Most Detroiters in a decade worked in September
Detroit – More Detroit residents went to work in September than any point this decade, according to data from the U.S. Bureau of Labor Statistics. And nearly 2,500 more Detroiters were employed in September than in August.
The statistics are the latest in a string of economic improvements for the city, though unemployment in Detroit still hadn't recovered from pre-Great Recession numbers. The lower unemployment rate is due largely to a strong U.S. economy, according to Gus Faucher, chief economist at PNC Financial Services.
Preliminary figures from the U.S. Bureau of Labor Statistics showed unemployment in Detroit at 7.9 percent and that more than 228,700 people were working. That’s an increase of nearly 2,457 over August when the jobless rate was 9.2 percent. Detroit’s unemployment rate was 28.9 percent in June 2009.
Michigan’s unemployment rate was 4 percent in September. The U.S. unemployment rate is about 3.7 percent.
Mayor Mike Duggan said more residents are enrolling in Detroit at Work training programs. More than 2,000 people enrolled in the programs in 2017-18, compared to 900 the previous year.
Faucher said Detroit's economic growth is more closely tied to growth of the national economy than other large cities because of Detroit's ties to the U.S. auto industry. He also said that Detroit's economic growth might soon plateau — the city's population was still down in 2017 despite the return of business to the greater downtown area.
Given the population disparity and Detroit's direct ties to an auto industry under constant pressure from new technology and foreign competition, the ceiling for Detroit's growth is lower than other similar cities, he said.
"Structurally, the Detroit economy is smaller than it was a couple decades ago," Faucher said. "For structural reasons, job growth in Detroit is going to lag behind other places in the U.S."
Still, the unemployment dip is the latest data point to improve in the city. The U.S. Census' American Community Survey estimates released in September showed Detroiters' incomes rose in 2017 for the second straight year, though residents living in poverty didn't appear to benefit.
Detroit's median household income was $30,344 in 2017, a 5.9 percent hike from the previous year, according to the U.S. Census Bureau. But the city's poverty rate of 34.5 percent didn't change significantly in 2017, though it is down from 40.7 percent five years ago.
The household income of Detroit residents is still lower than what residents were earning before the national Great Recession — $33,019 adjusted for inflation in July 2007. The income increases were seen largely by Detroit's African-American residents.
Marick Masters, a business professor at Wayne State University and director of its labor program, said to decrease poverty, the city needs to decrease the number of those who are not participating in the workforce. This, he said, can be expensive and requires greater outreach efforts and mentorship, better access to transportation, improving schools and changing laws to make it easier for ex-offenders to be hired.
"I think there's room for improvement in Detroit," Masters said. "This will require a lot of targeted effort and positive economic growth generally. It needs a combination of both."
Kurt Metzger, founder of data analyst firm Data Driven Detroit, said by some estimates, 38 percent of working-age Detroiters are not employed or unemployed. Even those who are employed, up to two-thirds, he said, lack the training and education to work in the jobs in the city and have to commute to the suburbs.
Masters said the most effective programs appear to be those that take a holistic approach of providing training with a guaranteed job afterward and that also may assist with daycare and transportation.
An executive order that requires large developments receiving city support have 51 percent or more of the construction hours done by Detroiters could be a driving factor for job growth. Although some contractors have struggled to meet the requirement, resulting in fines, it has led to investment in training programs such as for the Detroit Pistons training facility in New Center and Ford Motor Co.'s Corktown campus anchored by Michigan Central Station.
Community benefits agreements, mandated for large projects by a voter referendum in 2016, also have emphasized hiring local residents or funding training initiatives.
In October, Ford supplier Flex-N-Gate said a Focus: HOPE training program has helped it to hire more than 100 Detroit residents. At the time, it employed 230 people at its new $160 million plant in the Interstate 94 Industrial Park.
"The trends are encouraging, although we still have a lot of work to do," Duggan said in a statement.