Feeling acute economic pain during COVID-19 crisis...

Feeling acute economic pain during COVID-19 crisis, many Detroiters think they’ll be broke by summer

Still, they say keeping people at home is a necessary policy response, according to a University of Michigan survey.

money problems in detroit

Detroit’s kids may be less likely to get the coronavirus, but they’re more likely to live in households that have suffered a job loss during the pandemic. That’s according to survey data released Monday by the University of Michigan Detroit Metro Area Communities Study.

“These economic consequences are going to have intergenerational impacts,” study supervisor and Gerald R. Ford School of Public Policy professor Jeffrey Morenoff told Detour Detroit. 

The study, now in its seventh iteration, has regularly polled a representative sample of approximately 1,800 city residents. The latest poll got 1,020 responses between March 31 and April 9 and revealed that: 

Roughly 1 in 5 Detroiters say they will definitely run out of money in the next three months — about half say it’s more likely than not.

35% of Detroiters employed full-time or part-time before March 1 say they lost their jobs as a result of the pandemic.

43% of those who lost their job due to the pandemic say they are certain they will run out of money in three months.

42% of Detroiters say they would be unable to afford a $400 emergency expense.

Lydia Wileden, a doctoral candidate at U-M who analyzed the DMACS COVID-19 survey data, said she was surprised to discover that about 40% of Detroiters report that they’re spending more during this pandemic. Around 46% of Detroiters say they’re spending less.

“One thing that jumps out is that people who are concerned about access to material goods report that they’re spending more — people who are worried about having a place to live, about access to food and other supplies, and about access to medication, we actually see that those respondents say that they’ve been spending more during the pandemic,” Wileden told Detour Detroit in an email.

“One hypothesis is that people are spending more because they feel like they have a need to stockpile, that amenities are going to be difficult to find in the future,” Wileden continued. “I think a major aspect of what’s happening is that people with more flexible income have a lot more ability to alter their financial behaviors.”  

The survey found that 60% of residents who make more than $50,000 say they’re spending less.

The top policy responses preferred by survey respondents include ordering people to stay home, sending cash assistance to families and ensuring access to health care.

Detroit Mayor Mike Duggan announced Monday that $8 million from the CARES Act, or federal coronavirus relief fund, will be made available to low-income Detroiters via the Wayne Metro Community Action Agency. Funds will be made available for food assistance, utility payments and funeral assistance to eligible households.

DMACS plans to continue releasing data throughout the pandemic with an eye on how households are able to pay basic bills including food and utilities.

Correction: We made an error in reporting the amount that will be made available from the federal CARES act through Wayne Metro Community Action Agency for low-income households in Detroit. That number is $8 million, not $8 billion, out of $11 million earmarked for Wayne County.

Find more COVID-19 news updates that affect Detroit here.