In Detroit, they aren’t calling it a “recession” they are calling it a “depression.” Warlena McDuell who is 81-years-old and has lived through the Great Depression of the 1930s says, “It’s a depression – not a recession. It will get worse before it gets better.”
WXYZ conducted a telephone poll of 500 people in Detroit. Sixty-five percent believed the country was headed towards a second Great Depression. Nearly all. 99 percent, gave the economy a negative rating. Seventy-six percent said things in the country are headed int he wrong direction. And 81 percent believed that Michigan's economy will be worse off in 2009.
According to the South Florida Times, Detroit’s crime, poverty, unemployment and school dropout rates are among the worst of any major U.S. city. The bus system is widely panned; car and home insurance rates are high. Chain grocery stores are absent, forcing many Detroiters to rely on high-priced corner stores.
Meanwhile the 11th-largest US city is running out of money while the two of the Big 3 are needing loans from the Feds. Detroit isn’t even sure exactly how short of revenue it is, the largest estimate from the mayor’s office puts the deficit at $300 million and climbing on an annual budget of $3.1 billion. Mayor Cockrel ordered all city departments to cut their budgets by 10%.
And then there is the issue with the ex-mayor in jail for a text-messaging sex scandal. Even the football team is in tatters, the Lions are within one loss of an unprecedented 0-16 season.
And then there is a new issue that Detroit has been illegally taking water from Canada for 44 years.
The unemployment rate in Detroit is currently 21%, meaning nearly 1 our of 4 people are unemployed.
Michigan regulators recently approved electricity and natural gas rates for customers of Detroit Edison and Consumers Energy. The $83.6 million in hikes for Detroit Edison included a rate “realignment” for commercial customers designed to cut energy costs for businesses, while apparently raising the cost for residential consumers. Consumers Energy’s hike in natural gas prices totaled $22.4 million.
HOME VALUES PLUMMET AND FORCLOSURE RATES HIGH
The average sale price of a Detroit home so far in 2008 was $18,513, in the first nine months of the year, down from $40,011 in 2007, a drop of 55 percent, according to the Detroit Board of Realtors. According to The Detroit News, home values in Detroit plummeted to an average value of less than $10,000; some foreclosed homes, gutted by scrappers, were placed on the market for $1.00; many other stand vacant or are burned to the ground.
Protestors recently picketed Bank of America, chanting “Bail out the people, not the banks.” According to one protestor, her 30-year, fixed interest rate requires a monthly payment of $1,030. Bank of American then received $25 billion in federal bailout money. Under the terms of the restructured mortgage offered by the bank, her payment would go up $300 monthly and she would have to make a $2,000 payment in ten days. But this would only put off the sale of her home until some time in January.
The chronically homeless community makes up 20% of the 19,000 people in metro Detroit who at any given time have no place to live. According to Amber Arellano, a columnist on Detroit News, “Tent cities are sprouting up like winter grass in public parks here.” “Doctors say they’re seeing suicide and depression skyrocket.”
DEMAND FOR FOOD BANKS SERVICES INCREASE
DeWayne Wells, president of Gleaners Community Food Banks of Southeastern Michigan, said demand is up by 25 percent from a year ago in the region’s food banks. “Many people are first-timers – they have no idea how to navigate the system, how to qualify for food stamps.” In a different report, Gleaners was reporting a 70 percent increase in need for food help this fall compared to fall 2007.
By next year, Gleaners anticipates local emergency food needs will rise as much as 50 percent. “Its going to take much more than just food banks,” Gerry Brisson, Gleaners’ senior vice present said. “The food bank network was designed to be a short-term stop gap. It’s going to take good government to really help families who are really going to need the help in the mid-term.”
Detroit is contemplating the closure of 63 schools by 2013. At two area high schools there is now a lack of heat and lights in the classrooms and a shortage of teachers.
According to the most recent numbers from 2007, 47.8 percent of Detroit children lived below the poverty line of $21,000 for a family of four while the national rate at the time was 18 percent. Detroit’s overall poverty rate was 33.8 percent, the highest of any major city.
CRIME DOWN DUE TO LACK OF ‘VICTIMS’
The FBI’s latest statistics, for 2007, show Detroit with the highest violent crime rate of any major city.
According to Jeriel Heard, chief of jails and courts for Detroit’s Wayne County, he reported that property crime in some Detroit neighborhoods had actually stabilized or declined because targets of opportunity were fewer now that most remaining residents are poor and many of the homes have been abandoned and cannibalized. About 44,000 of the 67,000 homes that have gone into foreclosure since 2005 remain empty.
But yet, Detroit’s closure rate on homicides this year is expected to be 30 percent, half the U.S. average.
JAIL BETTER THAN THE REAL WORLD, SOME CHOOSING TO REOFFEND CHOOSING JAIL OVER HOMELESSNESS
Jeriel Heard, chief of jails and court for Detroit’s Wayne County, said jail conditions may deteriorate because of budget-related pressure to eliminate a quarter of the roughly 800 jail deputy positions. He also confirmed that some offenders, notably those without homes of their own, were now expressing reluctance to leave jail when their sentences were done.
“For the first time, I’m seeing guys make a conscious decision they’ll be better off in a prison than in the community, homeless and hungry,” Joseph William of New Creations Community Outreach said, which assists ex-offenders. “In prison they’ve got three hots and a cot, so they commit a crime to go back in and come out when times are better.”
CHRISTMAS DAY IN DETROIT
The Salvation Army of Detroit expected to feed as many as three thousand homeless and needy people on Christmas Day. A breakfast was provided by the Salvation Army and consisted of eggs, French toast, fresh fruit and a variety of breakfast meats that was served at Detroit’s Masonic Temple. In addition to hot meals, the homeless and needy were also given gifts of winter hats and scarves, and counseling by a social worker if needed. A full turkey dinner was also handed out to thousands of needy individuals and families via the Salvation Army’s Bed and Bread program.
Christmas day was also Mitzvah Day – the day many in the Jewish community do good deeds, or mitzvahs. There were nearly 1,000 Mitzvah Day volunteers at more than 40 metro Detroit locations. At one church, 18 volunteers handed out clothes and served a Christmas meal to nearly 300 people gathered at the church.
NOT ONLY DETROIT, BUT MICHIGAN OVERALL
According to the Battle Creek Enquirer, Michigan is the only state in the union that experienced both a drop in personal income and a rise in the poverty level in 2007. According to a New York Times story in Nov, 08; Michigan is in its fifth year of a recession, leading the nation in unemployment and 130,000 residents have been out of work for so long that they have run out of unemployment benefits.
Michigan’s overall unemployment rate rose again to 9.6 percent in November, the highest monthly rate since March 1992, and the highest monthly state unemployment rate in the country. About 113,000 jobs were eliminated through November. And meanwhile, Michigan has now lost people for a third straight year, the only one of the 50 states to do so. And the state unemployment fund is in the red. The state borrowed about $566 million from the U.S. Department of Labor, which is nearly $100 million more debt than just three weeks ago. Next month, Michigan will begin levying a special “solvency” tax, said The New York Times. This “solvency” tax will charge employers whose workers have cost the unemployment insurance fund more than the companies have paid in an additional $67.50 per employee.
Michigan faces a $1.8 billion deficit. Governor Jennifer Granholm and lawmakers have approved a plan to cut $146 million from the state budget, including the closure of prison facilities in Ionia and Coldwater. The plan reduces state spending on welfare programs by more than $63 million, due largely to fewer cases as a result of tighter eligibility requirements. The state also recently increased its income tax rate from 3.9% to 4.35%. Gov.
Medicaid enrollment was up 70,000 in the last year, according to the health department, for the entire state of Michigan.
Gleaners has secured additional food via the USDA to help reach the target goal of about 9 million donated pounds through Dec. 31 for more than 400 area soup kitchens, shelters, churches and pantries. That figure is a 30 percent jump from 2007, which stems partly from greater need in outlying areas of Macomb and Livingston counties.
Demand for food is high at the Salvation army Eastern Michigan Division’s Farmington Hills corps who at one time only needed to restock its shelves once a month, is now restocking once a week. “Our food is flying off the shelves.” The Salvation Army hoped to have netted $8.5 million from its annual Red Kettle Campaign however, as of the beginning of the week of Christmas, donations were down about $623,000 from the same period last year, but overall demand for services was up 20 percent.
Homeless is up in cities in Michigan and nationwide, by an average of 12 percent, according to a survey by the U.S. Conference of Mayors 0 and the worst could still be to come. The Michigan Coalition Against Homelessness reports there are at least 80,000 homeless people in the state.
About 71 percent of more than 300 nonprofits statewide noted a spike in demand for services this past year. Meanwhile, 63 percent of the Metro Detroit agencies surveyed reported a drop in financial and in-kind support. Many of the states' approximately 43,000 nonprofits are reducing staff, scaling back operations or exploring partnerships to offset a steep decline in funding.
A once thriving auto hometown of Pontiac according to one columnist, resembles war-torn Baghdad. Recently it’s unemployment rate hit the Great Depression-level of 20 percent. GM is its only large-scale employer left. The city is too broke to pay for adequate police staffing. Vigilantes have begun patrolling neighborhoods to counter the community’s rising murder rate. Even the columnist was not immune to this new rage. On a recent evening her husband and brother walked along Pontiac’s Main Street, a truck load of four 30-something men, two armed with gun, drove up and asked if he had seen a man they were looking for.
In Kalamazoo, the average number of children staying at the Gospel Mission on any given night is up 19 percent over last year, with an average of 64 children staying each night. An average of three newborns a month start their lives at the Gospel Mission, after their mothers are discharged from the maternity ward. Additionally in Kalamazoo, the Kalamazoo County Child Abuse and Neglect Prevention Council reported that their agency is getting more and more reports from concerned neighbors and others who are worried about children being left home alone by parents who cannot afford childcare while they work.
In Saginaw County, the Child Abuse and Neglect Council of Saginaw County reportes that overall their agency has seen a 23 percent increase in demand for services over last year.
In Grand Rapids, at the Guiding Light Mission, a steak dinner was served to just over 100 people on Christmas Day.
- “Detroit Replaces New Orleans As Most Beleaguered American City”, South Florida Times, 26DEC08
- “Project Helping Hands combs Detroit daily offering help and hope”, Detroit Free Press, 26DEC08
- “Stats illustrate Detroit’s challenges”, AP, 20DEC08
- “Detroit: America’s largest shrinking metropolis”, 13DEC08
- “Salvation Army Feeds Thousands Christmas Day”, WWJ, 25DEC08
- “Cutbacks threaten public education across U.S.”, WorkersWorld, 22DEC08
- “Members of the Jewish community perform good deeds on Christmas Day”, Detroit Free Press, 26DEC08
- “Michigan electricity, gas rates to rise slightly”, Detroit Free Press, 23DEC08
- “Ontario: Detroit taking Canada water without OK”, Detroit Free Press, 23DEC08
- “Commentary: Southeastern Michigan braces for safety net to break”, Detroit News, 15DEC08
- “Hunting a Killer”, Detroit Free Press, 16DEC08
- “Protestors ask Bank of America to help Metro Detroit residents keep homes”, Detroit News, 10DEC08
- “Poll: Most in Mich. fear new Great Depression”, MLive, 24DEC08
- “Homeless treated to steak and scripture reading at Guiding Light Mission”, MLive, 25DEC08