Stephen Bronars ignores the noise about Clint Eastwood’s Halftime in America ad and instead, focuses wisely on Stephen Rattner. Rattner claims that Detroit is coming back, pointing to the falling unemployment rate. Bronars shows that that’s not the real story. The key picture:
Employment in Michigan and Detroit has grown at about the same rate as the rest of the U.S. over the past two years. A noticeable difference between Michigan and the rest of the U.S. is that the labor force is shrinking in the Detroit metro area and in Michigan. Whether this is because jobless workers have given up looking for work, older workers have retired, or people have left the state would require further study.
Detroit is healing, but not in a way that is noticeably different than the rest of the country. Steve Rattner wants to give credit to the automaker bailout for the large decline in Detroit’s unemployment rate over the past two years. At the same time, he would not conclude that the bailout caused Detroit’s labor force to shrink faster than elsewhere in the U.S. It is still unclear what precedent the Federal government has set by intervening in the auto industry rather than just letting large corporations file for bankruptcy. It is also unclear, at this point, how many jobs were “saved” in Michigan and Detroit by this policy.