

Can entrepreneurs revive Motor City? - Erazal
http://www.economist.com/news/united-states/21646755-can-entrepreneurs-revive-motor-city-green-shoots?zid=311&ah=308cac674cccf554ce65cf926868bbc2

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freehunter
I wonder if Dan Gilbert paid for this piece, as I suspect he did for many of
the 'Webward Ave' articles that popped up when he bought a bunch of properties
on that street.

As the opinion of someone who grew up in Michigan and still lives not too far
away, tech can't solve the problem. Tech (and tech money) can revitalize
downtown, but the problem will have to be shipped somewhere else. It's not
just going to go away.

Everyone knows what happened in Detroit and Milwaukee and St Louis and other
blighted cities, but do people actually stop and think about what _really
happened?_ You had a massive amount of low-skilled workers. Millions in these
cities. The low-skill jobs went away, and as they did, the workers had no
where else to turn. The jobs were gone. As the cities accumulated more
homeless and jobless, they got more crime and more tensions. More crime and
more tensions means that the owners and managers and skilled labor that was
around (mostly white) left the city. This meant more low-skill jobs
disappeared, the jobs that were supporting the higher-skilled workers. Grocery
stores, gas stations, etc.

The buildings aren't all abandoned because no one wants to live there. Some of
the buildings are abandoned because no one can afford to have their name
legally associated with living there. People still live there, but they don't
own the building, they just squat in it.

You can't bring in high-skill tech jobs and expect Detroit to be fixed. You
can't expect to hire from the local population because there are so many who
didn't go to college, didn't finish high school, and are only focused on
making ends meet (because so often they can't). You _can_ get a small bump
from shipping in higher-skilled workers, as the supporting infrastructure will
bring some low-skilled jobs. But it's not enough. It won't revitalize Detroit
or Milwaukee or St Louis or a dozen other Rust Belt cities around the country.

It'll be very hard for private industry to fix this without pumping a lot of
money into it without expectation of making that money back. And if I learned
anything in my economics class in college, it's that you can't rely on the
private sector to put money into public goods or things with immaterial gains.
Even if tech "revitalizes" Detroit, it will look more like San Francisco, with
Oakland looming just across the bay. You'll have thousands of skilled workers
driving up the price of things and calling it a success, while ignoring crime
waves and homelessness because it's not happening in _their_ city. They'll
just push the problem to Saginaw or Flint.

~~~
TYPE_FASTER
> Everyone knows what happened in Detroit and Milwaukee and > St Louis and
> other blighted cities, but do people actually > stop and think about what
> really happened?

I don't think it's limited to those areas, that's just where it's just really
obvious because they were hit the hardest. There are so many areas of the
country where manufacturing was a good, steady job.

On a positive note, I work for a startup that's been sitting at two different
tech incubators in the past year, and it's clear to me that advancements in
technology will continue to create jobs.

Many of the jobs in factories weren't low-skilled. I think our perception is
skewed because we have more power in our pockets than a Cray in 1994. The
knowledge worker is the new machinist. Machinists were the skilled workers who
could fix machines. Knowledge workers can write software to keep business
processes running, administer systems and networks to keep them running.

What is the next wave of highly skilled worker going to be? Will the rise in
MOOCs redefine what a highly skilled worker is?

~~~
freehunter
You're right that many of the jobs were skilled labor. But like I mentioned,
when the factories closed down, skilled labor moved out of town. They had the
ability to do that because they had money and their skills were not readily
available in the marketplace. Unskilled labor doesn't have that advantage.

The idea is that blighted cities, no matter where they are, need to fix the
unskilled labor problem before they can truly solve the downward slump.

------
smurph
The Detroit that existed for most of the 20th Century likely can't exist again
in the US unless the whole nation's economy changes. You'll never have a large
population of low (formal) skilled workers making good money because their
experience and a general shortage of reliable labor. The corporation has
figured out for the most part how to move the know-how from the worker's brain
to a corporate training manual, and unskilled labor is no longer scarce
anywhere for long since relocation is a lot easier than it was 50 years ago.
If Detroit is going to turn around, it is going to look like most of the other
American cities. Lots of young creatives move in, followed by trendy bars &
restaurants, followed by young white collar workers who want to live in the
new trendy area. The white collar workers price everyone else out, and the
process starts again in a new neighborhood. The white collar workers could
come from startups, but the area already has plenty of them working for
established businesses like the auto companies. Downtown Detroit at that point
would just be a bigger Royal Oak or Ferndale with some high rises and old
money sprinkled in.

