What happened to Detroit?

Detroit's bankruptcy has been one of the most significant news of this summer. The municipality owes around 20,000 million dollars to around 100,000 creditors

For every dollar the municipality collects, 38 cents are destined to pay the big debt created as a result of the municipal bonds sold to face the expenses of the city. In four years they will have to use 65 cents of each dollar to pay the debt. But how did Detroit get into such a big debt?

There are several reasons: one part of the debt comes from corruption cases. Detroit’s former mayor Kwame Kilpatrick, who ruled from 2002 to 2008, was sentenced to jail for corruption, racketeering, bribery, extortion, tax evasion and fraud. But the main reason for Detroit’s bankruptcy comes from the decline of its economy.  In the 1950s Detroit was the 4^th city of the USA. It reached 2 million inhabitants and was worldly known as Motor City, because of the concentration of automotive industries in the area: Ford, General Motors, Chrysler and a lot of auxiliary industries.  When these big companies started moving production to other parts of the world in the 1970s, unemployment started to increase. Many other companies had to close, as a consequence of the purchasing power reduction and the city started losing population. Detroit has lost around 60% of its population since the 50s. At the moment the inhabitants are around 700,000, 80% of which are black. The unemployment rate is 18.3%, double than the USA rate.

The decline of economic activity and the loss of population have resulted in a reduction of the public incomes. The municipality collects less taxes and has less money to provide public services. Many public buildings have been abandoned:  schools, stations, theaters, concert halls, libraries…Images of public buildings decay and the deterioration of infrastructures show the sad face of past full of life places.

Former school

Former public library

Former police station

Packard Motors Plant

Source of the pictures: The Ruins of Detroit, photo exhibition by Yves Marchand and Romain Meffre: 

http://www.marchandmeffre.com/detroit/index.html

The city’s economic difficulties also affect the inhabitants’ ordinary life. The municipality doesn’t have money for ambulances, police agents or fire workers. The average time of response of the emergency services is 58 minutes. Criminality and insecurity have grown and Detroit is considered to be the most dangerous city in the USA.

The financial situation of the city is so extreme that the emergency manager in charge of reducing the debt of the city has ordered an evaluation of the 60,000 works of art the public museums of the city own. In fact, all the properties of the city are being assessed to know their economic value and put them "in the market". 

http://www.reuters.com/article/2013/08/08/us-usa-detroit-artmuseum-idUSBRE97701F20130808

http://tv.msnbc.com/2013/08/12/would-paris-sell-the-mona-lisa-new-fears-that-detroit-will-sell-its-treasures/

The situation is awful, but there are still some initiatives to start recovering the city, like The Greening of Detroit. 

If you want to learn more about Detroit's decline, read the following link: 

http://en.wikipedia.org/wiki/Decline_of_Detroit#1950s_to_1960s_freeway_construction

  

Some more information about outsourcing

Checking the labels of our clothes, we´ve discovered today that many of the textiles sold in Spain have been produced in other countries. Many companies have outsourced their factories to places such as Bangladesh, Indonesia, India, China, Turkey, Thailand, Philippines, Pakistan or Mexico. Here you have some cartoons that show the reality of globalization in industry: 

The first cartoon shows how the theory of capitalism can affect to the same people who are its main supporters: 

This cartoon plays with a very know quote in the USA: it used to be "What´s good for General Motors (the car company) is good for America".

This one shows the dilemma of many Mexican workers: 

The executive of this cartoon justifies outsourcing as a good thing for American citizens: 

This one shows the reality of many companies of the developed countries: their workers live in other countries. 

And the last one is focused on consumers. 

Source of all the images: http://www.davar.net/IT/CARTOONS.HTM

The truth is that the high consumption levels of the most developed countries are only possible because many of the goods we enjoy come from countries where the working conditions and the rights of workers are not respected. If you´re interested in this topic, you can watch the following video about working conditions on the sweatshops in Bangladesh: 

http://www.youtube.com/watch?v=8Bhodyt4fmU&feature=related

And if you want to take action, this is the link to the Playfair 2012 Campaign. This is an international campaign  whose purpose is to put pressure on the sport companies that produce sportwear in outsourced factories in Asia. You can send an e-mail to the major companies and ask them to respect the rights of their workers: 

http://www.playfair2012.org.uk/

You can also play the game "Unfair factory" and learn how´s a workday in the sweatshops: 

http://www.playfair2012.org.uk/game/