Full Employment Could Return to Detroit Faster Than You Think

Some estimates of U.S. growth don't project the country to return to full employment until the end of the decade. Indeed, even if we doubled our monthly job creation pace of the last year, we wouldn't achieve normal employment until the 2020s. But according to demographers from the Brookings Institution, Detroit could return to normal unemployment by 2015.

Unfortunately the reason Detroit's unemployment is expected to fall faster than the rest of the country isn't just that the city's economy is returning from the brink. It's also the things that aren't returning: Namely, Detroit residents.



What's likely to happen in Detroit? The metro area's labor force has fallen by an average of 0.07 percent per month since the beginning of 2000, largely because the metro area's population has declined. (The labor force fell at a slightly slower rate since the beginning of the Great Recession, perhaps because people who would otherwise have left the region couldn't sell their houses.) Suppose that rate of labor force decline continues, and that the metro area's employment rises by 2,164 every month, as it did in November. (That's a slower job growth rate than the one I assumed for the nation as a whole.) Then the metro area's unemployment rate will be just under 4 percent in July 2015--about a year sooner than it would reach that target if it fell in proportion to the national rate.

Read the full story in Brookings Up Front blog.

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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