The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit

Saddled with $18 billion in debt, Detroit filed for Chapter 9 bankruptcy protection in federal court on July 17, 2013 (Davy, Monica, and Mary Williams Walsh. “Billions in Debt, Detroit Tumbles into Insolvency.” The New York Times, 2013). This catastrophe was long in the making. In The Origins of the Urban Crisis, Sugrue argues that Detroit’s decline originated between 1940 and 1960, a period of deindustrialization and systemic racism in labor and housing. Unemployment soared as manufacturing plants relocated to more affordable parts of the country after World War II, hitting the city’s struggling Black population particularly hard. Swaths of the city were condemned as “blighted,” while growing inequality increasingly divided residential areas along class and racial lines. Sugrue ends his 1996 study on a pessimistic note:

The rehabilitation of Detroit and other major American cities will require a more vigorous attempt to grapple with the enduring effects of the postwar transformation of the city, and creative responses, piece by piece, to the interconnected forces of race, residence, discrimination, and industrial decline, the consequences of a troubled and still unresolved past (271).

Detroit’s bankruptcy is a grim postscript to The Origins of the Urban Crisis. Sugrue emphasizes the long historical processes that shaped Detroit, an approach that helps contextualize the city’s recent bankruptcy. Right-wing observers blame Detroit’s insolvency on high union wages and pensions, political corruption, and fiscal mismanagement. However, Sugrue argues that understanding the city’s fiscal problems requires adopting the long-term view he advances in his book. Postwar industrial flight eroded the city’s tax base, dramatically reducing its revenues. Late 20th-century trade policies, such as the 1989 North American Free Trade Agreement (NAFTA), further stripped city coffers by encouraging industries to move abroad (“Michigan Job Loss During the NAFTA-WTQ Period.” Public Citizen, 2019). The austerity measures implemented in response to the fiscal crisis led to the cutting of public-sector jobs in healthcare, education, and other formerly stable industries, threatening an already precarious labor market. The situation worsened when Michigan’s Republican leaders cut state funding to various urban programs. Detroit’s mayor called for federal aid, only to be rebuffed by Republicans wary of bailouts after the 2008 financial crisis and the ensuing global recession. Detroit’s bankruptcy was the culmination of decades of commercial decline, job loss, depopulation, property decline, disinvestment, and trade and fiscal policies. The city shed approximately $7 billion in debt after exiting bankruptcy (Klinefelter, Quinn. “Detroit’s Big Comeback: Out of Bankruptcy, a Rebirth.” NPR, 2018). Five years later, revitalization efforts began in the downtown core with the construction of commercial and residential structures. These efforts, however, were sidetracked in 2020 with the outbreak of the COVID-19 pandemic.