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Detroit’s informal economy could grow if people just had the right connections

Lester Graham
Michigan Radio

The Next Idea


We usually think of the economy as something centered around the flow of money for goods, services, and other enterprises. But what happens in places where that traditional model breaks down - where, for a variety of reasons, there simply isn’t much cash for anything? People learn to survive without it. They create “informal economies.” And in many parts of Detroit, these informal economies are at work, filling needs however they can.

I began my ethnographic research on this in the summer of 2014 as part of a larger study on Detroit’s informal economy. My work focuses on one neighborhood. I chose it because it has not benefited from the revitalization efforts of the downtown and midtown districts. About a third of this neighborhood’s houses are vacant, many slated for demolition, while many others remain eyesores. Its dysfunctional mass transit system leaves residents stranded and unable to travel across even short distances. The neighborhood also lacks formal investment and offers few traditional work opportunities.

We know that only one in four jobs help lift families out of poverty. This is often because of precarious “just-in-time” and “on-call” scheduling with low wages and no benefits. Many American families subsist on less than the global standard of $2.00 per day, and this Detroit neighborhood is no exception. This is largely because of changes in policies that resulted in reduction or loss in social benefits such as welfare and food stamps. In 2009, Detroit had an official unemployment rate of 27% but some estimates suggest it is closer to 40% to 50%.

So, my research asks: How are people surviving in response to these conditions? How, when traditional work disappears, can residents meet the economic and social requirements of daily life?  Because social networks are integral to all forms of work, it examines how these networks facilitate important exchanges, sharing, and bartering that takes place throughout the neighborhood. Much of this exchange culture has been invisible because it takes place in non-traditional spaces such as homes and ad hoc locations, and little is known about these activities among women in particular. Here are some examples of what I’ve observed.

A neighborhood “swap spot” is open every Saturday morning. It begins with a worship service while families wait to be invited into the supply room five at a time. In the waiting area, families bring canned goods to exchange with others. Once allowed into the back room, families are able to “shop” for 15 minutes and take what they need. Sheets are in high demand because they are often discarded and replaced once soiled. Doing laundry is often an impossible feat without cash or a neighborhood laundromat. A raffle is held each Saturday if there are donated specialty items like microwaves, toasters, or vacuum cleaners. Furniture drives are held monthly or biweekly in the summer months depending on the generosity of donors. Because many families in the neighborhood don't have cars, they rely on rides from neighbors to get to the swap. They sometimes exchange goods for rides.

There are many examples of exchanges that take place in the neighborhood. Sometimes, repair work is done in exchange for rides to search for jobs. Other times, a household with Internet access shares it with neighbors and, in return, borrows their tools as needed for their own household projects. One retired neighbor helps mow empty lots in the summer because the city only mows lots 2 to 3 times a year and overgrown areas become unsafe. Some people acquire and sell items and use their social networks to get the best prices. Others are asked to “homestay” in otherwise vacant homes to protect them from scrappers or squatters; in turn, they have a temporary home. Neighborhood volunteers at the local churches and pantries are often given first dibs at available clothing and food.

In the neighborhood, there are numerous community organizations including churches and non-profit organizations. Most of these hold weekly food pantries, though fresh produce is sparse and meat might only be available 2-3 times a year. A handful also serve hot or cold meals at alternating times during the week. While clothing drives are held throughout the year, household items such as diapers, shampoos and tampons (“dignity items”) are the most needed and sought after items. Other non-profits in the neighborhood focus on beautification and blight removal efforts, including the painting and boarding up of vacant homes, neighborhood watch efforts (with group text alerts), and community gardens. There are ongoing community meetings that provide potluck meals and contribute to information sharing with safety and police updates.

So, what is The Next Idea?

Somehow, the "helping" organizations that are in the neighborhood should attempt to share information on a large scale like the informal networks do on a small scale. Although it may seem like there are an abundance of resources, particularly those offered through the churches and non-profits, there is a widespread lack of centralized information. Many of the needy families who attend the food banks are unaware of the free GED training and literacy classes offered on the north end of the neighborhood. A newer food distribution bank popped up over the summer and some of the families did not know about it. For the most part, these organizations do not communicate with one another. It would be helpful to those who are the neediest to centralize all available resources. By connecting, for example, the warming stations with the food banks and the furniture drives with the hot meals, residents would know when and where to go for many of their needs.

Alternative exchange strategies are episodic, ephemeral and situational; they very much depend on who you know and what they know. What is also needed is a cohesive and more interconnected system of enterprises and organizations, all sharing resources and working to secure the well-being of the city’s residents. These could help to insulate the city from, or at least minimize the effects of, economic forces beyond their control. These types of sharing arrangements can generate sustainable options for the local community, leveraging the existing skills of residents.


Jenny Lendrum is a PhD candidate in the Department of Sociology at Wayne State University.


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