Recent changes in the Detroit area's labor market have been among the most dramatic in the United States. Once a case study in post-industrial decline and urban decay, the region has been revitalized by a tech-driven renaissance. Big companies like Apple and Amazon have been investing in the area, sensing the potential for a tech nexus with much lower costs than Silicon Valley.
For in-person hourly workers, opportunities are growing apace. Pros on the Instawork platform are now earning an average of almost $17 per hour in the Detroit area, higher than the MIT Living Wage for single people without children. With lower prices than the national average, Detroit is again becoming an attractive destination for the American worker.
- Detroit's long-term economic recovery has been driven by an influx of new technology, especially in manufacturing but also in information-based industries
- While growth in manufacturing jobs had flattened immediately before the pandemic, employment in transportation and logistics continues to rise
- High pay relative to prices may help Detroit to resume its pre-pandemic population growth
The Detroit area's labor market has transformed itself over the past two decades, with substantial churn in employers but also renewed interest in the area's base of industrial workers. The new millennium began with hard times, however. After the American economy resumed strong growth in 2003, Detroit lagged behind until the Great Recession:
Coming out of the Great Recession, production in the Detroit area largely kept pace with the nation's overall growth rate until about 2016. By that time, the unemployment rate in Detroit had also fallen to about the same level as the national rate for the first time in 15 years:
This was a huge turnaround for the region. Indeed, after dropping for the decade prior to the Great Recession, employment in the Detroit area recovered strongly along with a slight uptick in population:
A return to manufacturing
One of the main drivers of the recovery in the Detroit job market was manufacturing. Though the area did not recoup all the jobs (or people) that it had lost in the previous decade, manufacturing made much stronger gains that service sectors like leisure and hospitality:
Neither sector has completely recovered to its pre-pandemic levels, however. One sector that has is transportation and warehousing. Unlike manufacturing, it had already surpassed its numbers from the early 2000s before the pandemic. Now employment exceeds even the pre-pandemic level by more than 5,000 jobs:
This is also one of the sectors where Instawork has booked the most shifts in the Detroit area during the past month, with an average hourly rate of $14.36, well above the minimum wage in the area. And there are many other roles on the Instawork platform with higher pay, pushing the overall average above $16 an hour:
The immediate outlook
Companies have leveraged Detroit's expertise in transportation and logistics to turn the area into an important hub. And even though employment in manufacturing is still a far cry from its level of two decades ago, the sector continues to be a critical part of the area's labor market. In each sector, an influx of technology via new and existing businesses has been at the heart of the trend.
This change has brought more white-collar jobs to the region, but in-person hourly workers are benefiting as well. After suffering more than most during the early days of the pandemic, workers in the Detroit area can look forward to a resumption of the favorable trends of the late 2010s.
These links offer more information:
These metrics, derived from data aggregated across the Instawork platform, compare the two weeks starting 9/8/2022 to the previous two weeks. To control for the overall growth of the Instawork marketplace, only shifts involving businesses that booked shifts in both periods are included:
- $0.25 rise in hourly pay
- 1.4% point rise in share of short-notice shifts
- 1.5 hours rise in hours per existing worker
Follow us to receive future briefings and data insights from our Economic Research team.