Detroit Divided

4. The Detroit Labor Market: The Employers' Perspective

4 The Detroit Labor Market: The Employers' Perspective ANUMBER of major developments in Detroit's labor market adversely affected the employment and earnings of blacks, especially black men. The percentage of total employment accounted for by jobs in manufacturing-especially the automobile industry-and in blue-collar occupations has declined dramatically, while employment in the services and in white-collar occupations has grown rapidly. The percentage of total employment located in the city has also dropped off steeply in recent decades, even though most Mrican Americans continue to live there. These findings point to important changes taking place on the demand side of the labor market-that is, in the locations, characteristics, and behaviors of employers and jobs in metropolitan Detroit. To some extent, these changes are occurring everywhere in the United States, and have diminished the employment and earnings of less-educated workers, especially males, in all areas. But the decline in manufacturing jobs and in central-city employment appears to be far more dramatic in Detroit than in most other metropolises.1 These findings raise questions about the current demand for labor in the Detroit area. How do skills, race, and space interact on the demand side of the market? Have employers and jobs left the city and relocated to the suburbs even more rapidly than the population, thereby diminishing job opportunities for those who remain? If so, is this truer of some types of jobs than others? What kinds of jobs, and how many, are currently being filled that are available to less-skilled workers in either location? Do the differences in where whites and Mrican Americans live affect the kinds of employers they apply to and where they are hired? How do these factors affect the ability of employers in various locations to find workers whose skills they demand? This chapter presents data on the demand side of the Detroit labor market in the mid-1990s. First, we review the literature on recent changes in labor demand, and how they have affected the employment 107 DETROIT DIVIDED prospects of African Americans and other less-educated workers nationally . Next, we describe a survey recently administered to 800 employers in metropolitan Detroit. Findings are presented on the current characteristics of jobs and employers in Detroit, focusing on comparisons between firms and jobs located in the central city and those in the suburbs. We analyze overall job availability, the kinds of jobs in each location, and the skill needs of employers. We also consider the extent to which employers in each location receive applications from black job seekers and the extent to which they hire them. We document major imbalances on the demand side of the Detroit labor market, in terms of job location and availability by skill level. Given the patterns of where whites and blacks live and the attitudes that each group holds about the other (as laid out in chapter 8), as well as the generally lower levels of education and skill among black workers , the imbalances in labor demand imply major barriers in access to employment for black workers. These barriers contribute to the declining employment opportunities and low earnings of young and less-educated blacks. Findings from Previous Studies of Labor Demand What do we know about recent changes in labor demand, and how have they affected the employment and earnings of less-educated workers and blacksP Which changes are especially relevant for understanding the declining employment outcomes described in the last chapter? Among the major factors are the following: Deindustrialization The employment of African American men in Detroit was heavily concentrated in the manufacturing sector. In 1970, 140,000 African American men were employed in metropolitan Detroit: 52 percent of them worked in durable goods manufacturing, and 94 percent of those men had blue-collar jobs. This concentration was typical in many other metropolitan areas of the Midwest. Durable manufacturing is also a sector in which blacks have traditionally been paid relatively well, as have been other less-educated workers (Krueger and Summers 1987). In the 1970s, black men in manufacturing earned 16 percent more in annual earnings than black men employed in other sectors, so these were among the best jobs available to African Americans at that time. As employment in these sectors began to decline in the 1970s-a decline that accelerated in the 1980s and continues, though less dras108 THE DETROIT LABOR MARKET: THE EMPLOYERS' PERSPECTIVE tically, today...