Weaknesses

Racial tension
Detroits economic decline was worsened by longstanding racial tensions between
blacks and whites. As the wealthier white population left Detroit following the shift of
the Big Three, the overall population shrank and the citys tax base shrank, too,
leaving Detroit less able to support public schools, public safety, and its huge,
geographically spread-out infrastructure. White Detroiters followed the auto industry
out of the city because the good jobs moved there, and land was plentiful in the
suburbs. Besides, housing and schools were newly built, and they wanted to get away
from their black neighbours and buy homes in the racially segregated suburbs (Reese
& Sands, 2013). When overcrowding and immigration of blacks threatened the racial
segregation of the neighbourhood in Detroit, whites picked up and left, turning Detroit
from a wealthy white city into a desperately poor black city.
Heavy Debts
To finance growing budget deficits and to pay for infrastructure repairs, Detroit
borrowed heavily. By the end of year 2005, the total debt owed by Detroit had grown
to $7.4 billion. In July 2013, with Detroits major industry struggling and the massive
debt owed to city workers pension funds and municipal bondholders stifling
economic growth, Detroit was forced to file Chapter 9 bankruptcy (Rice, 2015).
Detroit is insolvent due to long-term problems that have been festering for decades,
which is a combination of long-term economic decline, years of financial
mismanagement, and the simply unaffordable massive unfunded pension liabilities
($3.5 billion) and unfunded retiree healthcare promises (nearly $6 billion). Due to
Detroits long-term financial mismanagement and the unfunded retiree benefits,

Detroits total debt and long-term obligations are estimated to be at least $18 billion,
which is more than seven times larger than Detroits total municipal budget of
approximately $2.5 billion (Winegarden, 2014). Debts and long-term liabilities have
accumulated such that the city government was in deep crisis.
High Unemployment Rate
Following the shift of the Big Three away from Detroit, reductions in the city
workforce have been severe (Reese & Sands, 2013). The auto factories shaped
Detroits culture and population. Ford Motor Company was the first company to start
advertising assembly-line jobs in 1914. By 1925, there were thirty-seven car factories
in Detroit (Rice, 2015). They provide the most job opportunities to the residents in
Detroit throughout the years. However, as the Big Three moved outside of Detroit, the
unemployment rate rose tremendously. Unemployment rate then led to the decline in
income tax revenues of the city.
Crime
With the rise of unemployment rate, rate of crime in Detroit also increases (Reese &
Sands, 2013). In year 2011, 136,000 crimes were reported in the city. Of these, 15,245
were violent crimes. In year 2012, the citys violent crime rate was five times the
national average and the highest of any city with a population in excess of 200,000.
Blighted and vacant lots resulting from migration encourages crime even more
(Hadden, 2013). One-third of the citys building is found to be blighted, which
appears to be a safety risk to the remaining residents.

References
Hadden, J. (2013). Crime remains Detroit's biggest enemy. Detroit News, June 19,
2013.
Reese, L. A. & Sands, G. (2013). No easy way out: Detroits financial and
governance crises. Interrogating Urban Crises Conference De Monfort University
Leicester, England September, 2013.
Rice, A. M. (2015). Investing in detroit: Automobiles, bankruptcy, and the future of
municipal bonds. The Georgetown Law Journal, 103: 1335-1358.
Winegarden, W. H. (2014). Going broke one city at a time: Municipal bankruptcies in
America. USA: Pacific Research Institute.