The Centrist is reading where the unofficial unemployment rate for Detroit is close to 50%. Michigone has litterally become a real life version of ‘The Road’ . What will the tragedy of Detroit look like after the stimulus dollars run out?
Via Detnews.com
December 16, 2009
Despite an official unemployment rate of 27 percent, the real jobs problem in Detroit may be affecting half of the working-age population, thousands of whom either can’t find a job or are working fewer hours than they want.
Using a broader definition of unemployment, as much as 45 percent of the labor force has been affected by the downturn.
And that doesn’t include those who gave up the job search more than a year ago, a number that could exceed 100,000 potential workers alone.
It’s a big number, and we should be concerned about it whether it’s one in two or something less than that," said George Fulton, a University of Michigan economist who helps craft economic forecasts for the state.
Mayor Dave Bing recently raised eyebrows when he said what many already suspected: that the city’s official unemployment rate was as believable as Santa Claus. In Washington for a jobs forum earlier this month, he estimated it was "closer to 50 percent."
Although the government doesn’t produce an unemployment number that high, it’s not hard to get close.
Officially, the unemployment rate in Detroit was estimated at 27 percent in October. But that number does not include people working part-time who want full-time work, nor does it include "discouraged" workers, who have stopped looking for work. It also doesn’t include people who have gone back to school rather than search for a job.
The Bureau of Labor Statistics estimated that for the year that ended in September, Michigan’s official unemployment rate was 12.6 percent. Using the broadest definition of unemployment, the state unemployment rate was 20.9 percent, or 66 percent higher than the official rate. Since Detroit’s official rate for October was 27 percent, that broader rate pushes the city’s rate to as high as 44.8 percent.
Detroiter Michael Kapusniak, 61, is familiar with the problem. He lost his job at a Hamtramck bar when it closed earlier this year and the funeral home where he occasionally helps out has seen most of its business move to the suburbs.
"Everybody’s closing up," he said. "I’ve been looking everywhere."
So Kapusniak is left to the fruitless task of filling out applications as his checking account dwindles.
"There’s nothing I can do. The bills are piling up," he said.
Bing returned to the White House on Tuesday to attend a holiday reception.
"Jobs are the key to revitalizing Detroit," Bing said in a statement released to The Detroit News. "The statistics tell part of the story, but we can’t run from the reality that the need for jobs and investment is far greater than any statistic could measure."
Wiggle room in formula
The monthly unemployment rates issued by the state count only the more traditional definition of the unemployed: folks who want work but don’t have a job. It doesn’t reveal problems just as serious — those who aren’t working enough or, worse, those who have gotten so discouraged that they have quit looking.
Indeed, the way municipal unemployment rates are measured leaves a lot of wiggle room. Unemployment rates for the state and counties are based on monthly surveys and unemployment claims. But for cities, the estimate is derived by looking at how that community fared in the 2000 U.S. census.
For Detroit, that means its unemployment rate will reflect what percentage of the unemployed it had within Wayne County in 2000. Few would argue that conditions have worsened since then, meaning even the official unemployment rate could underestimate current conditions.
"The qualitative point (Bing) was making is correct," Fulton said. "There is more unemployment out there than is officially recorded, and it’s a very serious situation."
Marc Levine, director of the Center for Economic Development at the University of Wisconsin-Milwaukee who has studied unemployment in the Midwest, said it may be worse if the government counted those who are no longer considered part of the labor force.
If a worker tells a surveyor that he quit looking more than a year ago, he isn’t counted in any measure of unemployment. Early retirees, caused by corporate downsizing, also would affect the count.
Levine said you can get a hint at the depth of the problem by looking at the male jobless rate, which avoids the problem of counting stay-at-home mothers.
For a variety or reasons — access to transportation, job availability and work skills — an estimated 48.5 percent of male Detroiters ages 20 to 64 didn’t have a job in 2008, according to census figures. For Michigan, it’s 26.6 percent; for the United States, 21.7 percent.
In Detroit, many of those are truly unemployed and looking for work, but tens of thousands more are not, Levine said. If they were counted in the unemployment rate, he said it would be far higher — approaching 50 percent.
"I think it’s a dramatic kind of conclusion, but you’re not on soft ground," Levine said.
At the city of Detroit’s one-stop job shop, counselors try to find training programs for prospective workers. Center director Ron Hunt said the most recent downturn has brought in a different clientele. It includes many with college degrees. But as in years past, it also includes those who had low-skill jobs.
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