Detroit: The Motor City Shifts Down

Long lines of jobless Detroiters were trailing out of the red brick office of the Michigan Employment Security Commission on Conner Avenue when Labor Secretary Peter Brennan stopped by for a recent visit. To his consternation, he was greeted with a storm of catcalls. "You promised us jobs," one man shouted. "You shouldn't come around here and smile at us. We're mad!" Added a furloughed Chrysler employee: "They ought to lay his ass off!"

One of the few outfits in the Detroit area that are hiring these days is the state Employment Security Commission, which has opened 22 temporary offices and taken on 1,000 paper shufflers to help handle the mounting claims for jobless benefits. In Detroit itself, close to 100,000 auto assemblers, cashiers, construction workers, technicians and middle-level managers--18% of the city's labor force--are unemployed. In the suburbs, thousands of others are without jobs. As Coleman Young, the black mayor of the nation's fifth largest city, put it, oh so mildly, in a recent speech, Detroit has "fallen on hard times."

The city's already horrific crime rate climbed 16% last year. Each month some 300 federally furnished mortgages are defaulted, and more and more homes fall into disrepair. Revenues from property and payroll taxes have sagged, and the municipal budget deficit could reach $40 million this year; 1,500 city workers have been let go so far, and more pink slips may be on the way.

For many of the unemployed, the auto industry's disaster is not yet quite real. The moment of personal financial reckoning is held off by the Supplemental Unemployment Benefit checks that ensure that laid-off auto workers continue to receive nearly 95% of their usual take-home pay. But SUB funds are rapidly being depleted; at current rates of payout, they could run out as early as May for some workers. The checks are what keep the juke joints along Wyoming and Livernois avenues full and make it possible for many unemployed workers to go hunting or take family trips as if on a paid vacation.

The industry's disaster, however, has come as a deep shock to the city. A shroud of resignation seems draped over Detroit's huge black community; activist leaders--who have been less active in recent years than they used to be--are encountering more apathy than anger on the streets, even though unemployment among blacks may be as high as 25%.

The area's white-collar residents are being laid off at levels not seen since the 1930s; 20,000 have been sidelined at Chrysler alone. Charles Beaudet, 52, a $22,000-a-year sculptural designer for Chrysler, was furloughed just before Christmas. He supports his wife and five children on his SUB checks, but he has cut out the monthly case of wine, the symphony concerts and other civilized frills. Beaudet worries that his self-respect is going too. "It hurts," he says, describing the experience of standing in an unemployment line. "It's demoralizing." Bankruptcy declarations rose 41% last year, to 4,040, and new claims are being filed at the rate of 85 a week.

Even so, Detroit retains some measure of optimism. Defying economic gravity, civic groups, led by Henry Ford II, are working hard to raise $100 million to continue construction of the Renaissance Center, a $600 million complex of hotels and office towers on the Detroit River. Despite the scary unemployment figures, a poll published by the Detroit Free Press last week suggested that four out of five still-working Detroiters believe that they will not be laid off this year. More than half of those questioned expected their families to be no worse off financially in a year. -

Actually, Detroit has been living with unemployment rates averaging 9% since the late 1960s, when the carmakers stepped up automation of their faculties and other local businesses moved out of town. When the recession hit, Detroit was already in the midst of what local Economist Ernest Zachary calls a "revolutionary restructuring." The result will be less dependence on manufacturing and more on the kind of service jobs created by a big new Michigan Blue Cross computer records center, expanded hospital facilities and Renaissance Center.

This promises a radical change in Detroit's role in the nation's social as well as economic life. Ever since Henry Ford I began offering an astonishing $5 for an eight-hour day back in 1914, the lure of high pay for hard work has attracted waves of the hopeful to the city: Poles, Italians and Canadians; legions of blacks and whites from rural America. The auto industry's sales collapse will diminish Detroit's historic place as a step on the way up the economic scale for blue-collar Americans.

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