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Shrinking City: Detroit Nikunj Gupta

Detroit was the centre of American car production. It was one of the richest countries in not

only the US but also in the world. Ford, Chrysler and General Motors were the “Big Three”

automobile countries attracting vast population into the city. Buildings after buildings came

up, concentrated infrastructure became common. The concept of skyscrapers was becoming

popular to accommodate more and more people.

But our ‘motor city’ started to lose its importance since the 1930s. It started losing its

population, i.e., started “shrinking”. According to Karina Pallagst, professor for International

Planning Systems at Kaiserslautern University’s faculty of Spatial Planning (she previously

worked at UC Berkeley’s centre for Global Metropolitan Studies (GMS) and the Institute of

Urban and Regional Development (IURD)), says that “A shrinking city is characterised by

economic decline and-as a consequence- the transformation of urban areas. In addition, loss

of employment opportunities tend to spark partial out-migration. In the United States,

shrinkage can either be part of post-industrial transformations related to the decline of the

manufacturing industry, or it can be triggered by economic changes in the so-called “post-

industrial transformations of a second generation” within the high tech industry(e.g. the

dot-com bust) [12]. (Pallagst, 2007)”

Picture source (Pallagst, 2007).

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The Figure shows the clusters of shrinking cities with over 100,000 inhabitants in the US. The cities are listed by their population growth rate, with Detroit showing the highest shrinkage rate. Detroit did not shrink overnight. It took decades and decades for the seed of

shrinking to grow and turn our ‘Motor City’ into the state in which it is

presently.

Suburbanisation

As we are talking about a ‘notable’ reduction in the size of population in

Detroit, suburbanisation is an important point to cover. Suburbanisation

caused people to start living on the outskirts of Detroit, indirectly leaving the

core area lonely. Slowly and slowly the city came to be known as the ‘ghost’

city.

According to the encyclopedia.com, “Suburbanisation describes the general

trend of city dwellers to move from the city into residential areas in ever-

growing concentric circles away from the city’s core. The trend began briefly in

the nineteenth century and the exploded after World War II (1939-1945)” [4]. There are many reasons because of which suburbanisation took place in

Detroit.

One of the most important reasons that caused suburbanisation was the fact

that the city centre had become an extremely crowded urban place. According

to Kenneth T. Jackson, author of the book “Crabgrass Frontier: The

Suburbanisation of the United States (1985)”, it was a very congested city.

Residences, shops and all types of infrastructure existed side by side. Building

were tall but not wide, streets were narrow, crowded together. People wanted

to live close to their workplaces at that time firstly because transportation

systems were not very good and secondly, foot and horses were the only

modes of transport prevailing at that time. But, such situations didn’t exactly

provoke the idea of suburbanisation at that time but was an important point in

time when seeds were sown. (Jackson, 1985)

The next important factor that led the city to get suburbanised was the

“Automobile Age”. Though the road and street systems was not very good in

the city, Ford’s Model T had become “the staple of American auto consumers”

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[4]. The car was durable, cheap and could easily run over uneven roads, dirt

and ditches. In the “Automobile Age”, travelling to rather far places had

become easier.

This still didn’t cause a lot of suburbanisation in Detroit. According to Lewis

Munford in his book “City in History: Its Origins, Its Transformations, and Its

Prospects (1961)”, though city planners began to consider every other

possibility to the car, suburban growth was slow. Munford (1961) found that

“Only 17 percent of the nation’s population lived in suburbia in 1920. As with

everything else, the Great depression retarded growth. By 1940, only 20

percent of the population was classified as suburban.” (Munford, 1961) [4]

In Detroit, during the time of World War 2, many of the central factories were

being used to produce military products and materials required for the war.

Also new factories and industries were set up as the existing ones were not

enough. With newer infrastructures, new transport system was also

demanded. The city started expanding to accommodate the increasing

population and infrastructure. If Detroit’s map including nearby areas, if looked

upon closely, we can figure out that there is no major natural boundary to the

“motor city”, and for such a city to expand, is not a difficult task. Now these

newer factories were not built in the central region of Detroit, in fact that’s

why they demanded a proper transport system. Later, after World War II,

when these factories were no longer required to produce military armaments,

vehicles and other such items, the quite famous (by that time) automobile

industries started to shift there. This can be termed as “decentralisation” of

these industries. To live near to their workplaces, people started migrating

outwards, away from the city. Also the transportation systems and facilities

had already been improving, so creating parts locally had become less

necessary, and outsourcing of jobs began to trend [6].

The increased job opportunities in Detroit in not only during the Second World

War (in military factories) but also post war era (“The Automobile Age”) led to

increased incoming of population, especially the black from Africa, to Detroit.

Between 1940 and 1960, about one-third of the population of the city had

grown to be consisting of the blacks [5]. This caused a feeling of resentment

amongst the whites, due to various reasons such as ego issues and racial

discrimination riots, and they fled to the periphery of the city. The whites were

not ready to take the blacks for their neighbours.

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However, the “great suburban explosion” took place after the Second World

War [4]. According to Eric Foner and John A. Garraty, the editors of “The

Reader’s Companion to American History”, “The GI Bill, officially the

Servicemen’s Readjustment Act of 1944, provided many benefits to veterans of

World War II. It established veterans’ hospitals, provided for vocational

rehabilitation, made low interest mortgages available, and granted stipends

covering tuition and living expenses for veterans attending college or trade

schools [7].” This insured issuance of new bachelors’ degree and so this

created a new “professional class” in the United States. Veterans who opted

for vocational education improved the service sector [4]. Both classes started

increasing their population and needed low costing houses. According to the

Housing Act of 1949, federals backed the home loans [8], shortage of houses

after the Second World War posed as an obstacle [4].

An ideal solutions to all such problems was found in the suburbs.

Transportation was no longer an issue as it was the “automobile age”. (Car

sales had reduced during the war time period [4]. Firstly because millions of

men were outside the country, secondly, gasoline was rationed which

prevented travelling during the war and thirdly, during the war many of the

factories had been turned into military products manufacturing units. But still,

the sales increased after the end of the war, the number jumped to more than

2 million in 1946 and more than 5 million in 1949 [4]. Many American families

now earned enough money, as the men would be earning their army pay and

the women earned an income by working in the way industry plants. These

earnings gave them plenty for a down payment of a house and buy them a car.

All these facts and incidents that led to suburbanisation meant that people

were actually leaving Detroit and had started living outside. The motor city

which had been known for its high population had started losing its population,

i.e., was “shrinking”.

The Great Depression

The Great Depression is the world economic crisis in the US that caused

widespread unemployment, a near halt to production and construction and

89% decline in stock prices. 29th October, 1929 (commonly known as the “Black

Tuesday”) is regarded as the day of the start of the ‘depression’, when the

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stock market crashed [3]. On “Black Tuesday”, some 16 million shares were

traded, on a loss, creating a panic over the Wall Street [2].

This crash led to the loss of consumer confidence. Product sales came down by

huge amounts. Companies reduced the production of products and as a result

of the losses they faced, they started firing their employees. Construction of

new factories and industries came to a halt. Wages were reduced by a drastic

amount. Matters continued to become worse. By 1930, about 4 million

Americans were looking for work (but could not find it) and by 1931, that

number rose to 6 million [1]. The Great Depression is one of the major reasons

because of which there was a huge population decline in Detroit. Automobile

jobs were lost, people had become homeless, unemployed and started out-

migrating the city. Companies started firing the working staff. The people who

retained their job started getting a low salary.

Also during the late nineteenth century and early twentieth century,

population in Detroit and other American cities increasingly concentrated and

led to many cultural developments [9]. The literacy rates ‘sky rocketed’ and

newspapers, magazines and books gradually became an important source of

knowledge. According to encyclopedia.com, “Giants in the journalism field

such as Joseph Pulitzer, William Randolph Hearst and Edward Wyllis Scripps

purchased and merged big city newspapers. Advancing printing techniques,

expanded communication, improved newsgathering efficiency and increased

advertising revenues turned huge profits for the newspaper organisations that

quickly became corporate businesses [9].”

But then, when the Great Depression hit in 1929, the newspaper business was

also struck hard due to loss in advertising revenue. This led to lowering of

wages of employees, firing of reporters and editors and increase in workloads

of existing staff members. Around 40 percent of advertising revenue had

decreased between 1929 and 1933 [9]. Such sudden unemployment even in

the advertising and newspaper sector along with other residents of Detroit

(the newly fired automobile works men) were forced to leave the city in search

of jobs in other places.

According to an article from 2003 (THE GREAT DEPRESSION AND THE

AMERICAN PEOPLE (1928–1933), 2003), “the national unemployment rate

skyrocketed from 3.2% in 1929 to nearly 25% in 1933. In some areas, the rate

was even higher for instance, in Detroit, unemployment was over 50% in the

early 1930s. More than 100,000 businesses closed between 1929 and 1932.

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(By 1932, 152 businesses per 10,000 were closed – a mark never reached

earlier or till date in American history).”

The Great Depression caused the pause of credit system for consumers as

banks were in loss [3]. So now, the consumers had suddenly lost their power to

purchase good and the unsold products were piling up in the godowns

(warehouses). This led to halt the production of newer goods in Detroit.

The Great Depression rose the “Crime Rates” in not only Detroit but also other

American cities that were affected by the Depression [10]. People had no other

option but to either become a criminal to put food on their tables or to commit

suicides. The situation had also increased the number of suicides in Detroit, in

turn helping in decreasing the population which had already started shrinking.

Demographic trends changed sharply [10]. Birth rates fell sharply, especially

during the peak times of the Depression. The Americans now had also learned

about birth control in order to reduce their family expenses. Mass migrations

were noticed all over the cities. “The Great Plains” lost a lot of their

populations to cities like California and Arizona [10].

The Great Depression proved to be a serious and crucial factor leading to loss

of huge amounts of population by Detroit. People had lost their confidence in

investments, jobs were lost as companies and industries were shut down and

as discussed above crime rates had also been increasing, so people ran away.

Bankruptcy

In October 2009, the nation struggled with worst financial crisis since the Great

Depression, and so Detroit decided to use 15.2 million dollars from its stimulus

money to help 3500 city residents hold off eviction from their property or if

they were homeless, then to pay for housing. The city was critically poor and

had to face the auto-industry’s financial crisis on top of that. It was just about

two generations ago when the city was healthy, the heart of the American

economy, with the auto-industry accounting for one in six jobs in the whole

nation. But now, all that had collapsed. General Motors was trading as a penny

stock before it got bankrupt in 2009. This automobile industry’s collapse,

supported by deindustrialisation, proved to be brutal for Detroit. It was the

nation’s fourth largest city (US Census Report, March, 2011). In March 2011,

the US Census Report said that the population of Detroit had dropped to

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714,000 people which is down by a quarter million since 2000 and by more

than 1.1 million people from its peak of 1.8 million residents in 1950.

Surprisingly, no other American city faced such a huge population decline.

Chicago lost 964,000 people since 1950s but still has about 2.7 million people

residing in it. That is about 25 percent of its peak of 3.62 million population in

1950. Detroit lost a shocking 60 percent of its peak population (Martelle,

2012).

The oil embargo (an official ban on trade) of the early 1970s and its

consequences for the domestic auto industry added fuel to the already

declining city. The number of jobs fell by over half (52.8 percent) between

1970 and 2010, and the number of residents in employment dropped by 43.5

percent over the same period. People started abandoning Detroit in search of

new jobs and new ways of earning a living. The Great Recession of 2008-09

augmented to the problems by making the housing opportunities in the

suburban areas more affordable. Detroit residents took such opportunities and

obtained newer homes in communities that offered a more desirable tax-

public service package. (Laura A. Reese, September, 2013)

Such high indebtedness to the federal government for new development

projects left the city with fewer funds to support community based

organisations. The city introduced new taxes: a utility use tax in 1962, a

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municipal tax in 1964, and a casino wagering tax in 1999. (Laura A. Reese,

September, 2013)

Detroit’s General Fund has five major sources of revenue: property tax, income

tax, utility use tax, state revenue sharing and casino wagering tax. All these are

making tough for people to live in the city. The city became expensive as it had

already gone into debts and revenues were being collected to pay the money

back that was borrowed. Detroit residents and businesses are subject to

property taxes that are higher than most of the cities in Michigan. The table

given below compares property tax burdens on property in Detroit and Grand

Rapids, Michigan’s second largest city. (Laura A. Reese, September, 2013)

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The city now just has 10,525 employees, down from 17,772 earlier (Table 3).

According to the new proposal, there will be elimination of an additional 2,227

positions soon. All this is occurring due to bankruptcy that Detroit is facing.

These are all cost saving measures which the city is taking. Other cost-saving

measures include wage cuts of ten percent, elimination of step and merit

increases, reduction in number of paid holidays and a reduction of the pension

multiplier. All these factors added to the incentives of leaving the city for good.

(Laura A. Reese, September, 2013)

It’s a big factor. There are abandoned factories all over the city built in the

post-war years, most of which have multiple stories. Also, the Japanese auto

invasion began cutting into Detroit’s sales. General Motors, Chrysler, Ford and

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hundreds of other auto parts companies looked forward to moving outside the

city where they would build one-storey plants that could handle more

assembly lines. Slowly, more and more companies began to move out leaving

‘the hulking buildings to squatters’. Detroit’s tax base was eroding. By the time

the auto industry declined in 2009, only a few factories from GM and Chrysler

were left. GM was the only one that had its headquarters in Detroit, though it

had its research and testing centres with thousands of jobs outside the city

[13].

The Big Three

Summarising Scott Martelle’s views (as written in his book Detroit: A

Biography), there is a tendency to blame The Big Three auto companies and

their corporate leaders for abandoning the Detroit workforce upon which they

made their fortunes. It was them who decided to decentralise from Detroit,

and then to globalise. They are also accused of putting their interests of profits

and shareholders ahead of those of the communities that gave rise to the

industries in the first place. Corporate decisions can destroy communities, a

major component in Detroit’s collapse. Scott says, “For years our political and

social culture has put the interests of corporations ahead of interests of

individuals and community stability. That has led to the decimation of the

middle class, and well-paid working-class jobs, as US based corporations

shifted production overseas to keep up with the global drive for the lowest

possible production costs. In theory, that is good free market economics. But in

practice, those production costs are, on the local level, individual jobs and

neighbourhoods.” So, indirectly, the social and economic stability has been

traded for higher profits for corporations which has made cities like Detroit

just countless small manufacturing towns for the nation. Such are the effects

of national policies and until such policies are changed to put the needs of

people and communities ahead of corporations, ‘there is no answer to the

troubles afflicting places like Detroit.’ (Martelle, 2012)

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Racism

In Urban Fortunes, the writers (Logan and Molotch) challenged the view that

the economic growth is good, saying that these developments are benefitting

some groups while oppressing others. Detroit’s supposedly beneficial policies

are creating conflicts based on race, class, tenure and age, rather than uniting

all the city’s residents and neighbourhoods under a common cause. Until these

conflicts are resolved, Detroit is not going to recover. Given Detroit’s racially

divisive history, many readers may assume that racial division is the primary

reason for Detroit’s economic collapse. (Silver, 2015)

There was a major riot in 1943 which reflected an increasing competition for

housing and jobs between newly arrived African-Americans, white migrants

from South and ethnic whites. The disturbance left 34 dead and was America’s

deadliest civil disturbance to date (Sugrue, 1996). There was another major

racial conflict in 1967 facing 43 deaths. There were many reasons and factors

that contributed to the violence like the brutality against blacks by the largely

white Detroit police force. A persistent issue was whether blacks and whites

could live on the same blocks. Issues of housing were prominent in Detroit

during the World War II when the black and the white population grew rapidly.

Whites tried a lot to keep away the African-Americans but the latter continued

to flock into the city in huge numbers.

Employment was another area that caused tension between the two races. In

the 1930s, for instance, the schools were willing to hire blacks to teach at

elementary schools but it took from civil rights groups to get them hired in

secondary schools. Detroit became home to “Hate Strikes” in which whites

would walk away from a job if blacks get promoted to better jobs and the

blacks walking away if they are not treated as equal to the whites. The solution

to these racial conflicts was the withdrawal of most of the whites from the city

(Massey and Denton 1993). Attractive new homes were offered in the suburbs

with more amenities at a lower cost to the whites with exceptions. Detroit

faced a tremendous decline in the city’s tax base due to the leaving of the

whites in large quantities. The old houses did not provide for amenities like a

bedroom for each child, modern kitchen, efficient heating and cooling, a two

car garage, and a reasonable amount of space around the house. All these

were facilitated by the new houses in the suburbs. So the whites moved out in

considerably large numbers. If there had been no “race division” issue,

Detroit’s population would have not declined so rapidly and a somewhat larger

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quantity of area’s middle class people would have stayed in the city itself. This

would have prevented bankruptcy to an extent. Residential segregation

hastened bankruptcy in Detroit. (Silver, 2015)

Insecurity to Residents of Detroit

Over the past few decades, Detroit has been plagued by internal conflicts and

controversies, turning out to be long-term annoying challenges which are

being treated as short-term problems. The city’s responses to these challenges

have been ineffective. Laura A. Reese, in her paper No Easy Way Out, says that

by showing temporary budget deficits, corporate officials continue to justify

their high expenditure. Underfunding retiree pensions and other benefits also

lie in the similar unwise and immoral category. She also says, “Funding cash

flow deficits with long term borrowing is not a rational long term policy. And, it

has been observed that Detroit has been funding budget deficits with bonded

debt since the Young administration, which was around 30 years ago.” These

misguided policies has pushed the city into bankruptcy. The city has now come

to a stage of deep crisis due to ‘accumulation’ of debt and long-term liabilities.

“The political and civic culture of Detroit and its metropolitan region bear a

great deal of responsibility for failing to lead the city out of the ongoing chronic

economic challenges as well as its current crisis,” says Laura Reese. (Laura A.

Reese, September, 2013)

All this has made Detroit’s residents create a feeling of insecurity due to

concerns over personal safety, financial security (at least in home values),

better educational systems for their children, and a desire for a more stable

and satisfying daily existence.

Now, the government agreed to deep ‘staffing cuts’, which augmented not

only the high unemployment rate but also the delivery of some of the key

services and so in turn the income taxes those workers were paying. In April,

2012, Robert Bobb, the school district’s state-appointed emergency financial

overseer, announced that he would be sending layoff notices to nearly 5,500

school teachers (Martelle, 2012). Schools are where the new generation gets

trained to forge a new kind of life and when schools fail a city cannot survive.

One more factor that led to the case that most of the employees turned out to

be uneducated was the fact that they got jobs in large factories with assembly

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lines. They had monotonous work to do all day which could be learnt by

practice and no sort of education was necessary. So, the residents of Detroit

and other American cities turned out to totally jobless when these assembly

lines were no longer in operation. (Martelle, 2012)

As observed by Michael Harrington in his book The Other America: Poverty in

the United States, “Poverty is often rooted in a specific place, and the spread of

impoverished neighbourhoods in urban centres, and the inner-ring suburbs,

serve as an infrastructure for poverty.” Sharkey writes, “Over seventy percent

of African American who live in today’s poorest, most racially segregated

neighbourhoods are from the same families that lived in the ghettoes of the

1970s. I do not mean that children grow up and remain in the same physical

space, but rather children remain and grow up in the same type of

environment. The level of poverty and racial composition of families’

neighbourhood environments remain incredibly similar across generations of

family members.” (Sharkey, 2013)

Such racial tension and poverty gave people enough reasons for abandoning

the city in search of new job opportunities and the desire to live new lives in

new cities.

Conclusion: Detroit Today

The scope of Detroit’s bankruptcy has never been known to be comparable

before amongst the American cities, but the auto industry led the city’s boom

uniquely. By mid-century, as manufacturing jobs increase, so did the city’s

population, but within a generation itself, everything started falling apart.

Union disputes and racial unrest would ‘leave their mark’ as automation began

to replace jobs. An aging population, who were not getting their pensions,

along with others who could not afford property taxes, continued to flee the

city, away from Detroit’s increasingly underfunded schools and city services

[14].

The responsibility to help Detroit survive still lies in many corporate shoulders.

In 2013, after many protests of this city’s elected leader, Governor Rick Snyder

of Michigan called for an appointment of an emergency manager to repair the

city’s finances. Also, a Washington bankruptcy lawyer, Kevyn D. Orr, was

appointed to the job. The city’s then-new mayor, Mike Duggan, a former

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hospital executive and prosecutor, had to share power with Mr. Orr as they

dealt with questions regarding the future of the city. The North End has not

only glorious homes but also some of the city’s “harshest blight”. Thought it

has residents like judges, doctors and other professionals, it also is a home to

mostly low-income backs who bear the “brunt” of Detroit’s economic decline

[14].

Presently, a city of 1.8 million in 1950, Detroit is home to nearly 690,000

people, along with thousands of abandoned buildings, vacant lots and unlit

streets. Residents are struggling through diminished city services, soaring

poverty rates, trying to preserve their homes and to get a sense of community

and overall safety [14].

Detroit formally emerged from bankruptcy in December, 2014 which is about

18 months after the time when it had crated history by becoming the largest

municipal bankruptcy in American history. The city’s leaders are beginning to

plan Detroit’s recovery which include plans of renewing city services. And

while the business leaders and foundations have committed funds to help

revitalisation, a commission would check out the city’s finances for some years

that would include a majority of state-appointed representatives. But the road

to full recovery will be long. Detroit is still struggling with a costly pension-

system, emptying neighbourhoods, crime, insufficient city services and

immense ‘blight’ [14].

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References [1] http://www.history.com/topics/great-depression

[2] http://www.u-s-history.com/pages/h1569.html

[3]http://topics.nytimes.com/top/reference/timestopics/subjects/g/great_depression_1930

s/index.html

[4] http://www.encyclopedia.com/topic/Suburbanization.aspx

[5] http://shrinkingcities.com/detroit.0.html?&L=1

[6] http://detroitwillrise.weebly.com/suburbanization.html

[7] http://www.history.com/topics/world-war-ii/gi-bill

[8] https://bulk.resource.org/gao.gov/81-171/00002FD7.pdf

[9] http://www.encyclopedia.com/article-1G2-3424800047/journalism-1929-1940.html

[10] http://www.ushistory.org/us/48e.asp

[11]http://www.littlejohnexplorers.com/jeff/history/greatdepressionfromtext.pdf

[12]Karina Pallagst. In Proceeding of Conference on the Future of Shrinking Cities, UC

Berkeley, 2007.

[13] http://globalnews.ca/news/727460/why-did-detroit-go-bankrupt/

[14] http://www.nytimes.com/interactive/2014/07/06/us/detroit-the-path-to-recovery-

from-bankruptcy.html?_r=0

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Works Cited Jackson, K. T. (1985). Crabgrass Frontier: The Suburbanisation of the United States. Detroit.

Laura A. Reese, G. S. (September, 2013). NO EASY WAY OUT Detroit’s Financial and Governance

Crises. 36.

Martelle, S. (2012). Detroit: A Biography. Detroit.

Munford, L. (1961). Lewis Munford in his book “City in History: Its Origins, Its Transformations, and

Its Prospects.

Pallagst, K. (2007). Proceeding of Conference on the Future of Shrinking Cities., (p. 8).

Sharkey, P. (2013). Stuck in Place: Urban Neighbourhoods and the End of Progress toward Racial

Equality. Chicago: University of Chicago Press.

Silver, H. (2015). Editorial: The Urban Sociology of Detroit.

Sugrue, T. J. (1996). The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit. Princeton

University Press., 29.

THE GREAT DEPRESSION AND THE AMERICAN PEOPLE (1928–1933). (2003).