Unemployment application

Question 1

Detroit and structural unemployment

Answer 1

Detroit was once the heart of the U.S. car manufacturing industry, home to the “Big Three”: Ford, General Motors, and Chrysler.

As globalisation increased, car production became cheaper overseas due to lower wages and fewer regulations. Manufacturing jobs moved abroad, and companies began outsourcing.

Technological change also played a role, as automation reduced the need for human labour on production lines.

This caused a sharp decline in demand for low-skilled, manual labour in Detroit — a workforce heavily dependent on those types of jobs. Workers couldn’t easily transition to jobs in growing sectors like tech or healthcare.

Many people became structurally unemployed because their skills were no longer useful in the modern economy, and retraining programs were limited or ineffective.

Question 2

Economic consequences of detroits structural unemployment problem

Answer 2

Economic Consequences:
High long-term unemployment

Increased poverty and crime rates

Population decline (Detroit’s population dropped from 1.8 million in the 1950s to under 700,000)

Urban decay and underinvestment