Why San Francisco beat Detroit
COULDN'T the San Francisco Giants, representatives of the second-wealthiest U.S. metropolitan area, manage to lose at least one World Series game to the Detroit Tigers, the standard-bearers for one of the most troubled U.S. urban areas? The ever-magnanimous New York Yankees generously boosted the Motor City's morale by giving the Tigers a clean sweep in the American League Championship Series, but the Giants crushed their opponents. Perhaps the Giants felt compelled to send the country, and our presidential candidates, a clear reminder that their home city, and not Detroit, provides a clear model for America's economic future.
Yet their victory should also remind us that the San Francisco model is not always kind to lessskilled Americans.
As recently as the early 1970s, San Francisco and Detroit seemed to be on a similar trajectory. The San Francisco area's per capita income was 31 percent higher than the U.S. average in the 1970 census; incomes in Detroit were also a healthy 18 percent above the nation. Their central cities had both been declining from 1950 to 1970, like most older U.S. urban areas. Murder rates were already quite high in Detroit, but San Francisco was filled with fear of the Zodiac Killer, who provided the model for Dirty Harry's first antagonist.
Today, the two areas couldn't seem more different. In 2010 (the latest year available), per capita income was $59,295 in the San Francisco area, which was wealthier than any metropolitan area except for Bridgeport, Connecticut (including Greenwich and Stamford). It was $38,197 in the Detroit area. The mean household income in the city of San Francisco in 2011 was more than $100,000; the comparable number for the city of Detroit was $35,709. The unem- ployment rate in greater San Francisco is 8.2 percent; the unemployment rate in greater Detroit is 10.9 percent. San Francisco had about six murders per 100,000 people in 2011, while Detroit had more than 48 murders per 100,000.
Those remarkable economic and social differences help explain the different population paths of the two cities since 1970. Detroit's population declined by 37 percent from 1970 to 2000, and fell by an additional 25 percent from 2000 to 2010. San Francisco's population actually rose by more than 12 percent from 1970 to 2010. In 1950, Detroit's population of 1.85 million was 139 percent higher than San Francisco's population, but today San Francisco is the more populous city, despite Detroit's having more than twice as much land.
Detroit's decline was rooted in its spectacular 20th century rise. Like San Francisco, Detroit rose as a port -- the city is named for straits that ultimately connect Lake Huron (via Lake St. Claire) and Lake Erie. Companies, such as Detroit Dry Dock, formed on those straits to sell to the vast flows of American waterborne commerce. Those companies provided training for talented farm boys, such as Henry Ford, who ultimately became one of Detroit's great automobile entrepreneurs -- a cluster comparable in every way to the nexus of talent that gathered in Silicon Valley 70 years later.
The talented men -- Charles Kirby, the Dodge Brothers, the Fisher Brothers, Ransom E. Olds (in Lansing), Billy Durant (in Flint) -competed and cooperated and collectively created the mass-produced automobile.
Ford's big idea was mass production with automated assembly lines, and this innovation both made Detroit marvelously productive and blessed ordinary Americans with wonderfully affordable Model T's. Ford paid $5 a day, bringing remarkable prosperity to ordinary Americans, something that San Francisco's Silicon Valley has so far failed to achieve.
But vast factories, such as Ford's River Rouge, are kingdoms unto themselves. They don't need the cities that surround them, and when economic conditions change, factories are relocated to lower-cost areas, such as the right-to-work states of the South and the developing world.
San Francisco's manufacturing base, including its once- mighty shipyard at Hunter's Point, also declined after World War II.