U of M Economic Forecast shows Detroit’s economy on a steady growth pattern
- Local economy will continue to see steady growth
- Forecast marked by job growth and wage increases for Detroit residents
- Unemployment to stay low as City continues efforts to attract good-paying jobs, extending opportunity to more Detroiters
Detroit’s economy will continue to see steady growth, with increasing jobs and wages, according to the Detroit Economic Outlook for 2022-2028 released today by the University of Michigan.
“. . . on balance we expect Detroit’s recovery to continue over the next several years. Our forecast takes Detroit’s unemployment rate below 6 percent on a sustained basis, while wages rise for city residents and those who work there. We believe that qualifies as an encouraging outlook for Detroit’s economy in the years to come,” said Gabriel Ehrlich, director of U-M’s Research Seminar in Quantitative Economics and lead author of the forecast.
Detroit sees continued job gains, higher wages
Overall, projections show the City gaining more jobs and Detroiters receiving higher wages over the forecast. Expect to see “ongoing gains over the next five years both for jobs located within the city boundaries and for employment among Detroit residents.” Nearly 5,000 jobs will be added in the City this year with 4,300 expected in 2024 then an average of 1,900 per year through 2028. Among residents, employment follows a similar pattern growing by an average of 3,600 this year and next before moderating to 1,700 per year from 2025 through 2028.
Detroit residents are also seeing bigger paychecks. Looking back, Detroit’s improving labor market over the past several years has led to a 47 percent rise in average annual wages of Detroit residents from $26,600 to nearly $39,200 between 2014 and 2021. Looking ahead, average household wages are projected to reach $50,300 by 2028.
City’s strategy attracts good-paying jobs, extend opportunity to more Detroiters
The steady growth stems from Detroit’s ongoing success in attracting good paying jobs for residents. In July Amazon cut the ribbon on its new packaging facility with 1,279 workers, 60 percent of them Detroit residents. And GM is expected to turn the former AMC headquarters into a warehouse for electric vehicle parts creating 350 new jobs in 2024. Additionally, Lear’s new seating facility on the site of the former Cadillac Stamping Plant is still on track to reach full employment of at least 400 this year.
Part of the City’s economic strategy is to create programs that help Detroiters compete for higher paying jobs. With programs like Jump Start, a major first-of-its-kind $100 million Scholarship program, long-term unemployed residents can reengage in the job market through paid education and career/job training programs. The program is expected to get 1,200 Detroiters back in the workforce with plans to reach more.
As of today, August 31, 2023, there are 7,010 jobs available in Detroit.
“The steady growth projected in Detroit’s economy is good news as the forecast expects to see more job gains and wage increases. While risks remain, we will continue employing the administration’s growth and opportunity strategies to further improve the quality of life for Detroiters,” said Jay Rising, Chief Financial Officer, City of Detroit.
The forecast is prepared by the City of Detroit University Economic Analysis Partnership, which is a collaboration of economic researchers at the City, Wayne State University, Michigan State University, and the Research Seminar in Quantitative Economics (RSQE) at the University of Michigan.
Detroit’s economic outlook will be discussed at its next Revenue Estimating Conference at 1 p.m. on Monday, September 11 in the 13th Floor Erma L. Henderson Auditorium.
The public is invited to attend in person or virtually at https://cityofdetroit.zoom.us/j/89541261477.