Detroit was once credited with creating the middle class, but a new study suggests those jobs are harder to come by for residents of the majority-Black city.
A report from the Center for Equity, Engagement, and Research at Detroit Future City, in partnership with Mass Economics, found Detroit’s labor market is becoming more polarized – with more opportunities that pay either very well or poorly, and fewer that afford a middle-class lifestyle. The study also shows Black and Hispanic Detroiters disproportionately work low-wage jobs.
“With declining representation of middle-wage jobs that have traditionally served as a springboard into the middle class, prospects for Detroit’s working families – and thereby the city as a whole – have dimmed,” the report states.
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Detroit Future City defines middle-wage jobs as those that pay more than the area median income ($37,000) and are accessible to workers who don’t have a bachelor’s degree. Many of these jobs are in the medical industry, credit lending and commercial banking and vehicle production.
Detroit’s median income is $32,498, according to the U.S. Census, and more than a third of the city’s residents live in poverty. This lags far behind the statewide average of $59,234 median income and 13% poverty rate.
Detroit Future City found that Detroit’s middle-wage jobs stagnated in the last decade while the top and bottom of the labor market is growing. Middle-wage jobs in the city increased by 3% from 2010 to 2019 as jobs requiring a bachelor’s degree or higher jumped by about 15% and low-wage jobs by 19%, the report notes.
Detroit added 10,000 jobs that require a bachelor’s degree and 8,000 low-wage jobs, as defined by DFC estimates. The city added just 2,000 middle-wage jobs during that time.
“These middle wage jobs have been growing the slowest and so we’ve had a decreasing share of those overall,” said Edward Lynch, senior program manager for equity, engagement and research at DFC. “We think this is particularly important for a place like Detroit because so few have a four-year degree.”
Detroiters who have a bachelor’s degree or higher level of education make up 16% of the city’s 25 years and older population, compared to 30% statewide.
In the winter of 2020, Detroit Mayor Mike Duggan announced plans to raise $50 million over five years to support what he’s coined the “People Plan.” The initiative covered multiple programs for residents who have felt left behind. Among the efforts being funded are help for Detroiters seeking high school diplomas and skilled trades training.
Nicole Sherard-Freeman, the city’s group executive of Jobs, Economy and Detroit At Work, said workforce development programs are a key strategy for connecting residents to good-paying jobs. Job listings shared by the city range from entry-level positions to jobs requiring advanced skills.
“I’m not suggesting that we have solved for middle class growth,” Sherard-Freeman said. “We’re always focused on being sure that the jobs we attract to the city of Detroit and the way that we help Detroiters develop is toward middle-skills jobs or middle-class careers.”
Sherard-Freeman said 2,400 Detroiters called the city asking for information about Detroit At Work scholarship programs after Duggan’s March State of the City address. There are 17,000 active job-seekers in the Detroit At Work system looking for opportunities, she said.
“I don’t see the polarization of opportunity,” Sherard-Freeman said. “What we see is entry-level opportunity … We’d all prefer to see jobs that are at $15 or higher, we all think that’s a good starting point in terms of the lowest wage we should accept or incentivize. But those jobs are often on a career pathway to a better job.”
DFC argues expanding access to high-quality, well-paying jobs for workers without bachelor’s degrees is vital to achieving a thriving and inclusive economy.
Sherard-Freeman pointed to a University of Michigan economic forecast that found job gains in Detroit’s blue-collar industries exceeded its pre-pandemic level. Further growth is expected due to several high-profile development projects, including the Gordie Howe
International Bridge, Stellantis’ Mack Assembly complex, General Motors’ Factory Zero, and Amazon’s new distribution center.
Wages for these blue-collar jobs rose to an average $73,900 in 2020, according to the U-M report, but are expected to drop to $72,100 as more lower-paid employees return to work.
Meanwhile, the UM report shows average wages in jobs that require less education – industries like retail, leisure and hospitality services – shrank by 36% during the pandemic. It could take until 2026 for the job losses to recover, due to permanent business closures.
Average wages in low-education fields rose from $39,500 in 2019 to $43,700 in 2020, according to the UM analysis. Researchers estimate wages in these industries grew by an additional another 4% in 2021, which would put the average wage just under $45,450.
People employed in Detroit’s middle-wage jobs are more likely to be white, according to the report. White residents made up 61% percent of middle-wage job holders while making up 54% of the total workforce. Black Detroiters make up 35% of all job holders but only 28% of middle-wage jobs employ a Black person.
“The strategy to overcome this challenge must be intelligently and intentionally designed to provide more opportunities for African-American Detroiters – who are currently woefully under-represented in middle-wage jobs – across all phases of job training, recruitment, placement, retention, and advancement,” the report states.
Middle-wage job holders in Detroit are also more likely to identify as male than the city’s overall workforce.
The DFC report tracks a downward trend in jobs within industries that were sources of middle-wage jobs since 2010. This didn’t happen in Metro Detroit or across the country.
Metro Detroit suffered far more acutely from job losses during the initial months of the COVID-19 pandemic and recovered more slowly compared to the rest of the country. Unemployment in the Detroit metro area, which includes 4.3 million people in all of Wayne, Oakland, Macomb, St. Clair, Livingston and Lapeer counties, was recorded at 4.6% in March.
“COVID had a fairly substantial impact on a lot of things, but I don’t think we know the full extent of COVID on everything,” Lynch said. “We’re still feeling the effects of that very much right now.”
Opportunities for people without a four-year degree that pay more than a median wage in fields like manufacturing have steadily disappeared since Detroit’s heyday as the industrial capital of America, according to the study. DFC researchers conclude that Detroit has steadily shed middle-wage manufacturing jobs, displacing less-educated workers from good jobs into the low-wage labor market.
“As with many other cities across America’s industrial heartland, the disappearance of middle-wage jobs has devastated Detroit’s workforce,” the report states.