Study: Wayne County Pandemic Recovery Strong, But Still Facing Inequalities

According to results of a study conducted by the University of Michigan’s Research Seminar in Quantitative Economics, Wayne County is expected to recover from its pre-pandemic payroll jobs count by the end of 2023, which is somewhat stronger than Michigan as a whole.
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downtown detroit skyline
Results of a study conducted by the U-M Research Seminar in Quantitative Economics showed Wayne County’s recovery from the pandemic is ahead of surrounding areas, but faces inequalities. // Stock Photo

According to results of a study conducted by the University of Michigan’s Research Seminar in Quantitative Economics, Wayne County is expected to recover from its pre-pandemic payroll jobs count by the end of 2023, which is somewhat stronger than Michigan as a whole.

The economic comeback varies widely depending on the kinds of jobs and between the county’s affluent suburbs and the city of Detroit. As of July, the county’s jobless rate had fallen to 4.5 percent, representing a near 90 percent recovery of the pandemic-induced job losses.

“A strong economy and tight labor market tend to reduce economic disparities by boosting the prospects of lower-income workers,” says Gabriel Ehrlich, director of U-M’s RSQE. “We hope that the economic recovery we are forecasting for Wayne County will eventually lead to more broadly shared prosperity in the county, although there are challenges in the near term.”

Researchers say the strong recovery relative to surrounding areas is driven by the end of pandemic restrictions on the service economy, significant federal income support, rising personal comfort levels, and the reopening of schools for in person instruction. They also expect that Detroit will resume its promising trajectory from before the pandemic.

The Wayne County Economic Outlook for 2021-2023 shows that the outlook for finance and insurance, transportation equipment manufacturing, and transportation and warehousing industries have a particular optimism.

Researchers say average inflation-adjusted wages in the county jumped approximately 7 percent in 2020, as more low-wage workers lost their jobs than those who held high-wage jobs. That number is expected to drop this year and hold flat as more low-wage workers return to jobs.

Real wage growth is the strongest in lower-educational attainment services sector, forecast to jump 11 percent from 2019 to 2023. Real wage growth in the higher education attainment services sector is expected to grow by 6 percent. Blue-collar industries have the most negative forecast, with real wages expected to drop 2 percent.

The researchers fear that income inequality will rise after the pandemic due to high-wage industries being forecasted to see much faster growth than low-wage industries. They also noted a geographical disparity within the county when looking at average annual household incomes adjusted for cost of living and household size.

In 2019, incomes in Detroit averaged $59,400 for a three-person household and $101,000 in the rest of the county. By comparison, Plymouth and Canton townships had an average three-person household income of $148,000.

Divides also emerge among racial and ethnic groups. Black and Hispanic residents are less than half as likely as non-Hispanic white residents to live in households researchers classify as higher income, and they are nearly twice as likely to live in households classified as lower income.

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