General Motor Corp’s bankruptcy is the last thing Detroit and the state of Michigan need.
Michigan already has lost 780,000 jobs this decade, the most of any state. Its April unemployment rate of 12.9 per cent was the highest in the country. The fourth-largest US city for four decades starting in the 1930s, Detroit now ranks 11th. Its population of 916,952 is less than half the peak of 1.85 million in 1950.
Now, with 6 of the 12 plants on GM’s bankruptcy hit list located in the state, Michigan and Detroit are bracing for what may be an accelerated exodus of people and jobs.
“People have no job, no home, no credit and no reason to stay,” said Bob Daddow, deputy executive of Oakland County in suburban Detroit, which expects to lose one-third of its property-tax revenue from 2007 to 2011. “We’re very much still on a downward spiral and we haven’t hit bottom yet. I don’t see anything that will be good with the bankruptcy of GM.”
One-third of the population of Detroit, GM’s hometown, lives in poverty. That’s the most of any US city with more than 250,000 people and almost triple the national rate. Public schools graduate 32 per cent of their students, according to a study by Michigan State University, compared with the national average of 72 per cent.
With rising white-collar job losses, the pain is seeping into the suburban ring surrounding the city, said Kevin Boyle, a Detroit native who won the National Book Award for an account of race relations in the city in the 1920s.