Chapter 1:Detroit was once the richest city in America, what happened and why?

Detroit, in the 1950s, was THE richest city in the US, and some say it was the richest city in the world. So how is it is that from being the richest city Detroit is now one of the poorest cities?

1. White flight: In the 50s it was 84% white and highly segregated. In the 1940s the whites in the city even built a wall to separate the blacks and the whites. The city was redlined and blacks and whites lived segregated lives. When the blacks from the south started to migrate up to Detroit, the blacks were cramped into tighter and tighter quarters. After the passage of the Civil Rights Bill the blacks wanted more power over city governance and there was a continuing power struggle between the blacks and the whites. Coleman Young became the first black mayor in 1974. The 1967 Riots and the election of Coleman Young accelerate the white flight out of the city. Today Detroit is approx. 80% black.

With the whites went wealth, the income base, and the jobs. Even the blacks who had made it to the middle class left for the suburbs. Those left behind in Detroit were the least well educated and the poorest. (

The riot’s carnage focused a spotlight on the city’s problems beyond race and police-community relations, and put an almost immediate end to the heroic narrative of the can-do car capital. As violence flared and the hemorrhaging of people and jobs continued into the 1970s, a new national storyline about Detroit gradually developed — that of an urban dystopia — and in popular culture, the once-proclaimed “Arsenal of Democracy” took on a number of derisive nicknames: “America’s first Third World city,” Beirut, Baghdad, Bosnia, Chernobyl, and Murder City. “Will the last person in Detroit please turn off the lights?” went a national saying in that era. (

2. Jobs: Starting in the 70s to the 90s there was a sharp decline in automotive production. Factory jobs were the path to the middle class for the poor, especially the blacks, and these jobs disappeared. Detroit did not plan ahead with investments in other industries to replace the jobs the city was losing. Thus there were fewer and fewer jobs to be had in Detroit. Unemployment increased and Detroit became an impoverished city with the highest poverty rate in the country.

3. Declining tax base: With a sharp decline in the tax base there was little money to go around for education, city repair, policing. The diminished tax base could not support a flourishing retail sector. Stores shut down. Urban blight followed.

Detroit at its peak had 1.8 million residents. A million of these residents left. Leaving behind empty homes, empty structures, and spaces. The city did not have the money for the upkeep of these properties and spaces. Urban blight was the result.

4. Drugs and guns: With few jobs, a poor education system, and unemployment reaching 40%, the youth in Detroit had no prospects for regular jobs, they turned to drugs as a business (free enterprise). Most of their customers were whites from the surrounding suburbs. Drugs were a lucrative business and rival gangs formed. The gangs had easy access to guns and the gang wars began. The drug trade went from heroin to crack cocaine.

Most of the violent crimes were black on black.

5. Ghettos: Many areas of Detroit are like ghettos now. The poverty level in these areas is higher than 40% and the unemployment rate is close to 60%. little education, have no social skills necessary for being assimilated into “normal” society, they are trapped in this culture. Detroit has lost two generations of youth to this culture.

(Sixty percent (60%) of all of Detroit’s children are living in poverty. Fifty percent of the population has been reported to be functionally illiterate. Thirty-three percent (33%) of Detroit’s 140 square miles is vacant or derelict. Eighteen percent (18%) of the population is unemployed. And 10.6% of Detroit’s 713,777 residents, according to the 2010 U.S. Census, considered themselves white.)

6. Policing: After 1967, Detroit police engaged in several well-publicized violent encounters with black citizens that further raised the racial temperature in the city.

In 1971 the Detroit police unveiled its newest crime-fighting tool — the STRESS unit, an undercover decoy operation, Stop the Robberies, Enjoy Safe Streets. Within months, STRESS officers had killed 10 suspects; nine were black, and critics called it an “assassination squad.”

In December 1972, three young black Detroiters, described by supporters as anti-dope vigilantes, wounded STRESS officers in a wild shootout. Three weeks later, amid an intensive and wildly divisive manhunt, STRESS cops encountered the three suspects and exchanged shots again. This time, one Detroit cop was killed and another was left paralyzed. Police Commissioner John Nichols called the suspects “mad dog killers,” and police kicked in doors across black Detroit. Innocent citizens died in the police dragnets, and tensions between the police department and the black community reached the breaking point. (Echos of today).

7. Laws and their unintended consequence: It all started in 1934, when the Federal Housing Administration (FHA) was founded. The FHA signed into law the process of “redlining,” the act of denying loans and financial services to black neighborhoods while granting them for white neighborhoods. This widened the economic gap between races to a whole new level. Blacks were denied the opportunity to build wealth through homeownership, a big part of the wealth accumulation of the middle-class whites in Detroit.

The neighborhood of Wyoming was a redlined black neighborhood for nearly a decade until the early 1940s when developers wanted to build a white development in the area. They were denied by the FHA because their plan placed the white neighborhood “too close” to the black neighborhood.

Thinking quickly, the developers responded by building a half-mile long wall directly in between Mendota Street and Birwood Avenue for a full three blocks. This was enough to be given the nod of approval from the U.S. government. The wall was the official racial divider for over 20 years until the Fair Housing Act abolished such racist policies in 1968.



8. Power Struggle: The transfer of power from a “white” Detroit to a “black” Detroit was fraught with power struggle. The city suffered while the white and black leaders fought for power. Blacks were led by charismatic leaders such as Cockrell (a Marxist) who was interested in radical policies and less in governing. In 1974 Coleman Young became the first black mayor. He had no illusion about the city he was left to run.“I was taking over the administration of Detroit because the white people didn’t want the damn thing anymore,”

The election of a black man as mayor of Detroit was the final straw for many white Detroiters, though clearly not everyone who moved to the suburbs did so because of the new mayor. In 2010, the census showed 55,604 whites remaining out of a population of 713,777, which continues to drop, though at a much slower pace than previously. In 1950, Detroit had 1.5 million white residents out of a total population of about 1.85 million.


9. Two generations of blacks born into abject poverty: Blacks born in the 1970s and 1990s were born into abject poverty. Poverty the likes of which few Americans can envision. They lived in squalor, had no access to education, were undernourished, grew up in broken families, where typically one parent was in jail, there were drugs and gangs on their streets, they were surrounded by violence, feared for their lives, and their life expectancy “Wayne County had the lowest life span for a poor 40-year-old — 77 years — among the nation’s largest 100 counties, according to the Health Inequality Project, a study published in the Journal of the American Medical Association in April. The Metro Detroit area also ranked at the bottom — 95 out of 100 — for the life spans of its poor, which was nearly 78 years.”


No other American city has seen such a radical shift as Detroit from once an all-white city to an all-black city. The graph below shows the population shift over time.

There are many views on why Detroit is where it is, Scott Martelle the author of “Detroit: A Biography” takes apart the five myths on what caused the decline of this once great city

Detroit has one of the highest crime rates in America, it is often called the murder capital of America. It was a thriving metropolis in the 1950s

How from its heydays could a city like Detroit fall so far? What are the root causes behind Detroit’s descent into poverty and crime? Are there lessons to be learned for other inner cities? These topics will be covered in the next post.



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sunil mehrotra

entrepreneur;CEO, strategist;thinker-doer;left brain/right brain;