The federal empowerment zone in Detroit was the subject of praise during Vice President Al Gore's visit to the city last week. The system of $100 million in federal grants and $250 million in tax breaks over the next decade is functioning right on track in pursuit of urban renewal. Jobs are beginning to return to the city's southwest side and many businesses are moving back into the city from the suburbs to take advantage of offered incentives. The empowerment zone also appears to be sparking residual effects: Other manufacturing interests in the area are hiring more workers and increasing output to keep up with new demands on area businesses. Most important, the presence of the federal government in Detroit has given new confidence to investors - a consortium of seven banks have, in two years alone, given $600 million in business loans to the area.
However, there are certain facts that statewide unemployment figures and huge federal grants have overshadowed. Namely, many areas of Detroit have unemployment rates up to seven times the state average and poverty rates close to 50 percent. The empowerment zone itself currently has 29-percent unemployment - and while federal monies will certainly help drive the figure down, the state is not doing much to help.
The economic health of the state is welded to the auto industry. The American auto industry is in the midst of a boom that only a few years ago would have seemed impossible - but it cannot last forever. The Engler administration has not taken advantage of the state's economic health for any long-term gain. With a strong industrial base, the Engler administration could increase tax revenues and build programs for education, job retraining and other safeguards that protect citizens from falling into poverty with every dip in the business cycle. Instead, the governor viciously cut into welfare, education and other social programs without considering replacing the old systems with other supplementary services. Certainly, the administration's tax cuts are friendly to business interests, but they are not a long-term solution to keeping jobs in Michigan; Engler has shown that he cannot cut taxes without drastically reducing services or incurring other repercussions.
The time has come for the Engler administration to stop showing wanton disregard for the underprivileged and to start addressing their needs. The state government must create programs that address the large proportion of urban poverty and unemployment. The problem will only get worse as more and more people are shuffled off the welfare rolls with no jobs to which they can turn. The state must take advantage of its current good fortune and look toward long-term solutions - such as job training and placement facilities for former welfare recipients - to sustain its economic viability.