Detroit.........

[heirloom]

Detroit was a manufacturing city. They have lost the workforce and it's been replaced with unskilled workers, low property values, high taxes and crime.

Pittsburgh was a manuf. city too. Most of the steel mills are gone because of Chinese steel. We are now mostly a health & service industry. Some suburbs still have mills, but not like it used to be. People have re-educated themselves with the help of UC and it is working. But we are really lucky now because a lot of people are being subsidized with the Marcellus shell. Lets see if Mr. Obama puts a stop to this.

I am not that familiar with much of the Midwest, but doesn't Chicago have much more to build on if they manage to solve their social and political mess?

Chicago is in trouble monetarily too...but they just signed a contract they can't afford with the teachers last year.

Allstate Insurance must be HQ'd in Chicago because they mentioned how they are cutting both health and pension benefits when they were talking abouc Chicago this past week.

 

[aja8888]

Very helpful on the ground report. Could you mention some other cities where similar if not necessarily as bad decay is going on? I know Dayton OH is in pretty bad shape, and of course has been a manufacturing powerhouse for most of the last century.

Ha

Another good example of this kind of manufacturing job loss and city decay (not to the extent of Detroit, though) is in the Naugatuck Valley in Connecticut. The affected towns include Torrington, Waterbury, Seymour, Ansonia, Derby and even Bridgeport. This area was home to most of the brass and copper manufacturing in the U.S. It was known as the Brass Center of the World at one time and was the home of companies such as the American Brass, Chase Brass, Bridgeport Brass, etc and even metals finishing plants operated by Uniroyal and others.

Foreign competition and lack of foresight by company executives for capital investment sunk these plants and there were thousands of job losses. In some of these towns, the largest employers are the city governments (cops, fire, trash collection, etc). All of the 100 year old plants are shut down and the landscape is eerily like Detroit's.

I was raised and worked there in engineering and eventually as a Plant Manager (Waterbury & Ansonia) until I left for another adventure and different career. That was the smartest move I have ever made in my working life.

Not like Detroit, but could be....

"Waterbury's economic decline in the 1970s and 1980s resulted in it being ranked as having the worst quality of life of 300 U.S. metropolitan areas by Money Magazine in 1992. Waterbury was rated as one of the "10 Worst Places to Live in America" in the 1999 Places Rated Almanac.[11] Waterbury was also rated as one of the "Worst Places for Businesses and Careers in America" by Forbes Magazine in April 2008.[12]"

Full Wiki on Waterbury:

Waterbury, Connecticut - Wikipedia, the free encyclopedia

 

[Htown Harry]

It's probably not material to Detroit's future, but I'm curious. How is Windsor, Ontario, Canada doing across the river?

 

[jollystomper]

It's probably not material to Detroit's future, but I'm curious. How is Windsor, Ontario, Canada doing across the river?

Windsor is a much smaller city and has be able to diversify to a much greater degree than Detroit. According to Wikipedia and various other online sources it has a very good outlook for the future. Due to its size and different governing policies in Canada, it is really an apples-to-oranges comparison with Detroit.

 

[Meadbh]

Windsor is one of many Ontario cities that have suffered economically from the shift away from manufacturing. It currently has a relatively high unemployment rate of over 9%, but it is rebounding. The economic centre of Canada is shifting west. Detroit and Windsor share some services, e.g pediatric brain surgery. The mayor of Windsor is calling the emergency administrator of Detroit in an effort to ensure that the tunnel between them remains open.

Ontario RCI: real estate listings | income property agents Windsor » Windsor Economy News

 

[bUU]

It won't disincorporate.

Big business is not about to invest billions to move back as they have too many other better alternatives.

I agree. I think prior success stories about other cities do nothing more than underscore how Detroit is coming to the table too late.

 

[48Fire]

I recall someone was looking to buy up city blocks and use them for vegetable farming? Sounds crazy, but IIRC the city would be willing to give the property away, as then they don't need to do any maintenance on infrastructure.

Kind of a win-win, but all in lower case.

-ERD50

We did a similar thing in a smaller city on a MUCH smaller scale. A lot of fun, hard work, etc., but very rewarding. Tempting to explore Detroit for possibilities like this.

 

[marko]

Not sure Detroit is toast -- I'm sure many capitalists will find a way to benefit from Detroit's current condition and move it forward.

Not to be overly simplistic, but it seems to me that the capitalists leaving town and going to more welcoming areas (business climate, crime, etc) was part of the problem.

 

[JOHNNIE36]

There once was a saying that went "What's good for General Motors is good for the country". That saying now could be "What's bad for General Motors is bad for the country". I remember that at one time it was said that for every job in GM there were six supporting jobs in the country. All the way from steel, glass, rubber, plastic, fabric, down to restaurants and other small businesses. I know that supporting industries like the sheet metal stamping press and plastic injection molding business has been hurt. What got me thinking about that was the loss of the manufacturing base in Dayton, Ohio. At one time the home of National Cash Register and the Frigidaire division of GM, I think the loss of those really hurt Dayton. The same goes for other cities around the country especially Detroit.

We really need that manufacturing base.

 

[FIRE'd@51]

From a municipal bond investment point of view, Detroit highlights the potential riskiness of GO bonds versus revenue bonds.

 

[ChrisC]

Not to be overly simplistic, but it seems to me that the capitalists leaving town and going to more welcoming areas (business climate, crime, etc) was part of the problem.

That was old school manufacturing capitalism that left. I'm thinking the new school stuff, with the right incentives, could come into Detroit if Detroit can fix some of its education and labor force issues. Quicken Loans did move its headquarters and 8,000 employees to Detroit a few years ago. Quicken Loans - Wikipedia, the free encyclopedia.

 

[lynxville]

With the overwhelming debt of the US, maybe the country will eventually go bankrupt? What happens when the interest rates rise and you owe 16 to 20 trillion?

 

[ChrisC]

There once was a saying that went "What's good for General Motors is good for the country". That saying now could be "What's bad for General Motors is bad for the country". I remember that at one time it was said that for every job in GM there were six supporting jobs in the country. All the way from steel, glass, rubber, plastic, fabric, down to restaurants and other small businesses. I know that supporting industries like the sheet metal stamping press and plastic injection molding business has been hurt. What got me thinking about that was the loss of the manufacturing base in Dayton, Ohio. At one time the home of National Cash Register and the Frigidaire division of GM, I think the loss of those really hurt Dayton. The same goes for other cities around the country especially Detroit.

We really need that manufacturing base.

Why? We've been losing this in the global economy for the last 2 decades. We need to adjust and adapt to this reality much like Pittsburgh adapted and adjusted to the lost of steel to foreign competition.

 

[bUU]

I suppose the question boils down to whether there is another, durable foundation on which to base an economy. We have gone past agricultural, and industrial. So the question is whether a service-based economy actually qualifies as durable, and whether the human populations, so necessary to sustain agricultural and industrial economies, are sustainable in a service-based economy.

 

[JOHNNIE36]

Why? We've been losing this in the global economy for the last 2 decades. We need to adjust and adapt to this reality much like Pittsburgh adapted and adjusted to the lost of steel to foreign competition.

Because manufacturing, whatever it may be, supports many other industries. What would you suggest to replace it?

 

[HawkeyeNFO]

With the overwhelming debt of the US, maybe the country will eventually go bankrupt? What happens when the interest rates rise and you owe 16 to 20 trillion?

The US is not going bankrupt. Federal government can always just print more money, the resulting inflation would effectivelyt make its previous debts worth much less value. Cities, states, and counties don't have that option, so they need to be much more fiscally responsible.

 

[aja8888]

Because manufacturing, whatever it may be, supports many other industries. What would you suggest to replace it?

A note on this comment (from personal experience) is that in the town of Waterbury, Connecticut where I worked in manufacturing for years, manufacturing jobs have been "replaced' with retail jobs in new malls (one mall built on the site of the largest manufacturing plant in town), additional city employees to manage social needs programs, additional police as the crime rate has risen, and a collection of small service industries.

The many outcomes of the loss of those thousands of manufacturing jobs has been high unemployment, increasing crime rates, higher property (and other) taxes, lower property values, the loss of skilled workers due to folks relocating, and the general lowering of the average wage base in the area.

In the town of 110,000 population, here is a list of the current top employers now that manufacturing has shut down:

Waterbury's economic decline in the 1970s and 1980s resulted in it being ranked as having the worst quality of life of 300 U.S. metropolitan areas.
According to the city's 2010 Comprehensive Annual Financial Report,[13] the top employers in the city are:

# Employer # of employees
1 City of Waterbury 3,811
2 Waterbury Hospital 1,541
3 St. Mary's Hospital 1,279
4 State of Connecticut 1,225
5 AT&T Inc. 400
6 Naugatuck V Comm. Col. 384
7 United States Postal Ser. 270
8 Webster Bank (HQ) 256
9 Republican-American 252
10 MacDermid (HQ) 217

Only one manufacturer on the list (MacDermid - chemicals).

 

[JOHNNIE36]

Interesting aja8888. A look at your numbers on the top employers in Waterbury indicates that over 50% of the people are employed in government jobs that receive their wages through a tax base. Can that be sustained?

 

[aja8888]

Interesting aja8888. A look at your numbers on the top employers in Waterbury indicates that over 50% of the people are employed in government jobs that receive their wages through a tax base. Can that be sustained?

Johnnie: I still have a younger sister living there and semi-retired. She worked for Peter Paul at a candy plant for 30 years that was moved to Canada (I believe) about 4 years ago. Her husband is disabled. She is on SS and a small pension and he is on SS disability. They have a three story home in an old area of town that is worth ~$100,000 (their estimate) and pay property tax of near $10,000/yr. Clearly, I don't know how they get by, but do know they rent out two upper floors to make ends meet. Their children (two boys) moved out of the area for work years ago.

The last time I visited her (April 2012), I was shocked at the amount of homes that are abandoned and the general level of degradation of neighborhoods and the city in general. There was trash and abandoned cars everywhere and many older, near town neighborhoods were obviously going down hill. It reminded me of Detroit, but on a smaller scale.

How long can the tax base support government payouts to wages and services? That's a good question and I can't answer it, but I'm glad I no longer live there.

One thing to note is that a lot of people commute to NY city and the surrounding cities for work. My youngest sister did that until she passed away in April 2012. There also seems to be more good employment in Hartford where the insurance industry has concentrated.

I would suspect there are similar mid-sized towns like this in other states that have lost the traditional manufacturing base and are heading in the same direction as Waterbury. Detroit is clearly the top dog when it comes to this profile.

 

[NW-Bound]

Interesting aja8888. A look at your numbers on the top employers in Waterbury indicates that over 50% of the people are employed in government jobs that receive their wages through a tax base. Can that be sustained?

I think there are a lot of small businesses or mom-and-pop outfits that do not show up, yet add up to quite a bit. Thus, the government job ratio may be quite lower than 50%.

For reference, the ratio of government workers is 16.4% for the entire US.

For Sweden it is 34%, the highest in the world. France, Germany, and Italy are in the ball park, and all higher than Greece's number.

Singapore's is the lowest at 6.4%. Amazing!

PS. China is actually highest at 50%. That's because they still have many state-run companies. How can the private companies compete with the latter? Amazing!

 

[ChrisC]

Because manufacturing, whatever it may be, supports many other industries. What would you suggest to replace it?

I wouldn't look at this as one sector replacing another sector for job growth. The problems of high unemployment in Detroit simply go beyond the lost of a significant slice of manufacturing jobs. And I thought I read someplace a few years ago that the US economy was losing 12 percent of its manufacturing jobs to the foreign competition. I don't think there is a simple solution to the issue of high unemployment in city like Detroit and I'm not sure, as some might suggest in this thread, that lost of manufacturing jobs causes a parade of urban problems: crime, substandard housing, and flight to the suburbs. It can correlate with those problems.

I'll resist offering simple solutions to a complex problem. Though as you can see from this article a few years ago, Detroit was making a move to replace some of those manufacturing jobs with IT jobs. The Best Cities For Technology Jobs | Newgeography.com

 

[aja8888]

I wouldn't look at this as one sector replacing another sector for job growth. The problems of high unemployment in Detroit simply go beyond the lost of a significant slice of manufacturing jobs. And I thought I read someplace a few years ago that the US economy was losing 12 percent of its manufacturing jobs to the foreign competition. I don't think there is a simple solution to the issue of high unemployment in city like Detroit and I'm not sure, as some might suggest in this thread, that lost of manufacturing jobs causes a parade of urban problems: crime, substandard housing, and flight to the suburbs. It can correlate with those problems.

I'll resist offering simple solutions to a complex problem. Though as you can see from this article a few years ago, Detroit was making a move to replace some of those manufacturing jobs with IT jobs. The Best Cities For Technology Jobs | Newgeography.com

Of the 51 cities ranked, Detroit was 40th on that list. Pretty close to the bottom. I can't comment on the validity of the study, however.

 

[aja8888]

Here is an interesting perspective..

Detroit -- Why Hast Thou Forsaken Me?


The Corner Side Yard: Detroit -- Why Hast Thou Forsaken Me?

 

[samclem]

Detroit -- Why Hast Thou Forsaken Me?


The Corner Side Yard: Detroit -- Why Hast Thou Forsaken Me?

I think the author has probably mistaken an effect for a cause. And (unhelpfully) conflated "race" with "socioeconomic level." It wasn't whites who fled Detroit, it was the middle class--who happened to be disproportionately white. But middle class people of every ethnicity fled.

 

[NW-Bound]

I have been spending too much time looking at the problems in Detroit. Perhaps it was because I found that it was once called "Paris of the West", and was mesmerized by its decline.

As people here have said, there's a lot of blame to share, but the thing remains: at this point, I do not see how any business would want to set up shop here. The lawlessness that some residents here exhibit cause me goosebumps.

On youtube, there was a TV report of a black owner of a gas station being tormented by a group of teenagers who decided that they "owned" the store, and just hanged around to harass his customers. Police was called repeatedly, and the owner was advised to rent his own off-duty policeman.

The following video shows the mentality of some residents there. A home was invaded by neighbors, just because the home owner was absent for a day or two. On TV, a neighbor said nonchalantly "This is Detroit, and we will come squat in your home if you are not home". I do not know to laugh or cry.

At the end of the segment, the TV reporter said that the home owner victim was looking to move out. Note that the neighborhood looks quite nice, and not like the abandoned Detroit homes that are often portrayed.

This Is Detroit And We Will Come Squat In Your House If You're Not Home: They Are Stealing Houses - YouTube