Super
Bowl Sunday is a holiday in America, and with that, comes tons of presents
thrown our way: new commercials! While
many of the commercials were silly, or played off the most recent trends in pop
culture to date, other commercials attempted a more serious edge. The one that caught America’s and my own eyes
in particular was the Chrysler “It’s Halftime America”, featuring Clint
Eastwood. The commercial is commentated
by Eastwood to tell the same tale of Detroit’s struggles through the Great
Recession, and how Detroit along with all of America is ready to push forward and
“play the second half” (a.k.a. bring the economy back to what it should
be). Check it out:
As I watched this commercial, I
believed the greatness of the marketing that Chrysler has managed to capture in
recent years during Super Bowls, but as a budding economist, I am skeptical of
the tale Eastwood speaks.
Let’s
first look applaud the tremendous decrease in the unemployment rate in the
Detroit Region. As you can see below, the
unemployment rate once reached as high as 16.6% in July 2009, and now stands
around 9.6% (Bloomberg). The numbers are
truly incredible, and for that, I will state I never imagined Detroit would
return to a level hovering around the average national unemployment rate.
All seems to be heading in the right direction, but could the drop in the unemployment rate in Detroit and surrounding areas be too good to
be true?
But
a bigger question needs to be asked: what caused the improvement in the Detroit
economy? Well, surely we can look at whom
else but Chrysler, the company responsible for such a powerful ad at America’s
largest sporting event. What the
commercial proclaims is that Detroit is now up and running thanks to the power
of manufacturing in the Motor City.
After looking at the statistics over recent months, I was hardly
impressed by the standards being set by the large corporation.
The
manufacturing employment has certainly gone up in the past year, but the growth
rate just doesn’t seem to reach the acclaimed values Chrysler holds for the
Motor City.
While
we can see from FRED that the manufacturing employment in the Detroit area has
increased since the plummet over the past decade, the growth level is nowhere
near what it should be to see a significant effect that could turn Detroit into
the once booming metropolis. In fact, I
would argue that Detroit will never get to this point again.
What
I mainly want to point out was the data found in the US Census Bureau last
March. Over the past decade, 25% of
Detroit’s population left the Motor City.
At 713,777, the population was the lowest since the 1910 census (CNN). As stated above, the peak of unemployment in
Detroit occurred around July 2009. Since
then, there has been a consistent drop in the unemployment rate.
After
seeing the marginal growth in manufacturing employment, I believe the main
cause for the drop in unemployment is heavily skewed by people moving away from
Detroit, especially in the last couple years, and a high amount of people who
dropped out of the unemployment rate candidacy.
The
city of Detroit has been in an uphill battle for over a decade. Due to poor job growth, the dying
manufacturing industry, and many poor policy decisions (that can be discussed
on another day), Detroit is still beaten up and bruised far beyond a
multi-million commercial can explain.
Perhaps
Clint Eastwood has me pinned. I haven’t
seen the Motor City that he knows and sees.
But the truth is that the growth just isn’t there for Detroit and the
manufacturing industry in America. The
bounce back, while noticeable, isn’t showing signs to bring the once flourishing
economy back to the Motor City.
For
those ready to see some touchdowns scored in the second half of the game this
year, please don’t be too disappointed, Madonna and Cee-Lo are still lip-synching
on stage.
References:
- “Chrysler Super Bowl Commercial”. http://www.youtube.com/watch?v=tFAiqxm1FDA
- “Detroit Loses a Staggering 25% of its Population in a Decade”. CNN. http://articles.cnn.com/2011-03-22/us/michigan.detroit.population_1_census-figures-mayor-dave-bing-undercounting?_s=PM:US
- “Eastwood Heralds Detroit’s Revival in Chrysler Super Bowl Ad”. Bloomberg. http://www.businessweek.com/news/2012-02-06/eastwood-heralds-detroit-s-revival-in-chrysler-super-bowl-ad.html
- Manufacturing Employment in Detoit-Warren-Livonia, MI. FRED. http://research.stlouisfed.org/fred2/series/DETR826MFGN
- Unemployment Rate in Detroit-Warren-Livonia, MI. FRED. http://research.stlouisfed.org/fred2/series/DETR826URN
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