The day Jackie laid off all his workers: Detroit’s economy crashed in 72 hours

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They say that when America gets constipated, Michigan gets pneumonia. Its main city, Detroit, the cradle of giants like General Motors but with 33% of its population poor, is a black point of the worst crisis since the Great Depression. A decade of resurrection ended in three days.

Jackie Victor told her father in 1997 that she was going to open a business and that Michigan lawyer laughed. After so many years of activism, banner and assembly, her daughter embraced the faith of the convert: “In the end you have become a capitalist,” she told her. “It’s just that I,” explains Jackie, “was a very politicized, radical person, and I answered that no, that what I was going to become was a socialist entrepreneur.” Detroit, a city tortured by a thousand crises, an icon of American glory and industrial decay, the cradle of Fordism and Aretha Franklin, was embarking on a long road of resurrection and his was going to be one of those projects that breathed life into it.

A 180-square-meter café with four employees became, over the years, a chain of four restaurants. That first oven that he bought, in a bread supplier company for a hundred cafeterias and food stores throughout the State. One day, the billing record arrived: five million dollars, one on top of the other, five million.

On the morning of March 16, Avalon International Breads, the small empire founded by Jackie Victor, had 135 workers. The next day, there were barely a dozen left. A week, one. This damn spring, the social-capitalist entrepreneur remembers the conversation with her father, the road traveled. “But I don’t feel that I have bolted the bolt, or that I have fired someone, I feel that this pandemic has. It was very fast, as soon as the order to close the restoration arrived, all the orders disappeared. We had to close three of the four restaurants at once, and in the one that was open with take away service we barely had 10% of the usual work. The situation also became very unsafe. Two members of the management team had been infected, another had a fever … We, the partners, sat down and said ‘it’s over’, at least for now, ”explains Jackie.

Tristan Taylor, one of the victims, 36 years old, spent his first day standing at home on March 17 and taking accounts. His girlfriend was still working from home, which was good news and bad. On the one hand, it guaranteed the entry of salary into the home. On the other, it was part of what had cut the last thread of life at Avalon Breads: all those office professionals who made up the bulk of the clientele and who would no longer stop by to buy their focaccias or cappuccinos. The works in his area, one of the city’s neighborhoods struggling to resurface, had also stopped short. Keith Kendricks, a 58-year-old construction worker, was notified by his boss that afternoon. The following day, Wednesday 18, Detroit’s “big three”, as General Motors, Ford and Fiat-Chrysler are known, announced the suspension of activity and, with it, that of car component suppliers.

And so, like a succession of dominoes toppling each other, an entire economy that was going from strength to strength collapsed within 72 hours.

The self-imposed hibernation in half the world to stop the spread of the coronavirus has placed the world’s leading power in the face of its worst earthquake since the Great Depression. More than 36 million workers have requested unemployment benefits since the pandemic began and this piece of land in the north of the country is one of the red lanterns.

“We tend to say that when the United States catches a cold, Michigan has pneumonia,” says Don Grimes, regional economics specialist at the University of Michigan. “Recessions hit us harder than the rest of the country because of the structure of our economy, highly dependent on manufacturing and, especially, the automobile, and in a crisis, that falls more than other parts ”. Just that March 16, Grimes and his colleagues had just closed the latest macroeconomic forecast report, which they no longer presented.

Pneumonia now has the United States and Michigan has no more metaphors. Grimes’ team estimates that the unemployment rate will reach 23% in the second quarter, an unprecedented high in the statistical series –starting in 1976– and far removed from the 15% of the Great Recession of 2009. “The sad thing is that things they were doing very well so far, “he explains.” Between 2009 and 2019, family incomes had grown 49% in the State. Relative to the national average, this had been the best decade in modern history for Michigan. And suddenly, we enter a new world ”.

In this new world, on a Wednesday afternoon at two in the afternoon, not a soul passes by on Woodward Avenue, the central artery that best reflects the resurgence of Detroit. After the municipal bankruptcy of 2013, the largest city bankruptcy in American history, the old motor capital had begun to rise again. Right there, a century ago, Henry Ford revolutionized the economy with chain production and now a string of startups Technology and service companies had occupied their office buildings, attracted by cheap land and the driving force of the automobile industry. Avant-garde restaurants multiplied. Dan Gilbert, a millionaire from the city, purchased 70 buildings downtown and installed more than a hundred firms. John Varvatos, the luxury menswear designer, opened an imposing boutique to the rhythm of rock and roll in 2015.

Last week, Varvatos filed for bankruptcy over the pandemic. The music no longer plays at full volume in the place, closed and dark, like everyone else on that street, now ghostly. The neon with the slogan “Nothing Stops Detroit” in a window catches attention as an inopportune joke.

The hustle and bustle has moved elsewhere, specifically to the Pilgrim Baptist Church in the Grixdale neighborhood. Thursday, nine in the morning. There are three hours to go before the food delivery and an endless line of cars, old, new, of all kinds has already formed. The first person in line, Sabrina, arrived at 7.30. An independent nurse, she is 47 years old and has a very simple explanation of the interaction between the health and economic crisis: “I treated two patients in two houses and they died from covid-19,” she explains. The first died the same week in which it seemed that everything was breaking, the second held until the end of March. After a lifetime in Detroit, she has seen a thousand recessions go by, but this one, she says, is something different “because everything is scary, even talking to you.” Keith Kendrick, the bricklayer, is 20 cars behind, with the Bible on the dashboard, reading at times as he kills time until he receives his box of groceries, praying that this will happen soon.

“Here we serve food to 400 or 500 families and they are people of all kinds, many, with salaries of 10 dollars an hour, they cannot pay everything either,” says the Reverend Yvette Griffin.

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