A crane looms over downtown Detroit, building the city’s first skyscraper in decades: a new headquarters for GM and a five-star hotel.
There’s a two-year-old Gucci store nearby, and up the street, Mootz has added more space for customers willing to spend nearly $30 on a pizza. “Every year, everything gets better and better,” said restaurant owner Tony Sacco, speaking of the area’s revival.
The redevelopment of Detroit, once the world’s auto manufacturing capital, is attracting more people to a city that is redefining itself. “We’re making sure people outside of this region understand how far Detroit has come,” said Eric Larson, executive director of the Downtown Detroit Partnership. “It’s not just about music or engines anymore.”
The atmosphere is different a short drive away, among abandoned land and frame homes, or even farther from downtown, in the Macomb County suburbs, where a squeezed middle class worries about high costs of living.
The discrepancy between rich and poor areas is familiar throughout the United States, and it is a problem for President Joe Biden, who puts the economy at the center of his campaign to defeat Donald Trump again in this year’s race for the White House. .
“Every year, things get better and better,” Tony Sacco, owner of Mootz restaurant, says of downtown Detroit’s rise Steve Koss/FT
Steve Koss/FT
The U.S. economy has boomed under the Biden administration, fueled by buoyant consumer spending, according to federal data. But the benefits have often boosted the richest, and the increase has depended on the richest consumers, a disparity that complicates Biden’s pitch to the blue-collar voters he needs in swing states like Michigan.
Despite growth in the United States that has surpassed that of any other advanced nation, generating near-record unemployment and a soaring stock market, voters still say they trust Trump’s handling of the economy more than they do. Biden’s.
For all of Biden’s promises to rejuvenate America’s rust belt (through broad subsidies for new clean-tech manufacturing and sharp increases in tariffs on cheap goods from China), polls still show Trump leading in Michigan, a state that won in 2016 but lost in 2020.
The state is “very much in play” in the November election, said Chris Vitale, Macomb’s St Clair Shores City Councilman.
It means Biden, whose stance on Israel’s war in Gaza has angered many Arab-American voters in the state, is likely to rely on support from Detroit’s wealthier suburbs.
In Oakland County’s prosperous cities, such as Birmingham and Bloomington Hills, anxieties about persistent inflation, high interest rates and the cost of living – central complaints in polls showing voters’ unease about the economy Biden) feel distant.
People in areas like Birmingham “don’t feel much about what’s going on,” said Matt Knio, founder of local artisan bakers Cannelle.
Cheryl Daskas, one of two sisters behind Tender, a stylish boutique in Birmingham with exclusive pieces from the world’s best designers, said its recent best-selling items had been designed by Dries Van Noten, the Belgian fashion icon. “They’re also the most expensive,” she said.
Cheryl Daskas, of Tender boutique in Birmingham, says her best-selling items are the most expensive Steve Koss/FT
Steve Koss/FT
These are pockets of the American economy driven by the spending of the country’s wealthiest citizens: people who have benefited from rising stock and housing market prices, and who got cheap 30-year mortgages before the Federal Reserve to increase borrowing costs.
Last year, Mercedes-Benz reported record U.S. demand for premium models like Maybachs and G-Wagons, despite declines in overall sales. LVMH spoke in April of “continued strength” from high-end clients. Companies as diverse as Delta Air Lines and L’Oréal have cited higher-than-average growth in their premium and luxury lines.
Matt Knio, founder of local artisan bakers Cannelle Steve Koss/FT
Steve Koss/FT
Although Democrats have focused their campaign on American workers, people who earn more than $100,000 a year are among the groups that most favor Biden’s handling of the economy.
Lower-income Americans are cutting budgets and straining credit lines. McDonald’s says American customers have turned to cheaper options to make ends meet, and the New York Federal Reserve has reported a rising number of credit card delinquencies.
Knio has also noticed that customers of his bakeries in less affluent areas reduce their spending. “We used to sell many dozen or two dozen. Now you won’t see those (orders) much,” he said. “You’ll see one or two pieces or, if they have kids, split them in half.”
Although federal data shows that US inflation has fallen sharply since reaching multi-decade highs in 2022, polls show that high prices remain a major source of financial stress for voters.
“Even stupid things like fast food are one and a half times what they used to be,” said Nelson Westrick, a Ford Motor Company worker who lives in Macomb. Unlike Oakland and Detroit’s Wayne County, Macomb voted for Trump in 2020. “Ordering a pizza for the family is a lot more expensive than it was. “We hardly go on vacation anymore because it is too expensive.”
The cost reduction is evident even in bustling downtown Detroit. Ashley Gilbert Winfrey, business development director at Lip Bar, said the makeup store had benefited from people avoiding designer products in favor of more affordable pick-me-up products.
“You come here for something that will be a little more specific. . . but you’re not going to spend all your coins,” he said from the company’s flagship store on Detroit’s Woodward Avenue.
Local Democrats are worried. Oakland Commissioner Dave Woodward predicted that Biden would win the county again in November, but warned that the economy was an issue.
“The recent high inflation was a global phenomenon. But when you go shopping for the week, you’re not thinking about something global. You’re thinking, ‘This is happening to me, here and now,’” she said. “Even if it’s much better, you still feel it.”
Theresa Rich, Mayor of Farmington Hills Steve Koss/FT
Ashley Gilbert Winfrey, head of business development at makeup store Lip Bar in Detroit Steve Koss/FT
Meanwhile, in an economy driven by wealthy consumers, some voters feel the system itself has been biased against them by decades of policies that began under former U.S. President Ronald Reagan, Woodward said.
“A promise was made to Americans that if they follow the rules, work their entire lives and stay out of trouble, they will have a chance at a secure retirement.”
Who Michiganders think benefits from Biden’s economy could decide the state in November.
Trump is taking advantage of the anxiety of the state’s auto workers, claiming that Biden’s re-election would lead to “a bloodbath” for the manufacturing industry and jobs. He has criticized Biden’s support for electric vehicles and promised to raise tariffs on cheaper imports. It is a speech designed for the tight middle sectors and those who feel alienated in the new economy.
Biden has also offered a protectionist message, imposing a 100 percent tariff on Chinese electric vehicles in a bid to protect the local industry. He also appeared on the picket line of an automakers’ union just before it won bumper pay increases. His landmark climate bill is designed to subsidize deeper reindustrialization in states like Michigan, sustaining the jobs boom since he took office.
“I worked at General Motors in human resources in 2008, when it was part of my job to be part of the team walking people out the door and not knowing if I would have a job at the end of any given day,” Theresa said. Rich, mayor of Farmington Hills, a suburb of Oakland. Now the local restaurants he visits are struggling to hire staff.
For some, April’s National Football League draft – when 775,000 people packed into downtown, pouring more money into the bars and restaurants that have benefited from the local franchise the Detroit Lions moved nearby – symbolized the strides Michigan’s economy has made.
Others saw it as another starting point for a region that built its success around Detroit’s preeminence as the world’s automobile capital.
“We used to be a manufacturing city and now we’re a service industrial city,” Vitale said. “I look at those big glamorous stadiums and see them as marks of failure. It’s not really something I accept. But I know what it is to give someone a job.”
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