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On Thursday, April 21, 2016, the members of the Detroit Association of Business Economists (DABE) were presented with an excellent overview of the current financial state of the Detroit Public School (DPS) system. Declining enrollment has become one of the most significant problems for DPS because of the per-student funding model used by the state.
In addition to the operating shortfalls, the schools need to continue to fund accrued legacy costs for pensions and health care. A recent proposal approved by the state senate would permit Detroit to adopt a model used by other distressed school districts in the state.
On Thursday, March 17, 2016, members of the Detroit Association for Business Economics (DABE) were presented with an extremely in-depth presentation entitled “State of the global economy: Recovery, flat, or decline?” by Dr.
Teolis highlighted numerous explanations for the recent slow pace of global economic growth (such as supply-side headwinds, a debt overhang, and a savings glut) that have been offered by world-renowned economists. Detroit’s population fell by almost 50% from its peak of 1.85 million in 1950 (1) to around 950,000 in 2000.
In this blog entry, I will address these questions by using the County Business Patterns (CBP) data series from the U.S. Overall, the number of Detroit business establishments decreased 22.3% over the period 1998–2013, according to my calculations using CBP data. Anyone familiar with Detroit’s narrative will likely be able to give several reasons why its business activity has declined over the past few decades.
Given the narrative about Detroit, it is natural to wonder how its recent business losses compare with those of its surrounding areas.
Table 2 shows that despite the 2001 and 2007–09 recessions, the number of business establishments in the nation as a whole increased over the period 1998–2013.
When examining industry business patterns in the city of Detroit, it is not surprising to find that in percentage terms, manufacturing experienced the greatest loss of businesses over the period 1998–2013. One may be somewhat surprised by which subsectors of manufacturing experienced the greatest losses of business establishments (not shown).
Because the most recent data available are 2013 data, I am unable to provide any definitive insight into any possible changes in the trend of establishments leaving Detroit since the city exited bankruptcy in late 2014.
During the year, the D3 manufacturers also negotiated a new contract with the United Auto Workers (UAW) union, aimed at rewarding workers for remaining loyal during the hard years of the recession while at the same time allowing the companies to remain competitive with their global counterparts.
The discussion continued with a presentation from Dziczek entitled “Process and Outcome of the 2015 UAW Auto Negotiations,” in which she summarized the 2015 contract negotiations, focusing on the union’s gains and losses. In summary, most of the cost of the contract to the original equipment manufacturers (OEMs) was in the form of one-time cash payments rather than ongoing cost increases.
On December 4, 2015, the Federal Reserve Bank of Chicago hosted its 29th annual Economic Outlook Symposium (EOS). According to the September Midwest Economy Index (MEI), the pace of economic growth in the five Seventh District states (Illinois, Indiana, Iowa, Michigan, and Wisconsin) as a whole remained below its long-run average. Income in Michigan still significantly lags the national average, but is slowly catching up. Based on the first nine months of available data, Michigan’s economy is estimated to be growing at 2.2% on an annualized basis. On Thursday, October 15, 2015, the Detroit Association of Business Economists met at the Detroit Branch of the Federal Reserve Bank of Chicago and heard an in-depth presentation on the U.S.
A quick look at the four components for the MEI show Michigan’s strong contribution for June was driven mostly by strength in manufacturing and positive contributions from the service sector and consumer spending. Based on the first six months of 2015 data used to generate the MEI, Michigan’s economy looks to be currently growing by an estimated 2.3% rate on an annualized basis.
The data also suggest that Michigan’s economy still remains highly dependent on the manufacturing sector, which accounted for 21.2% of Michigan’s gross state product (GSP) in 2014.
While Michigan never relied solely on the auto industry for employment and economic growth, this industry’s importance to the state should not be overlooked. While some of the overall service sector growth has been in more high-skilled, high-paying industries, such as professional and business services, there has also been significant growth in low-skilled, low-paying industries, such as education and health services and leisure and hospitality.
In a recent blog, I shared my observations about Pittsburgh’s efforts to revitalize its urban core. Policy professionals, researchers, and other experts will gather in Detroit for a two-day summit–“Revisiting the Promise and Problems of Inner City Economic Development,”—at the Renaissance Center on September 15th and the Federal Reserve Bank of Chicago—Detroit Branch on September 16th.
Day 1 will focus on what’s currently happening in Detroit, with an introduction by the Chicago Fed’s Regional Research staff and a bus tour of Detroit provided by the Chicago Fed’s Community Development & Policy Studies group. For Detroit or any Rust Belt city looking to revitalize its urban core, Pittsburgh is often brought up as a model to follow. On June 18–19, 2015, the Federal Reserve Banks of Cleveland, Philadelphia, and Richmond sponsored a policy summit on housing, human capital, and inequality in Pittsburgh. From the table, it’s clear that both cities lost a similar percentage of their respective populations after peaking in 1950. The other statistics in the table depict a higher standard of living in Pittsburgh versus Detroit.
When looking at the chart, keep in mind that the city of Pittsburgh lost population in this time frame, yet incomes have started to record positive gains in recent years.
My business trip to Pittsburgh began by taking one of its rapid buses(3) to the neighborhood of East Liberty, located within the East End of Pittsburgh.
In the late 1990s, then-mayor of Pittsburgh, Tom Murphy, noticed the relatively poor condition of the East Liberty neighborhood when compared with wealthier neighborhoods Highland Park to the north and Shadyside to the south.
Because I took a rapid bus, my ride to East Liberty from downtown Pittsburgh only took ten minutes.
As I left the transit station and entered the core area of East Liberty, I was struck by the contrasts in the types of businesses and development.
During the summit’s panel on redefining Pittsburgh, Bill Flanagan, chief corporate relations officer, Allegheny Conference on Community Development, said that city leaders and stakeholders looking to revitalize their cities must learn to listen, must craft public policy with much forethought, and must be patient because civic engineering takes time to implement.
In a separate panel, Bill Peduto, mayor, City of Pittsburgh, shared some of the policies and programs he’s participated in or promoted during his tenure on the Pittsburgh City Council and now as the mayor.
It’s easy to draw a comparison between Pittsburgh and Detroit because both cities saw a majority of their respective fortunes rise and fall with labor-intensive durable goods manufacturing industries. What the common observer may not realize is the forethought and diligence Pittsburgh leaders and stakeholders had regarding their city’s future. Bill Flanagan’s advice for cities and their stakeholders most definitely applies to Detroit, especially the two pertaining to listening and public policy.
The importance of social mobility and neighborhood investment that Mayor Peduto underscored at the summit is shared by Detroit Mayor Mike Duggan, as demonstrated in his 2015 state of the city address. Detroit faces the same obstacles Pittsburgh faced and continues to face, though the magnitude of those obstacles appears larger in Detroit.
Adding to the problem, DPS has been funding its declining enrollment and legacy cost deficits through borrowing for years. David Teolis, senior manager, economic and industry forecasting—international, General Motors (GM). The zip codes shown below were used to analyze the change in the number of business establishments in Detroit over the period 1998–2013 (5). Besides the outward migration of the residential population, the downsizing and suburbanization of the local manufacturing industry, the deterioration of the city’s talent base as a result of the struggles of the Detroit Public Schools (DPS), government corruption, and the worsening condition of the city’s infrastructure are just some of the contributors to Detroit’s downward trend in business activity. Table 2 shows the change in the number of establishments by selected areas in 1998 versus 2013. However, the number of business establishments declined throughout most of Michigan during this time.
Table 3 shows the change in the number of business establishments by industry during the sample period. Detroit lost a higher percentage of establishments than its surrounding areas, the state of Michigan, and the United States. By many anecdotal accounts, numerous new establishments have settled in the Downtown, Midtown, Corktown, and other select neighborhoods where the most significant public and private investment has occurred of late. The 48239 zip code area lies predominantly outside the city of Detroit, so it wasn’t included in the analysis.
The North American economies will grow at a slow and steady pace, with auto sales hitting a new record high. The modest recovery in Western Europe will continue, along with modest growth in new vehicle sales.
The end of the commodity boom will impart significant downward pressure on many emerging and commodity-dependent economies.
Maintenance of health care benefits without additional cost to the workers with the same health care for everyone at General Motors and Ford.
Part of the problem faced by the UAW stemmed from the fact that younger workers wanted to see more job security and hiring as part of the contract because that would push them up the pay scale to tier 1 wages. The EOS allows economists, business leaders, financial analysts, and other experts to gather and share their respective views on the U.S. For a more in-depth look into what was presented, please click here to read the Chicago Fed Letter for the event.
Growth in real personal consumption expenditures was slightly higher than anticipated, partly because of stronger than expected growth in light vehicle sales. The (then-anticipated) interest rate hike in December by the Federal Open Market Committee (FOMC)—the Federal Reserve’s monetary policymaking arm—shouldn’t dampen lending for a while, Brown said. The MEI remained unchanged in September at -0.15, after declining the previous eight months.
The relative Midwest Economy Index fell to –0.29 in September, which was its lowest level since June 2010. Although construction of privately owned homes in Michigan was negatively affected by the past two winters, housing permits and starts have continued to modestly improve since bottoming out in 2009. Nonfarm payroll employment, which is based on a survey of businesses, fell by 9,800 jobs in September following an increase of 3,700 in August. This estimate is down slightly from the Q2 forecast mostly because of slower employment growth in recent months. Although construction did not add to Michigan’s contribution, a value of zero still implies long-run average growth in the sector. Because almost half of Michigan’s manufacturing output is related to the auto industry, the projected (continued) growth in light vehicles sales and production for the foreseeable future suggests that Michigan’s economy should sustain its positive momentum, at least through the rest of this year. While Michigan has seen a significant shift away from its reliance on manufacturing jobs to more service-related employment, the auto industry’s contribution to the state’s economy remains significant. However, during the past 15 years, private service sector employment in Michigan has remained relatively flat, moving up somewhat from 2,879,400 in 2000 to 2,902,850 jobs today.
It could be argued that the increase in the share of low-paying service-related jobs in Michigan has had a slightly negative impact on average annual wage growth in the state. Then, I analyzed the extent to which Pittsburgh’s turnaround can serve as a model for Detroit as its city leaders and stakeholders look to revitalize the city’s urban core.

The summit will look at new research and best practices in the field of urban revitalization.
The tour will highlight some of Detroit’s successes and challenges in its effort to revitalize its urban core and how the three levers of growth—business environment, clusters, and individual firms—are promoting and complementing the efforts of Eastern Market and Midtown Detroit.
ICIC Founder and Chairman Michael Porter will look back on his research of clusters and their competitive advantages in inner cities. Before World War II, Pittsburgh was well known for the black clouds of soot that often hovered over its downtown area. This summit gave me not only a chance to experience Pittsburgh for myself, but also an opportunity to hear from some of the people whose efforts have steered the city in a positive direction. While both cities’ population densities are similar, the size of Detroit’s land mass stands out: Detroit is more than twice the size of Pittsburgh. A higher percentage of Pittsburgh’s population has a bachelor’s degree, participate in the labor force and possess health insurance. So even if the city of Detroit were to continue to lose population, positive income gains in the future are attainable as seen in Pittsburgh.
According to Rob Stephany, director of community and economic development, The Heinz Endowments, East Liberty was Pennsylvania’s third busiest commercial corridor until World War II (only behind the downtowns of Philadelphia and Pittsburgh). The quick buses have contributed to East Liberty’s renaissance by providing residents fairly easy access to their respective places of employment while improving the neighborhood’s connections with the rest of the city. Leaders and stakeholders in East Liberty have learned those lessons, as evidenced by their increasingly providing opportunities for lifelong residents to stay in the neighborhood, thanks to more mixed-income, affordable housing projects. For example, the Detroit Riverwalk Conservancy was formed in 2003 to help make the Detroit Riverfront more visitor-friendly. I associate listening in a Detroit context with regional collaboration—which Detroit and its neighbors have improved upon in recent years.
Most of the obstacles will require greater collaboration among community developers, city leaders, and regional stakeholders so that as many Detroiters as possible can experience the city’s rebound. TIF is intended to generate economic (re)development activity that would not otherwise occur. According to Thiel, a senior research associate with the Citizens Research Council of Michigan (CRC), it took decades of declining student enrollments and five state-appointed emergency managers since 2009, each unable to solve DPS’s financial problems, for the City’s school system to fall into a state of financial crisis. The problem with this model is that as enrollment declines, revenues fall almost immediately while expenses fall very slowly.
As enrollment declines, there is less per-student funding available to cover the required debt and legacy payments. One part would be responsible for the debt, and the other would be responsible for educating the students. The CBP data series provide the number of business establishments (4) by county and zip code.
Approximately one-eighth of these establishments can be found in Downtown Detroit—which saw a similar share of its businesses depart as the city as a whole did over the sample period. Wayne County (including Detroit) and the Detroit metropolitan statistical area (MSA)—encompassing Macomb, Oakland, and Wayne counties—experienced less severe business losses than the city of Detroit. The most significant sectorial losses of businesses were from the goods-based side of the economy—most notably, from manufacturing. As we receive more and newer data, it will be interesting to see whether new business establishments are sprouting up elsewhere in Detroit.
Falling gasoline prices together with affordable finance rates helped the Detroit Three (D3) manufacturers (Fiat Chrysler, Ford, and General Motors) by making crossover vehicles, SUVs, and pickup trucks more affordable to own and operate. At the same time, older workers who were already making tier 1 wages wanted to see larger pay increases and were willing to sacrifice jobs to get them.
However, real business fixed investment grew at a significantly slower rate than predicted. Auto loan debt is expected to surpass student loan debt as the highest form of household debt, excluding mortgage and home equity debt, over the coming years.
For instance, the pace of growth in residential construction is expected to accelerate, while year-over-year growth in nonresidential construction is anticipated to level off. Equipment demand for single-family residential and transportation projects is expected to increase in 2016.
Even with Detroit’s bankruptcy and other cities’ and states’ latest financial struggles, municipal bond quality generally remains higher than corporate bond quality.
In addition, at +0.04, Michigan’s contribution to the MEI in September fell to its lowest level since October 2014. Light vehicle sales for September 2015 were reported to be 18.1 million units at a seasonally adjusted annual rate (SAAR).
Housing starts in the state through August averaged 1,454 per month in 2015—a 16.5% improvement compared to the same period last year. While September’s unemployment rate reflects an increase in civilian employment of 54,583 for January through September of this year, it was also aided by a declining labor force (down by 16,172 participants) over the same period. So far in 2015 (through September), nonfarm employment has increased by 53,900, which is equal to an average monthly job growth of about 6,000 per month. However, total nonfarm employment is still on a path to grow by 2.0% in 2015 if the current monthly average pace of employment growth continues.
Varvares is an accomplished macroeconomic forecaster with over 30 years of experience and service as an economist.
The MEI is a weighted average of 129 state and regional indicators for the five states of the Seventh District (Illinois, Indiana, Iowa, Michigan and Wisconsin). Another indication of strength in manufacturing is the Institute for Supply Management (ISM)–Southeast Michigan Purchasing Managers Index, which was reported to be 66.1 for June (helping to keep the 12-month moving average above 50 for the 64th consecutive month). As chart 3 shows, in 2000, manufacturing accounted for 19.2% of all nonfarm employment in Michigan, or the equivalent of 896,900 jobs. The increase in service sector employment share without a significant addition to payroll employment can be explained by the fact that total nonfarm employment in Michigan is down over 400,000 jobs from its peak in April 2000. A sector-weighted calculation of annual average nonfarm payroll using wages by sector for 2013 would suggest that if the state still had the same employment by industry distribution today as it did in 2000 the all-sector annual average wage would be approximately $51,100 today versus $50,100 in 2000, or roughly 2% higher.
While Detroit has begun to replicate the efforts of other cities, such as showcasing the city’s riverfront with the Detroit RiverWalk and collaborating with regional leaders and stakeholders, overall its efforts lag those of other Rust Belt cities. Eastern Market’s food cluster is expanding in part because of greater economic growth within the city of Detroit. Later on, Matthew Cullen, President and CEO, Rock Ventures LLC, will provide insight into how his firm has helped contribute to Detroit’s recent surge in economic development. In this blog entry, I will share my thoughts on my visit to Pittsburgh and some observations on how Pittsburgh is and is not a model Detroit can follow in its revitalization efforts.
When adding up the size of each of Detroit’s vacant land parcels, it amounts to 40 square miles—almost 30% of Detroit’s land area, but almost 75% of Pittsburgh’s!(2) Another major difference between the two cities is their racial composition: Pittsburgh’s population today is predominantly white, whereas Detroit’s shifted from mostly white to mostly African-American. Not surprisingly, per capita incomes are higher and poverty rates lower in Pittsburgh than in Detroit. However, activity decreased after World War II as consumers headed out to suburban shopping centers to do their shopping. When I disembarked from the bus, I couldn’t help but notice the large development project taking place at the transit station. Kendall Pelling, director of land recycling, East Liberty Development, Inc., shared how ELDI is buying up vacant properties, as well as properties home to crime, in order to lower crime rates and make East Liberty an even more attractive place to live. Mayor Peduto argued the most important factors to social mobility are the chance to earn a quality education and the ability to get to work. To the common observer, it may seem that Pittsburgh’s turnaround happened rather quickly and therefore is attainable for Detroit. Impressed by what the Allegheny Conference did in Pittsburgh, the Greater Baltimore Committee began implementing its plan to improve Baltimore’s downtown in the 1950s, which eventually encompassed the city’s Inner Harbor in the 1960s.(9) The planning of Chicago’s Lakefront Trail provides an even starker contrast with the city planning for Detroit.
For example, regional authorities were created for entities such as Cobo Hall (our convention center), and regional leaders came up with the “grand bargain,”(11) which helped lift Detroit out of bankruptcy (and save the Detroit Institute of Arts’ collection).
Just as in Pittsburgh, a strong correlation between neighborhood investment and neighborhood condition exists in Detroit.
In many ways Pittsburgh’s redevelopment can serve as a model for Detroit’s, but in other ways it cannot. It works by establishing a specifically defined district, using incremental growth in revenues over a frozen baseline amount to pay for (re)development costs.
In addition to ballooning deficits, mounting legacy costs, recurring cash shortage problems, and deteriorating facilities, DPS has experienced declining enrollment since the early 1970s, reaching an annual rate of 10.5% between FY2003 and FY2014.
This is because public education is personnel-intensive, with about 60% of a district’s general fund budget going to pay instructors. According to estimates, in FY2016 only 40% of the per-pupil allocation will be available for classroom instruction. Nearby Washtenaw County, whose county seat is Ann Arbor (7), still saw a slight drop in the number of business establishments over the sample period, but fared much better relative to the city of Detroit. When just looking at the raw numbers of business losses among the manufacturing subsectors, I found that fabricated metal product manufacturing experienced the greatest losses: this subsector lost 86 establishments from 1998 through 2013 (almost a 50% contraction). While the most severe manufacturing losses weren’t from direct transportation equipment manufacturing, they were in complementary industries, such as fabricated metal manufacturing, machinery manufacturing, and printing activities. Will business (and public) investment in Detroit remain concentrated in its high-activity areas or begin to noticeably branch out to the city’s relatively less active neighborhoods?
Chart 1 below shows how the demand for more light trucks has helped the D3 stop the erosion of their market share. The 2016 Bob Fish Memorial Automotive Industry Luncheon meeting addressed the following questions: How long will sales continue at their current pace? In the end, the increases in cost from this contract were kept to a minimum, compared with pre-2009 contracts. Also, EOS participants are given the chance to submit their respective projections for the year ahead.
Meanwhile, Mexican light vehicle production capacity is expected to increase by over 2 million units in the next seven years largely because of lower labor costs (thereby reducing the U.S. But heavy machinery demand for nonresidential projects should moderate this year; the prospects for equipment demand to complete such projects look more promising over the next couple of years, as nonresidential fixed investment is expected to move up moderately and equipment usage is near its mid-2000s peak.
Interest rate increases won’t be terrible for issuers of municipal bonds because historically, municipal bond yield increases failed to match the size of federal funds rate increases. Residential investment is projected to rise at a strong pace, with slow and steady improvement predicted in new home construction. Michigan has seen its real per capita income growth exceed that of the nation for the past six consecutive quarters. However, even with that improvement, privately owned housing starts are still only about 40.0% of what they were at their peak in 2005.
Michigan has added 443,000 jobs since its recessionary trough in March 2010, but total nonfarm employment is still about 400,000 jobs below its peak, which was reached in 2000.

Because Michigan’s economy remains highly dependent on the manufacturing sector and because almost half of Michigan’s manufacturing output is related to the auto industry, the projected (continued) growth in Michigan’s auto production for 2015 should help the economy sustain its positive momentum through the rest of this year and into 2016.
However, manufacturing saw the second largest gain in real dollar value, increasing by $2.0 billion in 2014 from 2013.
The index is designed to measure nonfarm business activity by tracking four broad sectors of economic activity: manufacturing, construction and mining, services, and consumer spending. For this index, a value above 50 indicates that those surveyed are anticipating continued growth in manufacturing activity in the coming months.
The relatively sluggish pace of Detroit’s efforts to revitalize its urban core are also reflected in the slow development of the city’s business clusters, including new business formation. Upjohn Institute for Employment Research, the Initiative for a Competitive Inner City (ICIC), the Federal Reserve Bank of Chicago, Economic Development Quarterly, and Sage Publications.
Part of that growth is originating from the development of an innovation district along Detroit’s major boulevard, Woodward Avenue, which is helping to draw young entrepreneurs to work and live in Midtown Detroit. Other featured speakers include Carol O’Cleireacain, Deputy Mayor for Economic Policy, Planning, and Strategy, City of Detroit. Bike Pittsburgh and other civic-minded organizations and stakeholders have been the key to Pittsburgh’s turnaround. The chart below shows how median household incomes have steadied and slightly rebounded in Pittsburgh versus the continued decline in Detroit. To try and revitalize East Liberty, Pittsburgh’s Urban Redevelopment Authority decided to make the neighborhood’s center more walkable by transforming much of its outer surface streets into a one-way ring road where visitors could park and then walk to nearby shops. A similar mix of buildings greeted me when I turned north on Highland Ave., which is also home to the iconic East Liberty Presbyterian Church that dominates the core area’s landscape.
In the Larimer neighborhood, which borders East Liberty’s east side, assisting lifelong residents in their effort to stay was a central piece of their neighborhood development plan. According to Peduto, another avenue for greater social mobility is his policy in granting tax increment financing (TIFs)(7) to developers. Daniel Burnham’s 1909 Plan of Chicago included plans for a continuous lakefront park with a trail that became the Chicago Lakefront Trail, which was resurfaced in 1979. More regional collaboration will be needed for other solutions, especially public transportation, which has the potential to increase labor mobility and help better match employers with employees.
Mayor Duggan has looked to increase neighborhood investment through programs such as the Detroit Blight Task Force and Detroit Land Bank. When the Pittsburgh model doesn’t apply to Detroit, Detroit can look to other cities for ideas. For example, if a school loses 10% of its students across multiple grade levels in a single year, it would lose the per-student funding associated with those students almost immediately.
The district would operate under a Financial Review Commission to review the actions of the elected board and a Detroit Education Commission, which would be responsible for overseeing academic performance. Of the 26 zip codes I analyzed, 17 of them saw greater-than-50-percent declines in the number of manufacturing establishments. Geographically speaking, establishments close to Detroit’s border with the Grosse Pointes and those around the former Packard automobile assembly plant shut down in greater proportions than those in other parts of the city. These projections are subsequently used to come up with a consensus (median) forecast for real gross domestic product (GDP) and related items. The unemployment rate was lower than originally projected, while inflation (as measured by the Consumer Price Index) came in well below the predicted rate.
Growth in business fixed investment should continue at a decent pace, with moderate growth anticipated in industrial output. At +0.02, Michigan’s contribution to the relative MEI remained positive in September almost entirely because of its contribution from manufacturing.
A value of zero for the MEI indicates the Midwest economy is growing at its long-term trend rate of growth, while a positive number indicates above-average expansion and a negative number suggests below-average growth. On the residential investment front, although the 12-month moving averages for housing starts and permits for Michigan remain well below their peak levels that were reached in 2005, both of them continued their slow upward trend in June, rising to 1,439 and 1,343, respectively. One way is to increase labor input—either by having its existing staff work more hours or by adding more employees.
For those interested in attending, there is no registration fee but advance registration is required here.
In addition, the tour will illuminate some of what Detroit must still overcome on the path to renewal.
Sessions on the second day will examine new thinking on the competitiveness of inner cities and opportunities for business in the inner city.
Unfortunately, recent development has made it more difficult for some lifelong residents to remain in the neighborhood. East Liberty was truly diverse in that within blocks, I saw signs of a neighborhood on the rise, including trendy restaurants and boutique hotels, while symbols of struggle—such as run-down apartments, check cashing outlets and discount stores—remained.
It seems safe to say that leaders in Pittsburgh are following their own advice, especially the listening part. Mayor Peduto said his administration only grants TIFs if developers agree to pay their workers prevailing wages. With regard to public policy, Detroit must continue to improve its delivery of police and fire service in order to ensure the safety of its citizens. One of Detroit’s challenges is to better coordinate activity between city government and city neighborhoods as Pittsburgh has done. Arguably, the biggest take-aways from the policy summit were the many different plans and strategies other cities have executed that are available to help cities such as Detroit return to prosperity. However, the school still needs to provide classroom instruction for all of the remaining students, which might require the same number of teachers as before.
Less money for the classroom has resulted in a decline in academic performance, prompting those parents who have the means to do so to seek alternatives for their children’s education, further exacerbating the decline in DPS enrollment. Zip code areas that saw a larger percentage of their businesses leave relative to what the city as a whole experienced contain some of Detroit’s struggling neighborhoods—which include East English Village adjacent to Harper Woods and the Grosse Pointes, as well as areas near and around the old Packard plant in Detroit’s eastern industrial corridor (6). What happens to vehicle affordability now that the Fed has started to raise interest rates? Global steel consumption is expected to increase slightly in 2016 after decreasing last year. The dollar is estimated to slightly appreciate versus major currencies, which should increase the U.S. Even after falling for three consecutive months, Michigan’s year-to-date average monthly contribution to the relative MEI (of +0.19) remained well above that for 2014. While home prices for the state are above their 2000 level, they are still well below their 2005 peak. Sectors that experienced losses in jobs this year include information, mining and logging, and government. Michigan’s contribution to the MEI of 0.19 for June would suggest that Michigan’s economy is performing better than its long-run average. Strength in the service sector was supported by continued growth is service-related jobs, which have averaged annual growth of over 1.4% for the past five years. A second method would be to seek improvements in productivity—through investment in either physical or human capital.
The first day ends with a presentation by Detroit Free Press writer John Gallagher, who will share his thoughts about the city.
Unfortunately, the ring road deterred further commercial development and prompted businesses to close and residents to leave.
Moreover, the Mayor said he sees a lack of investment in a particular neighborhood as sending a negative message to its residents.
Mayor Duggan is in the middle of implementing his neighborhood plan, which included the creation of a Department of Neighborhoods, placing neighborhood managers within each City Council District.(13) Plans to improve social mobility, which in Detroit means reforming Detroit Public Schools have been presented by a task force and Michigan Governor Rick Snyder.
However, Thiel stated that time to act was yesterday and until the structural challenges currently faced by DPS are fixed, enrollment will continue to decline and the problems of the DPS will only get worse. How many businesses have left the Motor City since around the turn of the twenty-first century? Here I will analyze business patterns by geography and industry among Detroit zip codes (and elsewhere) between 1998 and 2013. The slowdown in Chinese steel consumption has been a major factor in the decelerating rate of global steel consumption in the past few years.
Michigan is the only state in the Seventh District that has positively contributed to the relative index throughout 2015. The government subsector that experienced the biggest decline in employment was local government: 4,200 local government jobs were lost in Michigan this year.
In essence, output growth or decline is a function of changes in labor inputs and productivity. The only major development projects along the ring road were large, multifamily apartment towers.
As a way to circumvent that potential problem, Mayor Peduto shared that his office assists in writing each neighborhood’s master development plan. And are new businesses replacing them in the aftermath of the Great Recession (which ended in mid-2009)? The speakers included the chief economist for General Motors, Mustafa Mohatarem and the director of the Industry and Labor Group at the Center for Automotive Research (CAR), Kristin Dziczek.
According to data from Ward’s Automotive, Michigan’s light vehicle production for 2015 is expected to reach slightly over 2.4 million units. The overall economy works in a similar manner, though tracking economic output is somewhat more complicated than this simple analysis for a firm would imply.
However, because of Michigan’s per-student funding model, if a student leaves a traditional public school to go to a charter school, the funding follows the student, while DPS retains all the legacy cost.
Inflation is expected to move up (closer to the FOMC’s inflation target) as oil prices strengthen slightly.
This is because the outputs of different sectors of the economy provide different contributions.
This results in increasing the debt payments per student, resulting in even less money for public school classroom instruction. Nevertheless, the basic premise is the same for an individual firm and the economy as a whole.

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