Job Market Improving in Detroit
On July 18, 2013, the city of Detroit became the largest U.S. city to file for bankruptcy. With over $18 billion in debt, the city was left to deal with numerous problems, from malfunctioning streetlights, to public utilities issues, to a crumbling public school system.
In an attempt to save the city and the auto industry that was flailing around in the water, President Obama enacted an $80 billion bailout. This bailout was met with tremendous opposition and outrage from the public. Many conservatives saw Obama’s actions as another way of grabbing power. They felt that the government had no business in taking over the actions of private corporations or just meddling in the economy at all. Mitt Romney’s New York Times op-ed “Let Detroit Go Bankrupt” had become a rallying cry of several conservatives. Regardless of the opposition that he faced, Obama saw this bailout as a necessary action to protect not only Detroit but also the numerous middle class families relying on the jobs provided by the auto industry. Regardless of the debate surrounding the bailouts, the main question remains: did they work beyond the lower wages that are found in the fast food industry?
Improving Economy of Detroit
Several conservatives who opposed the auto bailouts did so under the assumption that it would prevent job growth by using resources to save an industry that could not be saved. However, the opposite seems to have happened. Since the bailout, companies such as Chrysler and GM have been slowly bouncing back. Jobs in the automobile industry have been rising and the unemployment rate in the state of Michigan is the lowest it has been since 2001. A report from the Center of Automotive Research says that the 2009 bailouts have saved nearly 3 million jobs.
What does this mean for the economy of Detroit? With the Michigan unemployment rate at 5.5%, things are looking up. The people of Detroit are optimistic that the economy will continue to improve and that the city can begin to pay off its mountainous debt. The president of the Ford Foundation Darren Walker recently visited the city said, “What continues to inspire me is the optimism in the city. People in Detroit have a boundless capacity to be the best and look to the future.”
Fuel Efficient Cars the Salvation for Detroit?
Now that the auto industry is beginning to improve, what’s next for the city of Detroit? Despite the rise in sales of SUVs and pickups, President Obama still has something to say to the city. His advice? Build more fuel-efficient cars. Obama told the Wall Street Journal that if the American auto industry and Detroit are to survive, then Detroit should start to focus on picking up the lion’s share of the fuel-efficient automobile market.
Because the demand for larger cars is so high, U.S. automakers are making more of a profit on smaller cars than larger ones. Ford announced recently that it would lay off 700 workers at its Michigan Assembly plant due to decreased sales. With the falling gas prices, consumers are more likely to be able to afford these larger cars. However Obama warns that these low gas prices will not last forever. He encourages cities like Detroit to leaders in the fuel-efficient car industry, something that will probably serve the American people well in the future.