Detroit unemployment sits at 25%—lower than pandemic peak, twice pre-pandemic rate
Detroit’s unemployment rate—the proportion of working-age adults in the labor force but not currently employed—has held steady around 25% since fall 2020, according to data just released from a University of Michigan survey.
While the current unemployment rate is more than twice what it was prior to the pandemic (11%), it has fallen considerably from its peak of nearly 48% in June 2020.
The data obtained from the representative survey of Detroit households conducted by U-M’s Detroit Metro Area Communities Study reflect the same general trends found by the Current Population Survey and the U.S. Bureau of Labor Statistics Local Area Unemployment Statistics in Detroit.
While the Detroit Metro Area Communities Study surveys are not collected monthly and thus cannot reflect some of the dips and spikes captured in monthly labor force estimates, the data capture the experiences of a representative sample of Detroit residents that is nearly 20 times the size of the sample of residents captured in the Current Population Survey estimates. This also differentiates the DMACS data from the U.S. Bureau of Labor Statistics’ estimates, which are produced from statistical models based on aggregated data.
The survey finds that among those currently unemployed, just 20% are recently unemployed (out of work for five months or less) while 33% have been out of work for six to 11 months. Nearly half (47%) of unemployed Detroiters report being out of work for more than a year.
Importantly, Black and Latino Detroiters, low-wage earners, residents without college degrees and adults in households with kids were more likely to be unemployed than other Detroit residents. The effects of unemployment are most pronounced among lower-income Detroiters, with nearly half of Detroit residents in the labor force with household incomes under $30,000 a year being unemployed, compared to 6% of those with household incomes of $60,000 or more.
Most unemployed Detroiters attribute their unemployment to the COVID-19 pandemic. Among the multiple explanations that each respondent could offer for their unemployment, 49% say their place of work has closed and 50% say they were laid off due to the pandemic.
Additionally, 10% of unemployed Detroit residents say being sick with COVID-19 or caring for someone with COVID-19 contributed to their unemployment. One-quarter (26%) of unemployed Detroit residents report they had to stop working due to family and personal obligations resulting from the pandemic.
While there was no evidence of significant gender differences in who was unemployed, the reported reasons for unemployment were different among women and men. Forty percent of unemployed women report they are not working in part due to family obligations, compared to only 12% of unemployed men.
“Unemployment remains a significant problem among Detroit households, and like so many issues, it does not fall evenly across Detroiters. We see ongoing evidence of the pandemic as an economic crisis as well as a public health crisis,” said Elisabeth Gerber, one of the faculty research leads for DMACS, professor of public policy and research associate in the Center for Political Studies at the Institute for Social Research.
In addition to the active members of the labor force who are unemployed, 42% of adults in Detroit are out of the labor force. This marks a small increase in the number of Detroiters who have left the labor force relative to March 2021 (37%) and October 2020 (38%), according to DMACS surveys.
DMACS has been surveying representative samples of Detroiters since 2016. This latest wave of the survey was open June 2-July 9, 2021, and captures the views of 1,898 residents. To represent the views of the city as a whole, survey responses are weighted to match Detroit’s population demographics.