Economic decay peels shine off Motor City

DETROIT - Try telling Brother Jerry Smith that the recession in America has ended.

As scores of people queued up last week at the soup kitchen which the Capuchin friar helps run in Detroit, the celebrations on Wall Street in New York seemed from another world.

The hungry and needy come from miles around to get a free, healthy meal.

Though the East Detroit neighbourhood the soup kitchen serves has had it tough for decades, the recession has seen almost any hope for anyone getting a job evaporate.

Neither is there any sign that jobs might come back soon.

"Some in the past have had jobs here, but now there is nothing available to people. Nothing at all," Brother Jerry said as he sat behind a desk with a computer but dressed in the simple brown robes of his order.

This is an area where times are so tough that the soup kitchen is a major employer for the neighbourhood, keeping its own staff out of poverty. But now Brother Jerry fears he may have to start laying people off.

Officially, America is on the up. The economy grew by 3.5 per cent in the past quarter. On Wall Street, stocks are rising again. The banks - rescued wholesale by taxpayers' money last year - are posting billions of dollars of profits.

The financial sector is lobbying successfully against government attempts to regulate it. The wealthy are beginning to buy property again, pushing prices up. In New York's fashionable West Village a senior banker recently splurged US$10 million ($13.8 million) on a single apartment.

But for tens of millions of Americans such things seem irrelevant.

Across the country layoffs are continuing. Unemployment in America stands at 9.8 per cent. But that headline figure, massaged by bureaucrats, does not include many categories of the jobless. A broader official measure, which includes the long-term jobless who have given up job-seeking and workers who can only find piecemeal part-time work, stands at 17 per cent.

Added to that shocking statistic are the millions of Americans who remain at risk of having the bank repossess their home.

Real wages in the US stagnated in the 1970s and have barely risen since, despite rising living costs.

The gap between the average American worker and high-paid chief executives has widened and widened. The richest 1 per cent of Americans have more financial wealth than the bottom 95 per cent.

It seems the American hope of a steady job, producing rising income and a home in the suburbs, has evaporated for many. A generation of aspiring middle-class homeowners has been wiped out by the recession.

"Poor people just don't have the political clout to lobby and get what they need in the way Wall Street does," said Brother Jerry.

There is little doubt that Detroit is ground zero for the parts of America that are still suffering. The city that was once one of the wealthiest in America is a decrepit, often surreal landscape of urban decline.

The birthplace of the American car industry, it boasted factories that produced cars shipped around the globe.

Its downtown was studded with architectural gems, and by the 1950s it boasted the highest median income and highest rate of home ownership of any major American city. Culturally it gave birth to Motown Records, named in homage to Detroit's status as "Motor City".

Decades of white flight, coupled with the collapse of its manufacturing base, especially in its car industry, have brought the city to its knees. Half a century ago it was still dubbed the "arsenal of democracy" and boasted almost two million citizens, making it the fourth-largest in America. Now that number has shrunk to 900,000.

Its once proud suburbs now contain row after row of burned-out houses.

Empty factories and apartment buildings haunt the landscape, stripped bare by scavengers. Now almost a third of Detroit - covering a swath of land the size of San Francisco - has been abandoned. Tall grasses, shrubs and urban farms have sprung up in what were once stalwart working-class suburbs. Even downtown, one ruined skyscraper sprouts a pair of trees growing from the rubble.

The city has a jobless rate of 29 per cent. The average house price in Detroit is only US$7500 with many homes available for only a few hundred dollars. Not that anyone is buying. At a recent auction of 9000 confiscated city houses, only a fifth found buyers.

The city has become such a byword for decline that Time magazine bought a house and set up a reporting team there to cover the city's struggles for a year. There has been no shortage of grim news for its "Assignment Detroit" bureau to get their teeth into.

Recently a semi-riot broke out when the city government offered help in paying utility bills. Incredibly, despite such need, things are getting worse. Detroit is now US$300 million in debt and is cutting many of its beleaguered services, such as transport and street lighting.

The brutal truth, some experts say, is that Detroit is being left behind - and it is not alone. In cities across America a collapsed manufacturing base has been further damaged by the recession, creating an underclass. Former Detroit car-worker and union official turned social activist Richard Feldman sees disaster across the country.

"We are going to have to face the end of the industrial age," Feldman said.

"This didn't just happen last October either. It's been happening here in Detroit since the 1980s. Detroit just got it first, but it could happen anywhere now."

The busy highway of Eight Mile Rd marks the border between the city of Detroit and its suburbs.

On one side stretches the city proper with its mainly black population; on the other stretches the progressively more wealthy and more white suburbs of Oakland County. Repossessions have spread like a rash down the streets of Oakland's communities. Feldman recently took a tour down Eight Mile Road and was shocked by what he saw: "I went door-to-door north and south of Eight Mile and I could not tell the difference any more. I did not believe it until I saw it."

Professor Robin Boyle, an urban planning expert at Detroit's Wayne State University, believes the real impact of the recession will continue to be felt in those suburbs for years to come.

For decades they stood as a bulwark against the poverty of the city, ringing it like a doughnut of prosperity, with decrepit inner Detroit as the hole at its centre.

"Recovery is going to take a generation," he said. "The doughnut itself is sick now. But what do you think that means for the poor people who live in the hole?"

Mark Covington was born and raised in Detroit. Laid off from his job as an environmental engineer, Covington found himself with nothing to do. So he set about cleaning up his Georgia St neighbourhood.

He cleared the rubble where a bakery had once stood and planted a garden. He invited his neighbours to pick the crops for free, to help put food on their plates.

Friends built an outdoor screen of white-painted boards to show local children a movie each Saturday night

Local youths, practised in vandalism and the destruction of abandoned buildings, have not touched his gardens.

People flock to the movie nights, harvest dinners and street parties Covington holds. Inspired, he scraped together enough cash to buy a derelict shop and an abandoned house opposite his first garden.

He wants to reopen the shop and turn the house into a community centre. To do it, he needs a grant. Or a cheap bank loan. Or a job.

It is hard not to compare Covington's struggle for cash to the vast bailout of America's financial industry.

"We just can't get a loan to help us out. The banks are not lending," he said.

He does not seem bitter. But he does wonder why it seems so easy in modern America for those who already have a lot to get much more, while those who have least are forgotten.

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