detroit - case study

location

most populous city in state of Michigan, nearby the US and Canada border.

why and how automotive industry started

begin in 19th - 20th century, the canal in Detroit opened up new trade options, which kick started the automotive industry. It attracted many migrants, especially African-Americans from the South seeking better job and life opportunities.

what were the main problems

there was increasing competition from abroad (Japan, Europe) and the assembly line was not efficient as different parts were assembled in different areas. The African-American community also faced racism.

what was Detroit like before the economic change?

more than half USA’s manufacturing jobs were located there in the 1950s. In 1966, 1 in for of any jobs were located there. population growth was vital to the Rust Belt’s success, especially due to the Great Migration. This created demand for housing, in the second half of the 1800s grand apartment blocks were built for the wealthiest middle classes of the Rust Belt’s cities.

what economic changes took place?

began to decline in 1950s, by 1980 28% of jobs had been lost due to competition, the rise of globalisation, the global steel crisis of 1973-75, and inadequate management of the changing economy. the decline in industry and automation in the 1970s led to population decline as there was less migration (due to fewer job prospects). this reduced investment in the area which was also caused by growing racial tensions in 1950s to 1960s which erupted into several summers of riots.

economic impacts of economic change

immediate impact was rise in unemployment, like in 1980-83 unemployment in Pittsburgh doubled to more than 60% higher than the national average. All cities in the Rust Belt lost roughly 45% of their populations between 1970 and 2006. This caused a fall in demand for goods and services and eventually caused there to be 380,000 vacant homes. the converting of the Michigan Theatre into a parking garage became a symbol of Detroit’s desperate decline.

social impacts of economic change

the ‘deaths from despair’ which were brought about by drug use, alcoholism, smoking and suicide increased. More people in Ohio died in 2016 from drug overdoses then the Vietnam War or the worst year of the AIDS epidemic. the accidental drug rate has grown by 600% since 2000 in Ohio and is the leading cause of death in under 55 year olds.

the future of the Rust Belt

the region is rebounding, knowledge economy is thriving in some urban areas, reducing levels of unemployment. tech industries are also growing rapidly as in Pittsbrugh there is a robotics institute. there is also a growth in energy industries, as shale is estimated to create many jobs as there may be $500bn of natural gas underneath Ohio. the environment is also improving as federal programmes have cleaned up rivers, air quality has improved and buildings have been sandblasted and former factories have been repurposed. it remains to be seen whether the wealth will spread beyond CBDs and inner cities and it is also unclear how much investment universities can attract. over time it is likely that inequality will grow with education being the dividing line.