keith Hansen is a veteran journalist and radio talk show host. His website can be found at beyondthegrassyknoll.com.
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(Issue # 7, February , 2011)