Unemployment In Detroit Pushing 50%?

unemploymentNearly one out of two workers in Detroit are unemployed, according to a report by The Detroit News. It's a figure far higher than the government's official figure, which is still close to a staggering 30 percent.

But the newspaper says that rate doesn't take everything into account. For every person who is still looking and collecting unemployment, there are scores of others who have had benefits run out, accepted a part-time position, taken early retirement or a job outside of their regular field.

Here's how the paper arrived at it's assessment:

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.

The report says at least 100,000 in the city have given up the job search all together. Think about that number for a second. There is a small population-within-a-population that has just given up. The job market is so bad in Detroit that this group is betting it's better to just throw in the towel than continue to be silently mocked by their job search.

Also, if you tell the unemployment office you stopped looking for a job more than a year ago you're not counted in the official tally.

Detroit has been the poster child city for how quickly a city can spiral downward in an economic decline. Scores of major car making plants have been shut down, leaving thousands of workers in the dust. Then, you have suppliers shutting down who once made a living producing parts for the factories. Finally, with no employees working nearby, restaurants close up shop because nobody's stopping in for a breakfast, lunch or dinner. Mix all of that in with the stagnant real estate market and it's a recipe for disaster.

Even the city's mayor - Dave Bing - agrees with the more realistic assessment. At the recent White House Job Summit he pegged the city's unemployment rate as "closer to 50 percent." He is urging the government to start sending money Detroit's way so it can be used for city clean-up projects and infrastructure development that will put some people to work.


Next: 11 Tips for Surviving Your Spouse's Unemployment >>

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