When Was Detroit the Richest City in America?

Detroit is Michigan’s largest city, with over 670,000 residents in a metropolitan area covering 142.89 square miles.

It’s known as an industrial river city and major cultural center with a rich history of music and sports.

Detroit, Michigan, was the richest city in America during the 1950s, thanks to a booming economy built on the automobile industry.

However, Detroit is now one of the poorest major cities in the U.S. due to decades of declining industry, jobs, and structural racism.

There is a lot more to know about Detroit, including its rich history and present-day poverty, so keep reading for all the details.

Was Detroit a rich city?

Henry Ford

In 1950, Detroit was America’s wealthiest city based on per capita income. The city’s rapid industrialization was led by automotive pioneers like Henry Ford, Walter Chrysler, and the Dodge Brothers, and as the auto industry grew, so did the city’s wealth.

Factories were needed to mass-produce auto parts, tires, and vehicles, while garages were also in high demand to service and fuel cars.

War material production companies and high-level auto industry executives also contributed to the rise of Detroit as a rich city.

Compared to New York City and other crowded cities, Detroit had more space for people to live and families to settle.

Motor City was seen as an attractive place to pursue the American dream of home ownership.

In the 1950s, Detroit’s population peaked at 1.8 million, with 200,000 people in manufacturing jobs.

While the postwar period of 1945 to 1970 saw the auto industry prosper, cracks appeared in the city’s culture and economic standing.

Motor City

As racial conflict and crime became more common, many wealthier white families started leaving Detroit, while systemic racism made it difficult for the predominantly black population to break the cycle of poverty.

Why is Detroit so poor now?

Although Detroit was once the richest city in America after the market revolution and industrialization, today it is the country’s second-poorest major city, edging out Cleveland and Dayton, Ohio.

After the big auto boom, the late 1900s saw Detroit fall into disarray with race riots and a mass exodus of industry jobs and the predominantly white upper-middle-class.

Drugs, gun violence, and poverty became synonymous with Detroit, which up until then had been a booming American city.

Detroit has a high rate of violence, which contributes to the poverty cycle as drugs and crime negatively impact the city and the prospects of many residents.

Generational poverty is an unfortunate reality for many families in Detroit, contributing to the big gap between the rich and the poor in this major Midwestern city.

Overall, there are many more factors that contributed to the decline of Detroit from America’s richest city to one of the poorest.

Detroit

These reasons include:

  • White flight
  • Discriminatory loan policies
  • Radical disinvestment
  • Lack of public support services
  • Public safety concerns
  • Blighted property
  • Dilapidated schools

What is the median household income in Detroit?

Detroit’s current median household income hovers around $34,000, far less than the national figure of $67,521.

While household income dropped during the Great Recession from December 2007 to June 2009, there has been a slow but steady increase in Detroit’s figures since then.

However, the city is still far behind other American metropolitan areas.

American metropolitan areas

Cities with a lower median household income tend to have higher poverty rates, and Detroit is a prime example. Here is a Forbes list of large U.S. cities (100,000+ people) with the highest poverty rates:

  1. Detroit – 35%
  2. Cleveland, Ohio – 32.7%
  3. Rochester, New York – 31.3%
  4. Syracuse, New York – 31%
  5. Dayton, Ohio – 30.6%
  6. Gainesville, Florida – 30.6%
  7. Buffalo, New York – 30.1%
  8. Athens, Georgia – 29.9%
  9. College Station, Texas – 29.6%
  10. Brownsville, Texas – 29.3%

Although Detroit’s descent into poverty over the last 50 years has been quite steep, there is hope on the horizon, with the number of residents living below the poverty line decreasing by 4.8% in five years.

Detroit’s poverty rate was 39.8% in 2014 and decreased to 35% by 2019.

How many jobs are in Detroit?

manufacturing jobs

At the height of Detroit’s success, when it was the richest U.S. city, there were 200,000 workers in manufacturing jobs, accounting for 1 out of 10 residents.

Nowadays, there are around 180,000 jobs in downtown Detroit and thousands more in the surrounding metropolitan area.

However, Detroit’s unemployment rate has hovered between 20% and 25% in recent years, due in large part to the COVID-19 pandemic and the Great Resignation.

Downtown Detroit workers account for one-fifth of total employment in the Detroit metropolitan area, which spans ten counties for a total population of 5.9 million people.

When you count the wider Detroit region, there are 347,000 businesses and $203 billion in gross domestic product.

Even though the industry has changed, Detroit is still known as the world’s auto capital, and much of the employment and business activity comes from auto manufacturing.

Recent figures indicate Michigan’s auto industry directly employs around 291,000 people across the state, with a significant chunk in Detroit.

 auto industry

That’s not to mention the 422,000 indirect jobs supported by the auto industry, such as leather, metal, and fabric production.

Metro Detroit has also emerged as a leader in high-tech job opportunities, including advanced manufacturing and life sciences.

Is Detroit a safe place to live?

When Detroit’s population peaked at 1.85 million in 1950, Michigan’s major metropolitan area was the fifth largest in America behind NYC, Chicago, Philadelphia, and L.A.

Then, crime in Detroit wasn’t nearly as bad as it is now, with Detroit’s crime rate currently sitting at 56 per 1,000 residents. This means the chance of being a victim of property crime or violent crime is 1 in 18.

Considering the crime and poverty rate, Detroit is not as safe of a place to live compared to other large metropolitan areas.

Generally, richer cities have safer neighborhoods than areas with high poverty rates, and Detroit is no exception.

The city ranks above the national average in all crime categories, with 328 murders, 11,518 aggravated assaults, and 1,848 robberies in 2020.

That being said, the pockets of Detroit are safer than others, and the suburbs are still popular with many American families.

Crime is just something to be aware of for anyone living in or looking to move to Detroit.

If you want to visit or live in the safest part of Detroit, the Berkley area is best with a crime rate lower than the national average.

What are the most dangerous cities in America?

Berkley area

Detroit has a reputation as one of the poorest and most dangerous cities in America, with murders, rapes, aggravated assaults, and property theft rates higher than the national average.

Even so, over 670,000 people still call Detroit home, and there are many suburban neighborhoods in the city that are popular with families.

To give you a better idea of where Detroit ranks, here is the Forbes list of the most dangerous cities in America based on the cost of crime:

  1. St. Louis, Missouri
  2. Jackson, Mississippi
  3. Detroit, Michigan
  4. New Orleans, Louisiana
  5. Baltimore, Maryland
  6. Memphis, Tennessee
  7. Cleveland, Ohio
  8. Baton Rouge, Louisiana
  9. Kansas City, Missouri
  10. Shreveport, Louisiana

As the largest city in Michigan, Detroit has ongoing problems with crime much like other major metropolitan areas across the U.S., which is linked to the prevalence of generational poverty.

The city’s declining wealth and increasing crime over recent decades have influenced the decrease in population, but the Motor City continues to push forward with auto manufacturing and other thriving industries like tech and healthcare.