News Story

Despite the Hype, Detroit's Job Growth Among the Lowest in the State

State's employment comeback is real, but in Motown not so much

While Michigan has been deemed the “comeback state” by the governor, the city of Detroit’s recovery since the Great Recession has been among the weakest of the state’s major cities.

Detroit ranked fourth from last in employment growth from June 2010 to June 2016 among the 81 municipalities with a population of 25,000 or greater. Employment in the city grew just 4.3 percent over that six-year period, according to the U.S. Bureau of Labor Statistics.

Bay City had the lowest employment growth at 1.7 percent while Plainfield Township had the highest at 19.3 percent. From June 2010 to June 2016, Michigan's overall employment increased 9.0 percent.

While the media has heralded a Detroit comeback, the jobs data offers a bleaker picture.

“Detroit’s recovery has been overstated,” said James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy. “The city’s recovery is among the weakest in the state.”

There were several factors that have led to slower growth in Detroit and the surrounding region, according to Colby Spencer-Cesaro. She’s the senior director of research and strategy at Workforce Intelligence Network, a southeast Michigan collaborative effort between nine community colleges, seven workforce boards and various economic development partners.

According to Spencer-Cesaro, the industry mix in the region is shifting from high-volume employment companies, and those type of companies are using overtime rather than hiring additional workers.

“This looks like productivity but really companies are leaning away from hiring full-time workers and getting more out of their current workforce,” she said in an email.

There is not a supply of qualified labor to meet the demand for emerging jobs in fields such as information technology, robotics, mechatronics and health care.

“The issue here is that while these are great jobs and employers are scrambling to find workers, the talent just doesn’t exist on a large enough scale in the region to meet demand,” Spencer-Cesaro said. “Growth in demand is strong, but employers are seeking individuals with specialized training and often a degree. Detroit is missing the critical mass of individuals ready and trained to take on these new high-tech jobs.”

Another factor is that the size of the labor force in the Detroit area has been decreasing.

“After the recession, people just did not rejoin the labor force and many young people have yet to join,” Spencer-Cesaro said. “The current labor force is older in the region as well with many individuals hanging onto employment as long as possible to recoup retirement fund losses.”

She added: “In summary, there is no single reason why employment in Detroit is growing at a slower rate than other parts of Michigan. It is a combination of several factors that are causing job growth, and in turn economic growth, to run at a turtle’s pace.”

Correction: The data for Detroit employment growth is from June 2010 to June 2016. The story had an inaccurate month.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.