Detroit is pouring millions into jobs, but what’s the trade-off?

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The City held a Getting Detroit Back to Work recruitment event this month to help fill 75 positions funded by American Rescue Plan Act dollars and 101 City department jobs. (City of Detroit photo)

This month, the City of Detroit will start hiring Detroiters for Skills for Life, the second initiative to launch with funds from the American Rescue Plan Act (ARPA) — a federal stimulus program giving the city $826 million to spend by 2024 to combat economic effects of the COVID-19 pandemic.  

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Though the City is using $400 million to balance the budget, the remainder is going toward some of the city’s most pressing issues, like blight, education, housing and intergenerational poverty. And of that chunk, $75 million is going toward the roll out of the Skills for Life program, a key piece in  Detroit’s comeback story: getting more people into jobs, specifically, higher-paying jobs. 

“In terms of labor force participation, what we’ve seen is that Detroit still has the worst participation rate amongst the 100 largest cities in the U.S. since 2019,” said Ashley Clark, the director of the Center for Equity, Engagement and Research at Detroit Future City. 

The work-training hybrid will employ roughly 1,200 Detroiters, who will spend two days a week in skills-training and education courses, and three days working for the City of Detroit on tasks such as commercial blight removal, alley-way clean-ups, and sidewalk regrading. Participants will be paid anywhere from $12-$15 an hour depending on their education level. When the City surveyed 1,154 residents on how ARPA money should be spent 17% said they wanted to see the Skills for Life program expanded. 


Nicole Sherard-Freeman, Detroit’s Executive Director of Workforce Development, works with both businesses and residents to raise the city’s employment levels. (City of Detroit photo)

“The unique thing you’re getting out of the Detroit program is somebody is going to leave this program with real-work experience,” said Nicole Sherard-Freeman, Group Executive of the city’s Jobs, Economy & Detroit at Work program. “They’re going to be able to point to ‘I used this kind of equipment’ or ‘I cleaned up and activated these alley-ways’ and they can point to real work and be proud and be part of making Detroit beautiful.”

The initiative is a partnership between the Detroit Employment Solutions Corporation (DESC) — the nonprofit that runs the City’s Detroit at Work program — and the City’s General Services Department (GSD).

The program, which has already received $16 million in ARPA funds via a contract with DESC, has been widely touted by public officials for combining job training with job opportunities. 

“People frustrated with City government have had fair game overtime — is the transit system working properly or not, water and sewer stuff, any number of things. This is an area where the City has made huge gains over the last seven or eight years,” said Larry Good, president of the Corporation for a Skilled Workforce. “Is it perfect? No. Is every person wanting a good job getting one? No. But is a lot more being done intentionally and thoughtfully than was being done a few years ago? I think, unquestionably, yes.”

So how does it fit into the City’s larger quest to get more people into the workforce? And how has it changed its approach over the years? 

From struggles with hitting construction quotas, to Stellantis (formerly FCA,) to Amazon, BridgeDetroit dives deep in the City’s struggles and efforts around jobs. 

Do the City’s job-training programs match the job opportunities? 

Though Detroit’s unemployment rate has declined over the past decade — falling to 9% in 2019 pre-pandemic, from nearly 25% during the height of the Great Recession — the City has long struggled with getting people into the workforce, especially in higher-paying jobs. In October 2015, for example, the Mayor’s Workforce Development Board created a goal of bringing 40,000 Detroiters into the workforce (or into higher-paying full-time jobs) over five years. Six years later, according to Sherard-Freeman, there have been just over 26,000 placements. 

The issue, according to Clark, is striking the unique balance of job training and job opportunities. 

“You need people who have the skill-sets to be able to get these jobs,” said Clark. “And you also have the challenge where you need the jobs that meet the skill-sets.” 

Mayor Mike Duggan has celebrated his work bringing new jobs to the city. During his re-election campaign, billboards across the city had the simple message: “4,100 New Jobs” a seeming nod to the 2019 Stellantis deal, which promised 5,000 new jobs in the city. Amazon’s forthcoming fulfillment center will offer 2,000 new jobs at its peak. And this summer, Lear Corp. announced plans for a manufacturing plant that will mean “hundreds” of new jobs.

But there is still the challenge of getting people prepared for these jobs, as well as making sure training overlaps opportunities. 

An internal January 2019 Performance Scorecard, included in a recent audit of the DESC, offers a snapshot of the program’s efficacy. It found that of the 2,510 Detroiters who started in 36 different job-training courses between July 2017 and December 2018, 1,304 (or 52%) ended up with jobs in their area of training within 90 days of the course’s completion. 

The performance card came from a spring 2021 audit of DESC by the Office of the Auditor General. Though the report aimed to understand how DESC was using compliance fees that developers had to pay if their project didn’t employ enough Detroiters, it ultimately highlights the challenges of predicting an ever-changing job market. More specifically, it highlights shortcomings of the City’s much praised “51%” executive order that was meant to penalize publicly funded construction projects that didn’t hire enough Detroiters, but then put the training on the back-end after the project was completed. 

The construction training conundrum 

In 2014, in an attempt to solve some of the equity problems around jobs and encourage the hiring of the city’s under-employed citizens, the City of Detroit passed an ordinance requiring publicly funded construction projects to have a crew of at least 51% Detroiters work at least 51% of the hours on the project. Those who failed to meet this requirement would pay a penalty known as a compliance fee, which eventually would go into a Workforce Training Fund managed by DESC, which was meant to use the funds to train Detroiters in these skills so developers in the future couldn’t say there was a lack of skilled Detroiters to meet the 51% rule. 

The May 2021 OAG report, however, found that between 2016 and 2019, $5.5 million in compliance fees were paid to the fund. Yet, despite the requirement that these funds would go toward construction training, the report found that only 17.4% of the funds went toward training in programs specifically related to construction. 

While the May 2021 report found that the nonprofit misused funds earmarked for construction training, DESC maintained that the funds followed the market. 

“DESC stated and believes the funding sourced from Workforce Training Fund Agreement is ‘flexible funding’ that gives them flexibility throughout the year to use as needed,” the report stated. “According to DESC, the ‘funding doesn’t have an expiration date,’ and as funding changes and invoice amounts change, they have needed flexibility to ‘blend and braid’ and ‘mix and match’ funding from various sources.” 

Going forward, according to Sherard-Freeman, Work Training Funds will go toward construction and construction-related jobs. But this, she said, is because of the market, not the report. 

“What I focus on is getting Detroiters ready and setting up a relationship with employers where they want to use Detroit at Work as their priority staffing firm,” she said. 

Detroit develops new approach to creating jobs 

Detroit has since revised its approach to getting residents to work. In the Stellantis deal, the City created a plan where Detroiters would be hired first, allowing Detroit at Work to train workers for future openings. 

In exchange for land — much of it the City got through land swaps with several speculators — Fiat Chrysler, now Stellantis, promised nearly 5,000 new jobs: 3,850 to the Mack plant and 1,100 to the Jefferson plant. Though the automaker acknowledged it would need to hire UAW workers first, its second priority would be Detroiters. 

Press in the proceeding years highlighted the fact that Detroit At Work was getting residents ready. The city held 1,100 job-readiness events in relation to the FCA jobs, and, in spring 2020, more than 16,000 Detroiters were screened for opportunities, 10,300 completed applications and 5,500 were invited for interviews. 

So, how many ultimately got the 5,000 promised Detroit-based jobs?

As of last month, hiring had not begun for the Jefferson plant, but at the Mack plant 2,100 Detroiters, 54% of the workforce,  have been hired, according to Jodi Tinson, Stellantis’ media director.

Tinson says the company has ultimately hired 5,700 Detroiters, with 3,600 supporting production at the Warren Truck and Sterling Heights Assembly, as well as area stamping plants and engine plants. 

But the answer has not sat well with all, especially after an October 2020 press conference where Mayor Mike Duggan stated that 4,100 Detroiters would be hired. While this included those who were offered jobs outside the city, it was reported by local media as if it was all for the new Detroit plant, wrongly implying that 80% of the new FCA jobs had gone to Detroiters. 

In December 2020, U.S. Rep. Rashida Tlaib, D-Detroit, called for the City to “fully investigate” the situation. 

“Some of these jobs are more transfers from other plants, not new jobs, and that’s my statement unless somebody can prove me otherwise,” said Tlaib. “I am just saying that we have got to stop saying these are new jobs when many of them are transfers from other facilities.” 

Jobs trade-offs come at great cost to Detroit 

Last month, Stellantis was hit with multiple air-quality violations at the east side plant, news that highlights the difficult balancing act that the City faces when tasked with bringing in new jobs but also addressing other important quality-of-life issues. 

Though funds for housing and job training may get lumped together as a fight against “intergenerational poverty” with the ARPA funding, on a day-to-day basis, these topics are often in competition. 

When the Stellantis deal was struck in 2019, it involved the City giving new parcels to known speculators like property owner Michael Kelly, who less than a year later was sued by the City for putting Detroiters in dangerous living conditions. The negotiations — new land in exchange for properties Stellantis wanted for its new plant — was deemed necessary for jobs. 

“Even though we wound up in a compromised position relative to Mr. Kelly, it’s a good deal all day long,” top city attorney Lawrence Garcia told WXYZ when questioned about the situation.

This trade-off — jobs at the expense of some other form of dignity — has come up once again when, in 2020, it was announced that a new Amazon warehouse would be built at the State Fairgrounds ultimately bringing 2,000 new jobs to the city, with wages starting at $18 an hour. 

“We’re thrilled that Amazon selected Detroit for what will be one of the largest fulfillment centers in Michigan,” Mayor Mike Duggan said in a statement. “Amazon has been a great partner, and its most important delivery will be the 3,000 construction jobs, 1,200 permanent jobs and new small-business opportunities this new facility will bring to our city.”

The news, however, comes at a time when the organization is under increased public scrutiny for inhumane work conditions, which include speed quotas for those working in the warehouse that have forced many to skip bathroom breaks and other safety measures. 

It also provides something of a conundrum for City policymakers and think tanks, who have made good-paying jobs such an important part of their agenda. 

“One of the things that we really emphasize, it’s not just about any job, you want to make sure we’re looking at jobs that pay at least a median wage, if not higher,” Clark of DFC said, explaining that DFC considers “good jobs” to be $18 an hour or more. “It’s not just about, ‘Yeah, we created 5,000 jobs,’ right? It’s well, ‘Do those jobs pay a liveable wage? Do those jobs provide health insurance?’” 

She declined to comment on how Amazon falls into this equation. 

Nor did Sherard-Freeman, when asked whether the City had a responsibility beyond just bringing in jobs, but also making sure they were good and safe jobs. 

“The Amazon jobs aren’t here yet, and so I am not in a position, I don’t know if anyone is in a position, to comment on a workplace that isn’t operational yet,” she said, adding that quality of jobs was always top of mind for the mayor and that she was under the impression Amazon is aware of its critiques. 

“What I would say is, I’m reading in the news that Amazon is paying a lot of attention to that and we’ll see how that plays out,” Sherard-Freeman said. 

Those working in the sector, however, maintain the City is working hard and making steady improvements when it comes to the labor market.

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