So much is wrong in Stephen Richter’s NYT op-ed today, called “What Really Ails Detroit,” starting with his grossly inaccurate timeline. Richter says Detroit’s (and the United States’) “day of reckoning” came in the 1970s when American car manufacturers began facing competition on their home soil for the first time. That’s 20 years after the Big 3 started to abandon Detroit for the suburbs and Detroit began to hemorrhage its white population. As I said in an earlier blog post, “Between 1947 and 1958, the Big Three built twenty-five new plants in the Detroit metropolitan area, all of them in suburban communities, most more than fifteen miles from the center city. As the jobs moved away, so did the city’s residents. From 1.85 million in 1950, the city’s population declined to 1.62 million in 1960 and 1.51 million in 1970.” That’s a loss of more than 300,000 residents in two decades. The exodus of white residents (the entire decline was accounted for by whites, since the number of black residents increased), of jobs, and of wealth has never stopped. Detroit now has a population under 700,000, but the white population has declined by more than 1.4 million since 1950.
What ails Detroit is not the skills gap that Richter posits, but abandonment by its white population and by the owners of capital, starting with the auto industry, but including retail corporations, insurance companies and almost everyone else who had previously invested in the city. Detroit’s unemployment rate is the highest of any of the 50 largest cities because almost no one is investing there. When corporations do invest, as Chrysler did with its new Jefferson North assembly plant, they will find plenty of employees with the skills to make manufacturing a success again.
Richter’s claim that US manufacturing workers received wage increases that weren’t justified by productivity trends is also dead wrong. In fact, productivity growth in the U.S. economy has far outpaced wage growth for production/non-supervisory workers since the mid-1970s.
Executive pay rose to 250 times production worker wages precisely because production wages stagnated even as productivity continued to increase. The 1 percent has collected the gains of productivity and given working Americans the shaft.
U.S. companies, from the Big 3 to GE and Motorola, adapted to globalization by searching relentlessly for lower wages in the south, in Mexico, and then in China and elsewhere in Asia. The UAW’s collectively bargained joint training centers with Ford and GM are proof that the unions are not to blame—as Richter claims—for any training failures. The corporations had no loyalty to Detroit or to any U.S. manufacturing center, and little interest in investing in local workers’ skills. By contrast, German manufacturers help enforce the obligation of every company to pay 75% of the cost of industry-wide skills and apprentice training.
Blaming the residents of Detroit, who are by-and-large the victims of racism and capital flight, won’t help us find a solution.