Can Detroit Rebuild Its Middle Class?

Downtown Detroit is brimming with new condos, start-ups, and breweries. But for the city to make a comeback, it needs to repopulate itself with a new middle class.

Henry Ford, 37, US car manufacturer, pose for a photographer in his new T Ford model in front of his car plant in Detroit, in 1900. In building his car company, Ford also created the U.S.'s first widespread middle class, in Detroit.  
National Journal
Tim Alberta
Feb. 28, 2014, 6:20 a.m.

This art­icle is part of a weeklong Amer­ica 360 series on De­troit.

DE­TROIT — Stand at the Wood­ward Av­en­ue over­pass above In­ter­state 75, and you’ll see the two faces of De­troit. On one side is beau­ti­ful Comer­ica Park, a sym­bol of down­town eco­nom­ic re­viv­al, where city res­id­ents and sub­urb­an­ites alike pack in to watch pro­fes­sion­al base­ball in a world-class ven­ue. Then, across the ex­press­way looms an empty 13-story build­ing, with the word “ZOM­BIE­LAND” scrawled across the top.

That lat­ter view pretty much sums up one of De­troit’s biggest prob­lems today: the city’s lack of res­id­ents. It takes people to build a middle class and a func­tion­ing eco­nomy. And while down­town De­troit is boom­ing with new busi­nesses, the de­vel­op­ment hasn’t been enough to lure large num­bers of new homeown­ers to neigh­bor­hoods scattered around the city’s core.

It’s not hard to see why. Crime is rampant. City ser­vices are a dis­aster. De­troit pub­lic schools are among the na­tion’s worst — many sub­urb­an school dis­tricts have been over­whelmed in the past dec­ade by the in­flux of fam­il­ies flee­ing the city’s poor edu­ca­tion sys­tem — and more than half of the chil­dren here live in poverty. “The ma­chine that cre­ated De­troit’s middle class does not ex­ist today,” says Yolan­da Jack, a 43-year-old nat­ive who mod­er­ates com­munity for­ums at the city’s Charles H. Wright Mu­seum of Afric­an-Amer­ic­an His­tory. “Poverty is not a black or white thing. It’s a people thing. It’s a De­troit thing.”

The dis­ap­pear­ance of a ro­bust eco­nom­ic so­ci­ety in De­troit is es­pe­cially tra­gic be­cause it was here that Henry Ford cre­ated what was ar­gu­ably Amer­ica’s first broad middle class. Ex­actly 100 years be­fore De­troit filed the largest mu­ni­cip­al bank­ruptcy in U.S. his­tory, Ford in­tro­duced the $5 work day to ex­ped­ite mass pro­duc­tion of his Mod­el T. Rep­res­ent­at­ives of Ford Mo­tor Co. toured the South and offered un­educated laborers, most of them black, an op­por­tun­ity to re­lo­cate to De­troit and earn pay equal to their white coun­ter­parts. Thou­sands flocked north­ward in the first wave of the Great Mi­gra­tion, and by 1930, De­troit’s pop­u­la­tion had swelled to more than 1.5 mil­lion, triple what it was in 1910.

The city’s pop­u­la­tion is now just 700,000, down from a peak of nearly 2 mil­lion res­id­ents in the mid-20th cen­tury. Re­build­ing De­troit’s middle class, or some semb­lance of it, is crit­ic­al to this city’s eco­nom­ic fu­ture. Ef­forts are un­der­way in sev­er­al areas. The gov­ernor wants to put in place a bold plan to lure im­mig­rants to the re­gion; a net­work of not-for-profits is work­ing to re­tain Michigan’s col­lege grads; and the busi­ness com­munity is try­ing to di­ver­si­fy and shed the ste­reo­type of a man­u­fac­tur­ing-or-bust eco­nomy. De­troiters real­ize there won’t be an­oth­er in­flux of out­siders to save this city. To build a long-term eco­nom­ic base, De­troit, like a low-budget base­ball team, must de­vel­op and re­tain homegrown tal­ent.

*** Just a few blocks away from Comer­ica Park, the home of De­troit’s pro­fes­sion­al base­ball team, sit a col­lec­tion of aban­doned struc­tures, in­clud­ing a 13-story build­ing with “ZOM­BIE­LAND” scrawled across its edi­fice. (Tim Al­berta)

Even with its well-doc­u­mented lim­it­a­tions, De­troit pos­sesses the build­ing blocks for a po­ten­tial eco­nom­ic ex­plo­sion. The city’s bor­der with Ontario, Canada, is the most fre­quently crossed in North Amer­ica, al­low­ing for un­rivaled in­ter­na­tion­al com­mer­cial co­oper­a­tion. The Great Lakes con­tain 20 per­cent of the world’s fresh wa­ter sup­ply. There are three top-tier uni­versit­ies with­in 90 minutes of the city. And Michigan, thanks to the De­troit met­ro­pol­it­an area and the auto in­dustry, boasts Amer­ica’s highest con­cen­tra­tion of en­gin­eers.

What De­troit doesn’t have in abund­ance are edu­cated, young cit­izens. Dav­id Egn­er, pres­id­ent of the Hud­son-Webber Found­a­tion in down­town, says the city has between 12,000 and 15,000 res­id­ents who have com­pleted four years of col­lege and are un­der 35. That fig­ure is an­em­ic com­pared with re­gion­al  com­pet­it­ors like Chica­go and Min­neapol­is, which, in pro­por­tion to their pop­u­la­tions, boast about 130,000 and 80,000, re­spect­ively. This stat­ist­ic is not simply an in­dict­ment of De­troit’s dread­ful pub­lic schools; it speaks to the un­will­ing­ness of sub­urb­an­ites to stick around the city. “It’s a Mid­w­est phe­nomen­on: We’re all leak­ing tal­ent,” Egn­er says. “We’re just bet­ter at it than any­body else.”

Egn­er’s re­search con­firms what south­east Michigan nat­ives learned long ago: De­troit’s biggest bar­ri­er to re­tain­ing tal­ent is repu­ta­tion. It turns out that the brand­ing of De­troit as the Mo­tor City has a down­side, pro­ject­ing the im­age of a place that is primar­ily a man­u­fac­tur­ing hub for blue-col­lar work­ers. City kids barely both­er to get edu­cated, and col­lege-edu­cated sub­urb­an kids are plot­ting their es­capes be­fore gradu­ation, hav­ing learned long ago that De­troit of­fers noth­ing for them.

The Hud­son-Webber Found­a­tion leads a net­work of non­profits work­ing to rem­edy both prob­lems. Mil­lions of dol­lars in grants are work­ing to con­nect job-train­ing pro­grams with in-de­mand in­dus­tries. At the same time, massive in­vest­ment is flow­ing to­ward re­search­ing in­nov­at­ive pro­jects in tech­no­logy and en­ergy that can be pushed to­ward com­mer­cial­iz­a­tion and at­tract a young, di­versely edu­cated work­force to the city.

Thanks to these ef­forts — and one man’s money and de­term­na­tion — De­troit is quietly as­sem­bling a new, small sub­sec­tion of young, middle-class en­tre­pren­eurs and risk-takers. Rock Ven­tures, the um­brella com­pany foun­ded by bil­lion­aire De­troit nat­ive Dan Gil­bert, has moved more than 12,000 work­ers down­town over the past sev­er­al years. This has triggered a dom­ino ef­fect, with large cor­por­a­tions and small start-ups fol­low­ing suit and feed­ing off Gil­bert’s in­vest­ment. Nat­ive Michig­anders, some of whom spent years away from the area, are mov­ing back at an ac­cel­er­ated pace.

Michigan Gov. Rick Snyder is also con­cerned about the chal­lenge of at­tract­ing pro­fes­sion­als to pop­u­late De­troit, and he un­der­stands the scope of the prob­lem bet­ter than most. His vis­ion in­volves set­ting aside 50,000 visas over the next five years for high-skilled im­mig­rants to live and work in De­troit. “Today’s a day about De­troit’s fu­ture,” Snyder said in Janu­ary. “It’s about job cre­ation in De­troit and an out­stand­ing op­por­tun­ity to show the rest of the world how in­nov­at­ive we can be.” Res­id­ents say they would wel­come im­mig­rants. The hope is that im­mig­rants will fill up neigh­bor­hoods, start busi­nesses, di­ver­si­fy the city, and add to its tax base.

But fed­er­al im­mig­ra­tion policies won’t change overnight. Nor will ef­forts to re­tain young Michig­anders be suf­fi­cient to ad­dress De­troit’s un­der­ly­ing is­sues. The city may feel re­newed by its nat­ive sons and daugh­ters re­turn­ing home, but it won’t be re­stored un­til the next gen­er­a­tion views De­troit as a vi­able des­tin­a­tion for a ca­reer and a fam­ily. And for that to hap­pen, they must see a city that is safe, in­nov­at­ive, and burst­ing with jobs that don’t re­quire hard hats.

***

Is there any­thing more un-Amer­ic­an than telling Amer­ic­ans not to both­er try­ing?

Such was the out­cry here after Chrysler, a sub­si­di­ary of Itali­an-owned and Dutch-headquartered Fi­at Chrysler Auto­mo­biles, aired a con­tro­ver­sial Su­per Bowl com­mer­cial. It began with mu­sic le­gend Bob Dylan ask­ing, “Is there any­thing more Amer­ic­an than Amer­ica?” It ended with Dylan doub­ling down on the ste­reo­type that De­troit’s con­tri­bu­tion to so­ci­ety starts and ends with the auto­mobile. “Let Ger­many brew your beer. Let Switzer­land make your watch. Let Asia as­semble your phone,” Dylan says. “We will build your car.”

The prob­lem is, De­troiters don’t just build cars any­more — and cer­tainly not at the ex­pense of oth­er com­mer­cial op­por­tun­it­ies. Chrysler ex­per­i­enced an im­me­di­ate back­lash be­cause its ad ig­nored this evol­u­tion and snubbed new sources of civic pride.

Shinola, the loc­al watch­maker that now em­ploys 200 people, is one of the city’s great suc­cess stor­ies. De­troit’s mi­cro­brew in­dustry has ex­ploded, and pubs here sell dozens of loc­al se­lec­tions. And De­troit’s in­nov­a­tion goes bey­ond watches and beer. The city’s tech in­dustry is boom­ing, thanks to gi­ants like Com­puware, and a small army of start-ups is pi­on­eer­ing new mi­cro-in­dus­tries touch­ing everything from green en­ergy to urb­an ag­ri­cul­ture. Res­id­ents no longer want their city’s repu­ta­tion and eco­nom­ic for­tune to de­pend only on the auto­mobile. Here, in the birth­place of the “Buy Amer­ic­an” move­ment, a more hy­per-loc­al mes­sage is tak­ing hold.

“We pro­pose a dif­fer­ent ap­proach: let #De­troit brew your beer, build your cars, AND build your watch,” Shinola tweeted from its Twit­ter ac­count after Chrysler’s Su­per Bowl ad aired.

This is the new De­troit, a city de­term­ined to build a mod­ern middle class by fos­ter­ing an im­age of di­versity and self-sus­tain­ab­il­ity. The hope is that a city, as­sembled by out­siders, has fi­nally dis­covered a new homegrown for­mula for res­tor­a­tion.

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