Why San Francisco Beat Detroit. Bloomberg compares cities

[Newdetroit]

http://www.bloomberg.com/news/2012-1...mpid=BVrelated

[professorscott]

http://www.bloomberg.com/news/2012-1...mpid=BVrelated

Fascinating article, but one detail bothers me. According to Dr. Glaeser, Detroit's per capita income was about $38,200, and at about the same time its household income was $35,700. That means the average household in Detroit has 0.93 residents.

Kinda hard to fathom. Unless I'm misreading this.

[poobert]

Fascinating article, but one detail bothers me. According to Dr. Glaeser, Detroit's per capita income was about $38,200, and at about the same time its household income was $35,700. That means the average household in Detroit has 0.93 residents.

Kinda hard to fathom. Unless I'm misreading this.

I think he switches between "greater Detroit"[[more commonly, Metro Detroit) and Detroit. Regardless, the statistics are pretty astounding. 23% of Metro Detroit adults have a Bachelor's Degree? Pathetic and shameful.

[Det_ard]

I think he switches between "greater Detroit"[[more commonly, Metro Detroit) and Detroit. Regardless, the statistics are pretty astounding. 23% of Metro Detroit adults have a Bachelor's Degree? Pathetic and shameful.

% of adults with Bachelor's degree

1950 Detroit 5% SF 9%
1970 Detroit 9% SF 18%
2000 Detroit 23% SF 44%

As Glaeser states, the high factory wages supressed the need/desire for higher education. An unintended consequence of the UAW's incredible success in gaining upper-middle class compensation levels for manual labor. Today's situation is the payback.

Another result of the distorted market for educated and uneducated labor in Detroit:

In 2011, 37 percent of Detroit residents older than 16 were employed, as opposed to 63 percent of San Francisco’s adults.

Today many of those who've been raised in a region where higher education was neither needed nor valued find themselves struggling to contribute in an economy that values knowledge the most.

[iheartthed]

% of adults with Bachelor's degree

1950 Detroit 5% SF 9%
1970 Detroit 9% SF 18%
2000 Detroit 23% SF 44%

As Glaeser states, the high factory wages supressed the need/desire for higher education. An unintended consequence of the UAW's incredible success in gaining upper-middle class compensation levels for manual labor. Today's situation is the payback.

Another result of the distorted market for educated and uneducated labor in Detroit:

Today many of those who've been raised in a region where higher education was neither needed nor valued find themselves struggling to contribute in an economy that values knowledge the most.

A major difference between SF and Detroit is the ratio of natives to migrants. SF never stopped being a migrant magnet, unlike Detroit. And SF parents didn't wake up and decide suddenly to send all their kids to college in 1970 to boost those education stats. When the national economy began to favor knowledge industries, that region was able to attract educated people. A big part of that might be having Berkeley and Stanford in their backyard, but Detroit has the University of Michigan in its own backyard too, so that's not completely it...

[Shollin]

Ah yes if you don't have that degree you're pathetic and shameful. I didn't get a degree and didn't accrue thousands in debt. I developed my skill by working entry level jobs, learning from proffesionals in the indursty, and working my way up.

[Det_ard]

Don't take it personally Shollin, no one's judging you as a person. The simple fact is that today the financial returns to knowledge work are higher than ever, and the supply of good jobs that require little education keeps shrinking.

Our region was blessed/cursed for decades with an abundance of jobs that required a strong back and the ability to zone out for 8-10 hours a day while doing monotonous work. That's over. People can still be successful without a formal higher education, but it's more difficult than before, and the disparity in pay and security between high-knowledge and low-knowledge jobs is greater than ever.

[Shollin]

Don't take it personally Shollin, no one's judging you as a person. The simple fact is that today the financial returns to knowledge work are higher than ever, and the supply of good jobs that require little education keeps shrinking.

Our region was blessed/cursed for decades with an abundance of jobs that required a strong back and the ability to zone out for 8-10 hours a day while doing monotonous work. That's over. People can still be successful without a formal higher education, but it's more difficult than before, and the disparity in pay and security between high-knowledge and low-knowledge jobs is greater than ever.

Yet unemployment rates among college grads is increasing with students incurring thousands of debt and not being able to pay it off. The mad dash to get degrees now has spawned for profit diploma mills like University of Phoenix. Aquiring a skill doesn't require a bachelors degree. Auto mechanics make good money and don't need degrees. It's skilled work but they don't wear ties and don't call themseleves professionals, even though they are.

[Jason]

Yet unemployment rates among college grads is increasing with students incurring thousands of debt and not being able to pay it off. The mad dash to get degrees now has spawned for profit diploma mills like University of Phoenix. Aquiring a skill doesn't require a bachelors degree. Auto mechanics make good money and don't need degrees. It's skilled work but they don't wear ties and don't call themseleves professionals, even though they are.

But all the numbers are far worse for non-college grads.

[Shollin]

But all the numbers are far worse for non-college grads.

Sure but a skill doesn't mean a degree. With the college kick everyone is on, the market is going to be flooded with college grads. Plus the degree programs seem like fraud. I know someone who majored in music and yet cannot find a job. Who majors in music?

[professorscott]

My congratulations to Shollin for the life he [[she?) has been able to build for himself. But the fact is, the Detroit region was once able to keep a couple of million of such people gainfully employed, and it no longer can.

Shollin is also correct that there are a lot of worthless college degrees out there. But numbers don't ordinarily lie, and it's a fact that region by region, more higher education correlates with more economic achievement.

Every region needs welders and carpenters and people who know how to fix cars; and these can all be good paying jobs, and they do not require a college education. But no region needs millions of such people in the post-factory era. That is why education, on a large scale, is so important.

[poobert]

But all the numbers are far worse for non-college grads.

Yes. And auto mechanic or any trade for that matter is indeed a skill to rival that of a secondary education. However many of the jobs that were lost around these parts weren't really skilled at all.

What is a shame is that, perhaps I am wrong, but the writing was really on the wall for decades. The boom/bust cycle of the auto industry, the competition from Japan, the near death of Chrysler in the early 80's should have been the signal to the region to about face and change course. Diversify the economy and get the population educated.

Instead we as a region clung to - and still cling to - this idea that the auto industry and manufacturing is our bread and butter. It has been disasterous. What I do think is also problematic is that education is viewed almost entirely as a means to an end. I was lucky that I had a family that instilled in me the belief that education in and of itself is valuable and makes you a better person, rather than just might help you get a better job. I also think our region would simply be a better place is we thought that way.

Degrees don't have to be expensive either, if you're saavy about it. I went to Wayne State, a great, working-class school and have very little debt, which will be gone soon. As a result I was able to get a good job and a great education. Hell, if I did the first two years at community college I'd probably have no debt. Think education is expensive? Try ignorance.

[Islandman]

Yes. And auto mechanic or any trade for that matter is indeed a skill to rival that of a secondary education. However many of the jobs that were lost around these parts weren't really skilled at all.

What is a shame is that, perhaps I am wrong, but the writing was really on the wall for decades. The boom/bust cycle of the auto industry, the competition from Japan, the near death of Chrysler in the early 80's should have been the signal to the region to about face and change course. Diversify the economy and get the population educated.

Instead we as a region clung to - and still cling to - this idea that the auto industry and manufacturing is our bread and butter. It has been disasterous. What I do think is also problematic is that education is viewed almost entirely as a means to an end. I was lucky that I had a family that instilled in me the belief that education in and of itself is valuable and makes you a better person, rather than just might help you get a better job. I also think our region would simply be a better place is we thought that way.

Degrees don't have to be expensive either, if you're saavy about it. I went to Wayne State, a great, working-class school and have very little debt, which will be gone soon. As a result I was able to get a good job and a great education. Hell, if I did the first two years at community college I'd probably have no debt. Think education is expensive? Try ignorance.

Great post.

[maverick1]

Yes. And auto mechanic or any trade for that matter is indeed a skill to rival that of a secondary education. However many of the jobs that were lost around these parts weren't really skilled at all.

What is a shame is that, perhaps I am wrong, but the writing was really on the wall for decades. The boom/bust cycle of the auto industry, the competition from Japan, the near death of Chrysler in the early 80's should have been the signal to the region to about face and change course. Diversify the economy and get the population educated.

Instead we as a region clung to - and still cling to - this idea that the auto industry and manufacturing is our bread and butter. It has been disasterous. What I do think is also problematic is that education is viewed almost entirely as a means to an end. I was lucky that I had a family that instilled in me the belief that education in and of itself is valuable and makes you a better person, rather than just might help you get a better job. I also think our region would simply be a better place is we thought that way.

Degrees don't have to be expensive either, if you're saavy about it. I went to Wayne State, a great, working-class school and have very little debt, which will be gone soon. As a result I was able to get a good job and a great education. Hell, if I did the first two years at community college I'd probably have no debt. Think education is expensive? Try ignorance.

As a white collar worker in manufacturing I don't understand why Detroit has to abandon manufacturing instead of building off of it and securing it. You'll never hear Germany abandoning manufacturing. And segments of manufacturing we led and then abandoned because it was "old and useless" are now making money for South Korea, China, and Germany. The skills, knowledge, and technology involved in "making things" should never be thrown away. Of course manufacturing will not employ the same amount of people it did 10-20 years ago. But to discard 100 years of manufacturing knowledge makes no sense to me. Other countries would kill for the knowledge and skills we have in manufacturing. I don't get why Detroit can't hold on and strengthen its position in manufacturing and bring in new industries. For example why can't Detroit keep its status as the heart of US manufacturing in addition to expanding into finance, biotech, entertainment, logistics, etc. People act as if the creative class works in the abstract and doesn't use tools [[by tools I mean any instruments required to properly do your job i.e. software, computers, scanners, etc.) Someone has to make the tools the creative people use to be effective.

[Cincinnati_Kid]

Good post, Det_ard. That's it in a nutshell.

[Jason]

Unemployment is twice as high for non graduates as it is for graduates. http://www.bls.gov/news.release/empsit.t04.htm

And it's absolutely true that not all college programs are valuable. It's cheaper to buy a paper shredder to send along with every application than it is to get a [[completely worthless) degree at a degree mill like the University of Phoenix. The prey on students from families without college experience who don't know better, and get them to take out huge loans. And it's also true that even respected institutions don't regulate how many students can enter their programs based on the actual job market. But even the students with music degrees will be better off than someone who didn't go to college at all.

And even the skilled trades expect various certifications.

[Shollin]

I'm not sure why people are fascinated with comparing Detroit to cities like San Francisco who where never really comparable. Just about every large city was experiencing difficulties in the 70's. Compare Detroit to Chicago. Chicago has lost a million people, has faced high crime and a decrease in manufacturing, and has yet still remained viable. Sure Chicago has more educated people, but I doubt Chicago ranks as high as places as San Francisco. One of the problems is Detroit doesn't have many schools. Wayne State is a fine school, but does it attract outsiders? Chicago has University of Chicago which is globally recognized, and Northwestern just outside it's borders, plus schools on the level of Wayne State such as DePaul.

[Umbound]

As a student [[senior at UofM). I can tell you firsthand how many people from the Detroit area [[like myself) hear often about 'Staying or moving'. What it comes down to would be job availability & urban environment. I often take friend of mine from NY, California etc. to Detroit often. The usual question/s I get is "Your city only has 3 Universities/Colleges?" [[WSU, UDM, CCS). A friend from Chicago told me the city alone has more then 3. I read this article before seeing the post here on DYes. If we had more educational institutions right in the city; and not University of Profit I mean Phoenix. The city and metro would be better off with the knowledge industry type of jobs. My family owns liquor stores in the city and during summers I get asked by my customers, whom a majority work in the auto industry, if I plan on staying. My reply has been if the Detroit area had more the just auto's I am willing to stay.

[iheartthed]

But vast factories, such as Ford’s River Rouge, are kingdoms unto themselves. They don’t need the cities that surround them, and when economic conditions change, factories are relocatedto lower-cost areas, such as the right-to-work states of the South and the developing world.

This is the true difference between Detroit and San Francisco. San Francisco is a city that can recreate itself and Detroit has spent the past half century struggling to hold onto an industry that doesn't need it anymore.

[ghettopalmetto]

[/FONT][/COLOR]This is the true difference between Detroit and San Francisco. San Francisco is a city that can recreate itself and Detroit has spent the past half century struggling to hold onto an industry that doesn't need it anymore.

Not just struggling to hold onto an industry, but an entire paradigm that is on its deathbed.

This thread is looking at both Detroit and San Francisco as if they are closed systems, existing in complete isolation of any outside factors [[for example, the comments on proximate universities). Does San Francisco have higher economic attainment because it has more college graduates? Or does it have more college graduates because it has higher economic potential?

Detroit has resisted change for decades, trying to STILL--even today--conduct business as if it were still the 1950s. The writing is on the wall...younger generations drive less and aren't as interested in owning a car. Never mind that birth rates are much lower than the 1950s and 1960s. Ergo, the domestic customer base is shrinking, and global petroleum supplies are shrinking too. There will always be a need for an automobile industry, as well as other blue collar trades. But how long can Detroit ignore the 800-lb gorilla in the room?

Detroit can't keep pretending that every last person wants a detached home on half an acre 10 miles from work with three cars in the garage. If it doesn't adapt, it will die on the vine. It's time to resurrect the spirit of Henry Ford and start getting entrepreneurial, and start putting forth IDEAS that will perpetuate, instead of clinging to a nostalgic vision of the past that has already come and gone.

[Shollin]

I've been thinking, why didn't they do this little comparison when Detroit was playing Oakland, the Bay Area's dirty little secret?

[iheartthed]

I've been thinking, why didn't they do this little comparison when Detroit was playing Oakland, the Bay Area's dirty little secret?

What would've been different? Oakland and SF are the same metro... And Oakland's income stats are still far better than Detroit's.

[D_Town]

Ummmmm because SF Giants were a better team??
I'm not understanding the purpose of this article, its like comparing apples to oranges.

[iheartthed]

Ummmmm because SF Giants were a better team??
I'm not understanding the purpose of this article, its like comparing apples to oranges.

Ed Glaesar, the author, is a Harvard economist that studies urban economics.

[Shollin]

What's funny is the economic center around San Francisco is silicon valley with places like Apple and Google, is located in the suburbs in giant office parks accessible by freeways. People got this idea of Detroit that it's Sim City and if you build this nifty urban area with public transit people will come.