Archive for the 'jobs' Category

More Detroit vs. The Media drama, and What Detroit has, what Detroit’s losing, and what Detroit needs

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This was supposed to have been posted a week, or so, ago. But thanks to my old job, four days out of town, jury duty, and a new job to start, none of what’s here is new. But, since I went to the trouble to write it, I’m posting it anyway.

Detroit vs The Media

The drama never ends for Detroit. NBC hates Detroit, and now ABC as well. ABC’s new crime drama set in Detroit has got some all bent out of shape once again. As always there were some interesting comments including:
“Why must the media prortray Detroit is such a bad light.” - Do we always have to ask this question? Seriously, is there any question as to why the media portrays the city the way that it does? Besides, did anyone complain about Law and Order making New York look bad, or CSI making Vegas look bad? Detroit deserves a break because it really is that bad? If only the media would give Detroit a break, surely things would improve. There were, as always, so interesting comments.

“Perhaps a chat with the directors of ABC would change their mind.” - Doubt it. Why do Detroiters always want to have a chat with the media about the way the city is portrayed? And, anyway how would that conversation go? Detroiter - “Will you to stop portraying Detroit in a negative light?” ABC exec - “No.”

“And I think the promo is wrong in saying that Detroit is the murder capital. I think we are up there, but more like number 3. New Orleans is #1″ - Yeah, take that ABC. They really ought to get their facts straight. Oh wait, according to ABC Detroit was the murder capital in 2008…hmm coincidence or conspiracy to paint Detroit badly?

“Was anything truthful said? Or is it Americas’ loss of integrity personified.” - Huh?

“I’m as sensitive to Detroit’s image as anyone, but I think that viewers will be able to decipher this as fiction.” - One might think so, but judging by reactions, that sentiment is not shared by many others.”

“So i can understand why ABC is doing a crime series set in Detroit.It’s about time. What took so long? I think I’ll send them some story ideas. I have many, too many, & these are all true, nothing make-believe.” - This one makes sense..

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What Detroit Has

What does Detroit have, beyond high unemployment, high crime rates, and bitter defenders? Well according to POP City, Detroit has a few things Pittsburgh ( and presumably, other Rust Belt cities ) could use. Of course POP City is owned by Issue Media Group, which also just happens to publish Model D and Metromode as well, booth of which ardent Detroit boosters. Nonetheless, perhaps there are some good things that Detroit has, that other places could use. According to POP City, Detroit has:

The Greening of Detroit:

I can imagine that almost no other city in the United States has an organization quite like the Greening of Detroit, of course no other city has the amount of abandoned land that Detroit has. I like the Greening of Detroit and what they do.

Tech Town:

Tech Town is a great idea, and I hope some great things come of it. Bringing smart, creative, and innovative people together is exactly what Detroit needs. Technology may make it possible to work in isolation in Bad Axe, but in reality innovation comes from people pushing the envelope, and building on one another’s successes. This doesn’t often happen in isolation. It’s the reason Silicon Valley, Boston, and NYC keep creating new companies, and why they get so much of the investment dollars.

The M-1 Rail Project:

Detroit doesn’t have this yet. It is hoped that construction will begin before the end of 2010. Unfortunately, it takes several years to complete a section of rail through an urban area, and in an area that continues to lose population, it’ll will be difficult to make it happen.

Art:

Detroit does have this, and some good stuff at that. But projects such as the Heidelberg Project are products of an extreme situation that nobody wants. I really like the Heidelberg Project, but I’d rather not have the massive amounts of blight and abandonment that has to go along with it.

A Food Scene:

I can’t comment on Pittsburgh’s food scene, but Detroit’s food scene is decent, but not incredible. I love Slow’s but, even cities with lower populations, such as Denver and Portland, have better food scenes than Detroit. Five or six places…even a dozen good places aren’t enough for an area the size of Detroit.

Regardless of whether or not I feel this list is a good example of what other areas need or not (I don’t), the metropolitan Detroit area does have somewhere in the neighborhood of 4.5 million residents. That’s a significant amount of people, who could be customers, and employees or employers. Whether or not the area can capitalize on that depends on the decisions the residents, businesses, and politicians make over the next decade or so. If we were to look to the decisions of the past 40 years the outlook would be rather grim. Perhaps though, the next generation of policy makers can make better decisions than the last.

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What Detroit’s Losing

Unfortunately this is an easy one. Detroit’s losing everything from people to money. What is really bad, is that metro Detroit is losing young college grads. I recently read this article about college education rates in Milwaukee, Wisconsin. Scroll down to the section titled, “By the Numbers”. My guess is Detroit doesn’t compare very well, even considering Milwaukee’s meager numbers.

What Detroit Needs

What Detroit needs is pretty much the inverse of what it’s losing, including a young, educated workforce, immigrants, Innovation, and, well…pretty much everything. Recovery seems to be a tricky, chicken/egg situation. Hi tech businesses locate where the talent is. Talent locates where the jobs are. Jobs are found where the hi tech businesses are. With each being a prerequisite for the other, how do you attract either one to Detroit? This is one of the arguments many make against authors such as Richard Florida. Reading what urban theorists such as Florida have to say make many feel that the”in” places, such as Chicago, D.C., and Silicon Valley, have already won. There’s no possible way to beat them if you take Florida’s theories without actually reading far enough. And that’s true to a certain extent. Nobody was able to beat Detroit as the automotive capital for 75 years or so, even with such bad management decisions. However, that didn’t stop Chicago, D.C., or Silicon Valley, and many, many other places, from thriving. Detroit doesn’t have to be Chicago, but it does have to be something other than the same old Detroit we’ve all known for far too long.

Job obsolescence and career change

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There have been plenty of discussions about job obsolescence in recent years. Whether it’s manufacturing, journalism, or the one closest to me, photography, workers in many industries have felt the impact. Of course I don’t think those professions are like the ones in this article on obsolete jobs, but certainly they have been heavily impacted by globalization and/or technological innovations and changes. There have also been plenty of stories of mid-life career changes whether by choice, or otherwise. In Michigan the focus has been on auto workers. And the stories have ranged from workers opening their own businesses, to retraining for the health care industry, to sadly, doing nothing. Fear and anger have been common themes in Michigan for some time now. While I am glad I’m not right out of college, or just trying to hang on until retirement (yeah, like that’ll ever happen for me…), I have experienced both job loss, and mid-life career change. Of course it is frightening to face an unknown future, while figuring out how to make a decent living. But I know it can be done. I’ve been there. I have never worked in the auto industry. No I was payed much, much less, for the majority of my career. But, nonetheless, this is my story of job obsolescence and career transformation.

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In between our country’s two most recent economic downturns, I managed to fulfill one of my goals; that of being a full time photographer. Like so many others, I had managed to make it all the way through college without any idea of what I’d like to do with my life. When I was younger, I had, at different times, wanted to be everything from a professional hockey player to an artist. All of them were very difficult, if not nearly impossible, to achieve. Unfortunately, I never had the desire to be an engineer, a doctor, or an accountant (though I’ve worked in two of the three fields (though, not the one that requires eight years of post graduate schooling and training). But finally, after jobs in sales, accounting, credit and collections, and working in various retail jobs, I began assisting a commercial photographer. Eventually I became the studio manager. At the same time, I began to build up my own business,  and after several years, I finally managed to get enough work to actually call myself a photographer…just in time for the industry to tank.

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I am no longer a full-time, professional, photographer. I still make money from it, but it no longer makes up the majority of my income. I know photographers who are barely hanging on, refusing to give up. I also know of other photographers, who like myself, didn’t find the struggle worth it, and have moved on. It’s not easy to give up on a dream, and it’s harder still to move on to a new career if you don’t have the skills, confidence, or necessary experience. This is, of course, not limited to photography. It may not have been anyone’s dream to work on an automotive assembly line (or it may have been…who am I to say?), but for many it’s been a difficult transition to move from a $40/hr (or more) job, with great benefits, to one that requires potentially more training, and at the same time pays less, and has, often times, much worse benefits. In my case I wasn’t giving up much in either the pay column, or the in the traditional benefits column. What I had to give up was much more valuable to me: freedom and creativity. I mourn the loss, but I’m not bitter or angry. It is what it is.

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You can find plenty of bitterness and resentment (just go to a job site forum)  relating to job obsolescence, but there is no stopping change. It’s not difficult to find anger expressed these days relating to a fear of possible, or pending, obsolescence. I visited photography business forums for years, and constantly saw, and experienced, the anger of more established (older) photographers who, at one point in their career were making really good money. Usually the anger came out during discussions regarding pricing of photographic services. Newer photographers often find themselves in a desperate situation. They often have little to no experience, no work, and if they went to art school, huge amounts of debt. The older photographers would admonish the desperate young photographers for charging too little, thereby dragging pay down for the entire industry. Due to lowered barriers to entry, and various romantic notions of photographers, there was an ever increasing number of photographers looking for work. skyline_pano_4.jpg Meanwhile, the industries that pay photographers, namely advertising, editorial (magazines and newspapers), and publishing, were in increasingly worse shape. The decline of manufacturing in this country not only put a lot of laborers out on the street, but ad execs, editors, and of course, photographers as well. I was fortunate enough to recognize the writing on the wall early. Even before I made a living from photography, I saw the annual revenues of the commercial studio I managed decline dramatically each year beginning in the late 90’s. I managed to make it because I cut overhead to a bare minimum. I owned almost no equipment (except cameras and computers), had no studio (other than my basement), and figured out this internet thing pretty early. I got a site online early, bought some Google AdWords, and soon after had full time work. Of course, eventually everyone else figured it out too. And to make matters worse, as the really good paying gigs dried up, everyone began to compete for the few remaining jobs. It didn’t take long before I was competing against huge studios for small time work.

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I once heard that in business, if you believe the industry in which you operate is growing, you should reinvest profits in your business, and if you believe the industry is contracting you should bank all profits. I did the latter almost from the beginning. I also decided that I needed more transportable, and more importantly, more in demand skills. It’s not that you can’t take photography with you, but photography is a business that takes time to build up. Photography, for all but the really big names, is regional, and building a business in a new location takes time. Since the web seemed to be a growth industry, and I enjoyed design, I decided web design would be my next career. Because of an extremely low overhead, savings, and the new skills I was learning, I felt confident that I would be fine. My new career ended up not being web design, but rather web development in general, and user interface engineering specifically. 09242007_0130.jpg It took years. It wasn’t easy. And it often left me with little to no free time. But it’s been worth it. And of course I still do photography, only now I only do what I want. In fact, I’m probably much more well known for my personal projects than I ever was for my commercial work. It’s much more satisfying, though it doesn’t pay much of the bills anymore. Of course, if the industry ever turns around I’ll be ready. Though, who knows, maybe I’ll be on to something different by then.

The Big Three: A case study on the reluctance to change

09150204_09.jpgNot too long ago, I heard The End Of The Line For GM-Toyota Joint Venture on NPR. I had already heard about the closure of the plant, but knew very little (actually, nothing) about the history of the plant and what it represented for the American automotive industry. This paragraph pretty much sums up the whole piece:

“In the mid-1980s, Toyota took over the Fremont plant, one of GM’s worst, a factory known for sex, drugs and defective vehicles. And as part of an historic joint venture, Toyota turned the plant into one of GM’s best, practically overnight.”

NPR reported on the history of the plant. At one point the assembly line output cars with engines in backwards, missing steering wheels or brakes, and cars with with front ends from other cars. Booze was common on the line, and nobody dared stop the line for anything. Eventually Toyota and GM partnered up to run the plant. But first they sent employees to Japan to learn Toyota’s way of doing things. Of course Toyota’s way was very different. It was pretty much the complete opposite of how GM had been run the plant. Upon reopening, the plant began producing some of the highest quality cars in America. So what did GM do next? Did they take what they had learned and apply it elsewhere? Ahh…no. In fact one of the NUMMI “Commandos” quit in frustration.

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A year later GM did try to apply what they had learned at NUMMI to other plants.  At a plant in Van Nuys nobody wanted to change.  I wasn’t shocked by the resistance to change from rank and file workers.  After all, the initial reaction by most people to criticism is defensiveness. Most do not want to be told they are doing something wrong, or even that they could be doing something better. I wasn’t even shocked to hear how one plant manager asked a NUMMI Cammando to leave the plant after a presentation on doing things the NUMMI way. Even after plants across the country began closing and GM began losing market share quickly, the resistance remained. What did shock me was the fact that upper management at GM allowed management at the plants to not change. “Who was in charge?”, one might be inclined to ask. According to the NPR story, the “plant managers were king.” I guess I shouldn’t have been surprised, as this is the kind of dysfunctional leadership I’d experienced for decades in the metro Detroit area, and to be truthful, in my corporate experience elsewhere. The Big Three were just bigger and perhaps more dysfunctional than most. And unfortunately they were this dysfunctional during a profound shift in the world economy. It’s bad enough when the average person refuses to pay attention to the writing on the wall, but downright idiotic and shortsighted when leadership ignores it.

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Unfortunately this seems to be a common theme in American corporate culture. I suppose I shouldn’t be shocked about any of this. The shareholders at public companies frequently reward pathetic leadership. There is rarely any incentive lead a company toward a long term course of profitability. Instead they give big bonuses for short term profitability. Any sports fan knows that teams go through periods of mediocracy as they build toward long term competitiveness, yet in the world of high paid corporate cronyism, no one seems to give any thought to a few years down the road.  In corporate culture almost any cut seems to be rewarded. Even cuts that will harm company for years to come seem to be rewarded. Seemingly, as long as a company beats the next quarterly projection the stock goes up. And if stock goes up, shareholders are happy. And if shareholders are happy, execs get big bonuses.

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Is it any wonder my confidence in our corporate leadership ranks right down near that of our political leadership?  Now that the Big Three have possibly hit rock bottom, do they have the leadership in place, and the will to make the necessary changes? It seems that perhaps the threat of extinction has shaken enough people, in at least two of the three, that perhaps things are headed in the right direction. Too little, too late for so many. Sad that the ship has to begin sinking before the will is there to fix  the problems.

Who understands how Detroit needs to change?

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After living and working for the past two years in D.C., and Denver, Colorado, coming back to the Detroit area is a real eye opener. What was once a maddening and frustrating place to live is now just plain depressing. With the real unemployment rate estimated to be near 20% for the state, and a ridiculously high 50% for the city of Detroit, still falling real estate values (down 40% in my area, and including our house), a crumbling infrastructure, financially strapped municipalities and school districts, and a apparent 50% commercial vacancy rate (just judging by what I can see..), the metro area seems to continually worsen. Each time I come back it seems that things couldn’t get worse (even though I don’t believe the area’s hit bottom yet), yet it always does.

Living in the area, one becomes accustomed to things residents in most other areas would never imagine. Roads that get complaints in other areas, metro Detroiters can only dream about. The public transit that others complain about being crowded or expensive, doesn’t even exist here. Same with the practically non-existent bike lanes. In Denver I ride my bike everywhere, only getting in the car to make longer distance trips. It’s something that I found to be unacceptably difficult here in southeastern Michigan. When I did make a trip by bicycle here, I was that strange person riding their bike on the road carrying grocery bags; presumably some poor sap who’d had his license taken away, or who didn’t have enough money for a car. In Denver, I’m just one of many using a bicycle for, believe it or not, transportation. Imagine that… Our neighbor here in metro Detroit would drive one block to buy cigarettes.

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Driving around metro Detroit, it’s rare to see more than one or two people out getting exercise of any kind. In Denver it would be rare to see less than a dozen people exercising on my two mile ride to work. The weekly Wednesday night cruiser ride in Denver attracted up to 850 riders on a single night this past summer. Of course one has considering how many other options there are for socializing, entertainment, and outdoor activities. On any given week there will be rides, runs, creative Meetups, art openings, and just about anything else an active person under the age of 95 might enjoy. I know some of these things exist in metro Detroit, but the often long distance between them isn’t just inconvenient, but a huge waste of time, and dangerous when you consider all of the different highways one would have to travel to get from, say, Royal Oak to Ann Arbor on a weekday evening.

I have a point, beyond yet one more rant about the area. And the point is this: does anyone, who hasn’t left, or doesn’t want to leave, understand what needs to change about the metro area? Everyone knows that Michigan needs jobs. But I get the feeling that many who remain believe that those who left were weak, or quitters, or don’t like hard work. Those “quitters” who left the state, left because they had other opportunities…better opportunities, and most likely a chance at a better lifestyle. They didn’t leave because they weren’t up for a challenge. If an area offers jobs, and “opportunities” rooted in the past, and another area is embracing the future, why would I choose that challenge? If you can be on a better team, who wouldn’t choose it? Sure, some would rather be a big fish in a small pond, but this particular pond keeps getting smaller, and dirtier.

The point is often made that the area needs to bring back manufacturing jobs. I wouldn’t argue that manufacturing jobs…heck any jobs, would be good for the area. But maybe what the area really needs is to face reality. Metro Detroiters need to adapt to changing times. An education may be a good place for many to start. The claim is often made that metro Detroiters are scrappy, gritty, and hard working survivors. What mid-west city doesn’t believe that? The question is, what do survivors do when there old way of doing things doesn’t work anymore? They change their way of doing things. What did metro Detroit do when it was obvious the ways of the past were going to end soon? Nothing. Detroit made pretty much all of the same mistakes Pittsburgh has made, but unfortunately, unlike Pittsburgh, Detroit’s had very little of the fortuitous investments in other industries.

The question that should be asked, that often isn’t, is why have our young and highly educated citizens been leaving for decades? If the question was asked of every one of them, that has left the state, one would get a variety of answers from jobs to lifestyle. If you were to ask what it would take to get them to come back to metro Detroit, the answers would be equally varied, but I doubt many want to come back for traditional manufacturing jobs. Nor did many of them leave because of a lack of traditional manufacturing jobs. As a friend said the other night, “the state is a storefront. Why would anyone want to come in?”

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When time Magazine offered advertising space for a campaign designed to draw this very demographic to southeastern Michigan, they asked five large agencies to answer the question, “If I’m young, talented and creative, and open to all kinds of opportunities, why Detroit?” Take a look at the ads… My personal opinion is that these ads do a better job of answering, “if I’m young, talented and creative, and open to all kinds of opportunities, why leave Detroit?” The ads do a great job of pointing out the disconnect that exists between those who have lived here a long time, and made lots of money here, and those of a younger more mobile generation. Outside of the suburbs of Detroit, who cares about Kid Rock? It really makes me wonder, if these people even understand what types of music the target demographic listens to? I can tell you, it’s not Kid Rock. Not a single one touched on any compelling reason for someone from outside of the area, to relocated here. Why are we even asking the old guard how to attract a new generation of creative, enthusiastic, and highly motivated entrepreneurs and creatives? L. Brooks Patterson still wants to stake metro Detroit’s future on the widening of I-75 from 8 Mile to M-59. MDOT and SEMCOG still seem to believe all transportation should be done in an automobile. No bikes, no trains, no walking…again that’s for the Third World poor, such as those in New York, Chicago, Atlanta, San Francisco, Portland, Denver, London, Brussels, and Toronto.

The morning after I arrived back in metro Detroit, we watched part of a round-table discussion on a local news show. The topic was, of course, about the area’s future. It appeared that not one of the participants was under the age of 60. Not that those over 60 have nothing to contribute. But asking only those who lived through a very different time period how we should proceed into the future misses the point entirely. We are in this situation because we (they) thought that what worked in the past would surely work in the future. If it was good enough then, it’s good enough now. Needless to say, watching did not make me feel very encouraged about the future of metro Detroit. Does anybody here, in any leadership position, with any power, or with money, get it yet? Do they understand the real issues? Do they know what it’s going to take to bring people back, or to make them stay?

Freelance Nation

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I recently got to thinking about freelancing, why I and others do it, and what it means for cities like Detroit. An article on Business Week’s website titled, Beware the Freelance Economy, discusses a recent trend in this country in which the share of business with no employees (freelance) has increased relative to traditional employee businesses. The author contends that freelance businesses do not increase employment, nor create wealth. Furthermore the author believes that, “…people would be more productive in this part-time work if they did it as employees who were part of a bigger organization that could achieve scale economies…” He finishes up with a bit of a warning, and a general question as to why this trend is occurring.

Having been a full time freelancer, or self-employed individual as I liked to call it, for almost five years, and now a part time freelancer, I feel like responding to some of the points made in the article. I also think I have a pretty good answer for why this trend, that the author finds so troubling, is occurring. Being a fairly typical Gen Xer, I saw the Boomer Generation as missing out on so many important parts of life. I lacked direction, and questioned everything. The answer, “because that’s life…” or whatever, didn’t quite cut it for me. I saw a lot of, unnecessary in my mind, stress, and anger in the generation ahead of me as they strove for middle and upper management positions at large corporations that ultimately failed to offer the promised stability or loyalty that their employees seemed to give them.

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This appeared to be the American Dream. Work 60 plus hours at a company that saw you as disposable, so you could own a couple of cars and a house in the suburbs. Along with that came dedicating your life to a corporate entity that often became more important than family, hours waiting in rush hour traffic, and generally mind numbing and unrewarding work. Like so many others though, as much as I despised the large corporate workplace, I found the need to make a decent living, have health insurance, and a desire to save some money for later in life. Working in bike shops, and the like wasn’t cutting it. After college graduation I bounced between “real” jobs like accounting, and fun jobs like working in bike shops. The real jobs left me feeling unfulfilled. I worked hard at them, and was often recognized by my employers as a top employee, yet they did little for my soul. Working in the bike shop, on the other hand, allowed me to introduce people to an activity that could become a meaningful part of their lives. Often times the relationship between customers and employees turned into long term friendships in ways they rarely did in my “real” jobs.

During the almost five years of self-employment, I experienced unprecedented self motivation, and dedication to my work. Ownership, it turned out, was very important to me, as was actually being interested in what I did all day…every day. Furthermore the feeling of control, and the escape of the high school mentality of my “real” jobs, where employers cared more about when I came and went and less about what I actually accomplished, was rather nice. Self employment comes with it’s own set of headaches, but what job or career doesn’t?

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Now, almost everyone I know is self-employed or a part time freelancer. We all do multiple things with our lives. Dedication to the big corporation isn’t as appealing, doesn’t seem to offer what it used to, and certainly isn’t the end all, be all of most people’s lives. Personal growth and satisfaction seem to be as important as money these days. And while a part time job at Starbucks may (this is arguable) contribute more to wealth and job creation than freelancing, it may not contribute more to self-fulfillment and personal growth. While the author, Scott Shane, may be a professor of entrepreneurial studies, most freelancers couldn’t care less about the National implications of their side businesses. They do it because they want to. They do it because they need to. And this is as it should be. As a country we should embrace this. If someone feels motivated enough to do work on the side, it should be encouraged. My freelancing earns me more money to me than a second job would, and employs me just as much. The additional money earned is put back into the economy when I go out to eat, go on vacation, or by a new bicycle. It’s money that wouldn’t have been spent with out the side work. And more importantly it’s fed my need for personally satisfying work, and has led to other career opportunities that I would not have had otherwise.

Finally, what does freelancing mean to cities like Detroit? And why should cities like Detroit embrace freelancing and self-employment? While most freelance work may never lead directly to larger, job producing companies, some will. Connections will be made, networks will grow, and the area can benefit directly from them. Portland, Oregon, is an example of a city that has, for many years, attracted freelancers, and many companies have been started by the self-employed joining together. Detroit currently has a low cost of living, allowing for freelancers to keep a low overhead while building their business. Most will never amount to more than that, but even if a few do, it will contribute to health of the economy and the reputation of the area. A good reputation for entrepreneurship, self-employment, and creativity will attract more of the same. The alternative is always relying on someone else to provide for employment opportunities. And as it stands right now, nobody seems to be stepping in to fill that need.

Who’s left Michigan? And who’s left in Michigan?

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The other night I had a conversation with someone still living in metro Detroit. We talked about the national economy, and local Detroit metro economy as well. Now that I’ve been, for the most part, working outside of Michigan for the last couple of years, I see things from a slightly different perspective. Those who live in Michigan are, I imagine, feeling a greater weight,  than those of us who live in areas with a better economic outlook. While I’m not viewing the world through rose colored glasses, I certainly see a better national future than did the person on the other end of the line. I believe many regions in this country are well positioned for the future. Unfortunately, where we did agree was in the belief that Michigan, and metro Detroit, is not one of those regions.

For many years now, I’ve been stressing that as bad as things were, I believed they would get much worse for the area. Upon moving back to metro Detroit from Portland, Oregon, I suffered from a pretty big dose of culture shock. The people, the place, and mostly the attitude was completely different. In Portland people, with good educations, often with plenty of experience as well, moved to the area just to be there. They wanted to be around other young, educated, and often creative, individuals. They wanted to be around the kinds of people that start businesses like Resource Revival, Portland Design Works, and River City Bicycles. They wanted to have the chance to work for companies like Nike, Keen, Adidas, Weiden + Kennedy, and Second Story Interactive. I’ve never been able to say the same about Detroit. Though I’m sure there are some who have made a decision to live in Detroit for reasons other than family or a job, I’ve never met any.

Growing up in metro Detroit almost everyone I knew with a lot of money worked in the one industry. If they didn’t work for the Big Three, they had a family business, and it was most likely an automotive supplier, or somehow serviced the auto industry. The pay was often ridiculously high, and the bar was often too low. The pay didn’t necessarily go to the best, but to most well connected. Of course this wasn’t, and isn’t, strictly a problem in one industry, but as the auto industry grew, the problem grew too. At one point in the late 80’s and early 90’s the zip-code I lived in was the wealthiest in the country. This occurred even as the auto industry was in decline. Already almost everyone I knew, around my age, wanted to “escape” from Michigan, and the bloated, insular, and dysfunctional industry that dominated the area. Unfortunately the high pay, and security of the jobs in the industry sucked many back to the state after college, but the foundation for a healthy, innovative, and diversified economy was long gone. As soon as the over heated economy, built on debt, began to cool, the exodus from Michigan moved into overdrive.

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Who has left? Anyone with a good education, or skills that were in demand nationwide, such as software engineers, chemical engineers, and many other high tech and creative workers. They were the ones who could go almost anywhere. If you had a good education, and new you could get a good job anywhere, would you stay in a region whose main city leads the nation in crime rates, unemployment and poverty, suffers from a low level of education, has few cultural and recreational opportunities, bad traffic with no alternatives, and a sprawling and poorly designed metro area? Of course the suburbs don’t suffer as the city does from these afflictions, but let’s be honest, young, educated, creative types like cities. No matter what your middle aged, suburb loving, curmudgeon beliefs are, the younger generation likes what cities offer. Even if they don’t live in the city, they want to be near a vibrant one. They want culture, jobs, variety, choices in transportation, and vitality.

So who is left? Is it, as this article claims, the strongest that remain? Maybe those who stayed are stronger. Who knows, though it looks like it is the educated who are leaving, and it appears that the poorer, and less educated would like to leave, but find it much more difficult. But, regardless, metro Detroit needs much more than strength. It needs leadership, creativity, innovation, and vision. Detroit needs a new direction. There are a few good signs, as the article points out, but why did it take so long for anyone to take action? What was going on the last 20 years or so? Nothing as far as I could see. I was there. It wasn’t necessarily that no one cared, but that no one cared to see what was coming. Sure there were the few who were planning for the future, but for the most part it seemed as if Michigan was enjoying a party most believed would never end. Now the party is over, and many are pointing fingers. It’s the liberals fault. It’s bad tax policy. Blah, blah, blah… The ship is underwater. Time to stop the blame game.

It’s not that I believe Detroit has no future, it’s just that I think that it’s going to take a long time to attract the people that are needed to turn things around. Maybe a turn around isn’t even possible. Do we even want to go back? What we really need is to move forward. Michigan has waited far to long to face what was the future, and is now the present, but better late than never I guess. I certainly don’t have the answers, but I do know that unless Michigan can attract, and keep the types of people that are leaving, the state doesn’t have much of a future.

Health care can’t save Michigan, or I told you so part 3…Michigan’s future, and some photos

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In May of 2008, I read an article regarding the expansion of the area’s hospitals, and the growth of the health care industry in general.  At the same time, I also wrote about how I had viewed this as a potential problem for a long time. The idea, at the time, seemed to be that Michigan’s, and in particular, metro Detroit’s, economy could be saved by health care. And, so the growth of the local hospitals could put more people to work. Former automotive employees could be retrained to work in the health care industry. Best of all, the health care industry was largely immune to the ups and downs of the economy. People always need health care! And with our aging population, we’d have an ever increasing supply of patients.

What wasn’t often mentioned was that Michigan, and again, metro Detroit in particular, was losing population at the same time that the hospitals were expanding. The problem with the health care as savior plan, was no different than the belief that the housing market, or the commercial real estate markets would keep growing despite a declining population. From my conversations with industry “experts” and from reading and watching the local news, it was obvious that many people, whom I had generally assumed knew more than me, couldn’t imagine a Michigan any different from the one they were living in in 2005 or so. The real estate markets were booming, the health care industry was booming, and the Big Three seemed to be doing not to terribly bad (other than maybe Ford). If one only looked at the surface, things may have looked so-so in Michigan, but if you were to have looked a little deeper, things looked like they were going to become downright horrible. The population had been stagnant or declining for a while. Michigan was one of the few states in recent history with this distinction. We were far too heavily dependent on an ailing industry with a broken business model, whose employee’s pay rate was not based off of market forces in any way, and whose management teams couldn’t seem to see past the ends of their noses, or a least past the next quarterly profit report. And we kept on building, and moving further from Detroit, using used tax payer money to help build infrastructure for new developments, while our old infrastructure crumbled. It angered at least a few of us, that no one seemed to be able to (or at least didn’t want to) see that a declining population whose economy was based on one broken and declining industry, and whose current investments were being made on new, and largely unneeded infrastructure, was doomed to failure, and soon.

In my business, when I asked questions about the, seemingly huge, number of new housing developments being built in the middle of nowhere, I was constantly told things like,  “our projections show that we can build like this indefinitely”, and “as fast as we build them, people buy them”. Were are these people coming from, I would ask. The answer was usually something like, “a lot come from Detroit, or from older suburbs”. Apparently, no one thought to follow this logic to the end of the line. If Detroit has been losing population for 40 years, and people move from Detroit to Dexter, who is buying the house in Detroit so that the purchase in Dexter can be made? People were buying houses in Detroit at the time, but obviously less than were leaving Detroit. The problem was simple. You can not expand the number of houses if the number of people is going down, with out driving prices down. But what was such an obvious sign of trouble at the time, is that prices were rising, and people were sure they would keep rising.

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So Michigan had a declining population, dependent on a downsizing industry with a broken business model, that had already been laying off large numbers of employees for years, an over saturated residential and commercial real estate market, and of course a largely under educated work force. But, we need not fear because the health care industry was going to save us. We’d all become doctors, nurses, assistants, or administrators, and we could just all be at the hospital all the time, either taking care of someone, or being taken care of by someone else. It’s the logic that seemed to be used by the Big Three for a while. For quite some time, almost all television advertising was directed toward their own employees. Who advertises to themselves? I’ll pay you, and you can then give it back to me in exchange for the thing you just made, that I paid you for. Maybe if we just make a chain letter, and send it to all of our friends, we can all get rich!

Unfortunately, a market based economy requires more than one or two industries to work. And so, it was always obvious, that unless something fundamental changed in Michigan, that we couldn’t depend on the health care industry to save us. As it turns out, the health care industry isn’t immune to downturns in the economy after all. It should have been obvious all along. If you are out of a job, or have no insurance, do you put off medical care and procedures? Of course. And if there are less people in the state, are there less potential patients? Of course. Michigan, like any other state, can’t depend on any one industry to keep the economic engine running. It takes a progressive, and diversified economy to be successful. No one knows for sure what the next big industry will be. Who predicted Google? At the time, most people thought search engines couldn’t possibly make money, and yet online advertising, has been a growth industry for years. Trying to create a plan for the future, based on the past, is unlikely to work. Sure the past holds lessons to learn from, but the future remains unknown. What Michigan needs to do is to put a priority on education, entrepreneurship, and quality of life. Of course Michigan’s broke, so it’ll be very difficult for the government to do what is needed, but the real change needs to come from the citizens who live there. If Michigan becomes a holdout of stodgy, grumpy, and angry citizens, that resists any change at all costs, then the downhill slide will continue for decades more. But if the cheap living can attract a new younger and more progressive generation, then Michigan may have a chance.

A lesson in free speech, blah, blah, something, something, and some photos of Detroit

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After a week of listening to crazy political, economic, and social theories, beliefs, and comments, I felt the need to vent. Unfortunately I wrote way too much, so I’ll only post a little bit at a time. I hope not to come off as preaching from a soap box, but rather presenting information that seems to be too often misunderstood.

Having a discussion about politics is similar to a discussion about religion. It takes the right combination of individuals to have a civil discussion (as evidenced by our recent national political screaming matches…err, I mean discussions). Unfortunately, bringing reason and facts to a political discussion is about as welcome and useful as it is in most religious ones. That is to say, facts and reasoned arguments are not very welcome at all. It’s too bad, as a debate of political, economic, and social theory is a good thing. Yet it seems to be almost impossible to have. If you are going to disagree, at least get your facts and statistics straight. As Mark Twain said, “Facts, or what a man believes to be facts, are always delightful - Get your facts first, and then you can distort ‘em as much as you please.” That way if you want to make stuff up, at least you’ll be less likely to come off as part of the lunatic fringe.

The first topic in which it was obvious many of the participants of the “discussions” didn’t have much of an understanding is:

Free speech, and the protection of it under the First Amendment of the Constitution

From the Constitution: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

Note, you do not have a protection from corporations, private businesses, or individuals. Therefore if someone in the press criticizes what you have said, or suggests you shouldn’t have said it, your right to free speech has not been violated. If an online forum deletes your idiotic (or thoughtful) comment, your right to free speech has not been violated. If someone tells you to “shut up,” your right to free speech has not been violated. Furthermore, there is a whole host of instances in which, the amendment has been interpreted to allow for the restriction of the individuals right to free speech by the federal government (judicial activism has a long history, knows no political boundaries). Of course this is a very limited presentation on your first amendment protections. It is only meant to explain your right, or lack thereof, as it pertains to the, apparently, very common misconception that you are granted the right to free speech in every domain.

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And here’s the blah, blah, something, something part:

There’s been a claim that the the federal government can’t do anything right (no pun intended). That they’ll obviously bungle anything they do, other than, depending on your point of view, highways, defense, social security, sewers, water, and electricity. In direct opposition of the first statement is a second one. The second statement often used in conjunction with the first says, that the federal government shouldn’t be involved in health care because they’ll drive the private businesses out of business due to a lower operating cost. Well, which is it? It can’t be both. Is the government more efficient…or less?

Don Tapscott provides a good argument in favor of my long held desire to clean house at the Big Three, in a “Crisis of leadership.”

At least we’re not Texas. Does anyone other than a Texan like Texas?

This poor woman decides to leave Detroit after 60 years, and get berated by idiots in the comments. What the hell? Can’t people can’t just say, “good luck.” Or how about, don’t say anything? Really, we’d all appreciate it.

Too little, too late?

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U.S. automakers agree to new fuel efficiency standards. U.S. automakers cut costs. U.S. automakers make fuel efficient vehicles. That’s great. The problem isn’t necessarily with what Big Three execs agree to now, or what they say now, it’s what has happened over the last 35, or so, years. GM, and the other American automobile manufacturers have a really bad legacy. Any other companies that were as poorly managed would be out of business. Even with a massive taxpayer bailout, GM is still filing for bankruptcy. That alone speaks volumes.

While Toyota may be hurting, it doesn’t appear they will be filing for bankruptcy. And, Honda, while posting some recent losses appears to be well positioned for the future. It’s as if the American automotive industry is given a pass for failing to plan successfully for the future. And worse yet, for failures which are often admitted, even by Wagoner himself.

It’s sad. I am still paying on a house in metro Detroit, as are others I’m sure, even while having to leave the state to make a living. We are, in effect, paying the price for the short sightedness of our political and corporate leaders. The Big Three execs seem downright excited about new fuel efficiency standards, and electric vehicles. Too bad they didn’t seem remotely interested even ten years ago, and in fact banded together to fight new CAFE standards multiple times.

The argument, by Big Three defenders, is always, “they sold what the public wanted.” Of course the truth is usually not that simple, nor is the past performance proof of future results. Just because people bought Ford Excursions when gas was $1.25/gallon, doesn’t mean they’ll buy them when gas is $3/gallon. But if we are to believe upper management at the Big Three, no one could have seen this coming. Plenty of people did, and smaller companies with less funding, fewer employees, and much less experience in the automotive industry are now leading the way in electric vehicles. While GM has long since canceled the EV1 program, companies such as Tesla, Fisker, and Detroit Electric are now either already selling, or are close to selling everything from high performance sports cars to affordable family sedans.

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You’ll often hear, that it wasn’t short sightedness. That it must be the unions fault, or perhaps it’s just a bad economy. The Big Three have been losing market share and money for much longer than this current economic downturn. Not that I’m not going to defend the UAW. I believe the UAW leadership was self-serving and short sighted, just like management, and our political leaders. I also believe that while much of the union rank and file knew the good times wouldn’t last, most just decided to get it while the getting was good. That’s a pretty short sighted game plan as well. It seems no one could see beyond the end of their nose.

So now, with Chrysler and GM going through bankruptcy, the Big Three are suddenly excited about fuel efficiency standards, controlling costs, and alternative fuel vehicles. Is it too little, too late? And opinions range from Detroit’s too excited about green cars, to the Big Three’s not embracing green cars enough, to Rick Wagoner is a scapegoat, to Rick Wagoner is to blame, to GM has too many brands, to GM should hold to brands, to Obama is doing too much, to Obama is doing too little. Nobody knows exactly what will work, or even if anything will work. Writers from many media outlets including writers from both the Washington Post and Business Week are at odds as to the reasons for the fall of the Big Three, and how to save it.

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The only thing that seems certain is that whatever the fix is, it’s at least 20 years too late. Already the stumbles of the Big Three are opening the doors even wider for foreign manufacturers. I suppose it’s human nature to wait until the roof is collapsing to attempt to fix it, but with all of the money paid to almost everyone involved, you’d hope for a better outcome. When CEOs are paid millions, you expect them to fix inefficiencies, broken business models, and foresee possible future challenges. Gas prices may not stay at $1.25/gallon, consumers may not always want really large SUVs, and the economy may not always grow at record rates. It seems that the claims that no one could see these things coming are a bit disingenuous. It seems more likely that our leaders were simply blind or ignorant. Consumers didn’t always like SUVs. In fact Jeeps were at one point just for that off road enthusiast down the street. Pickup trucks were for construction workers and hunters. Gasoline is a limited resource. We have experienced rising fuel prices several times before. Consumers couldn’t really afford $50k automobiles, but an economy that seemed good led consumers to leverage themselves to buy Hummers and Escalades (among other things). Of course the economy would slow down. It had to. Anyone who couldn’t see that, simply didn’t want to.

More of the same, or, why I continue to beat a dead horse…

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I know I say the same things over and over. I guess I just feel I can’t say them enough. One of my favorite topics is the need to make the Metro Detroit area an attractive place to live. The usual xenophobic reaction is to resist any kind of change.  The typical mindset seems to be something like the following: If something worked 75 years ago, it’s got to work now. We didn’t need mass transit, bike lanes, or parks then, so why would we need them now. In fact people only go to cities for jobs, right? So we need to get some big corporation to relocate to our sad, depressed area, and give us jobs.

In reality, highly educated, creative, young people go where they want to go. And guess what? They don’t want to go to Metro Detroit. They want to go to cities they may actually enjoy living in, not just one that provides a job. A good urban area can, and usually does attract educated, creative, and entrepreneurial young professionals, so important to economic growth. And young, creative, educated types start companies, and create jobs. Corporations are also much more likely to locate where they can pick from a large qualified workforce.

The metro area, and Michigan as a whole, has not been very forward thinking. In fact it’s pretty much been in reverse, while the vast majority of the country was in drive. Now, believe it or not, G.M. is planning to cut even more white collar jobs,  we are having to loan G.M. $4B more, GMAC is getting a $7.5B loan, and the automotive industry’s pension funds appear to be on life support.

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And to top it all off, Detroit’s got an image problem, largely due to the darn media. Constantly painting Detroit in a bad light; how could they? If only they new the truth; it’s a safe city, with lots of job opportunities and a bright future… Heck, even I am getting hate messages. Apparently I am a “disgusting human being” for taking photos of abandonment, and I surely “could’ve chosen a different subject matter.” Shoot the messenger. Always a good idea. In fact maybe if we say, “Detroit is good enough. Detroit is smart enough, and gosh darn it, people like Detroit”, maybe the abandonment and corruption will magically vanish, jobs will appear, and the economy and unemployment won’t be the worst in the nation anymore. Maybe I can pretend my house is worth more than my mortgage too.

Detroit does have a future of some kind. Most likely though, it’ll never look like it did 4o years ago. It’ll almost certainly be something very different. Hopefully, at the very least, it’ll look very different than it does today. Some possibilities include urban farming, green spaces, giving away land to entrepreneurs and urban villages. It’s obvious that Detroit can’t provide traditional services to the area it currently encompasses. It is time for a change.

Finally, while I feel very bad for the subject of this story, you just have to ask, “what were you thinking?” or “were you thinking?” It’s not like the Metro Detroit areas outlook suddenly went from promising to bleak overnight.