Job losses haunt the city

The new Glaxo HQ at the Navy Yard, one of Philadelphia's four jobs centers.
The new Glaxo HQ at the Navy Yard, one of Philadelphia's four jobs centers. (AKIRA SUWA / Staff)
Posted: April 12, 2013

There is a specter haunting Philadelphia; it is the specter of job loss.

In each economic cycle in the last four decades, the number of jobs attained at the top of expansion was less than what we had at the prior peak. There are 264,240 fewer jobs today than in 1970 - a decline of 25 percent. At the rate we are going, there will be 60,000 fewer opportunities for Philadelphians by 2023.

Mayor Nutter's Five-Year Plan put it out there for all to see: We have the second-highest poverty rate among the 20 largest American cities, behind only Detroit. For years, Baltimore had a higher poverty rate; no more - 25.1 percent of our neighbors to the south live in poverty. In Philadelphia 28.4 percent of our neighbors languish there.

Job decline is the fate of all old manufacturing cities, right? Wrong. Boston has 18.3 percent more jobs today than it had in 1970. New York City has 14.5 percent more jobs than it had 40 years ago. Like Philadelphia, both lost between 85 percent to 90 percent of the manufacturing jobs they had in 1970. But they have turned things around.

There are many differences among Philadelphia, Boston, New York, and Baltimore. But here is a critical one: Philadelphia depends far more on taxing what moves to support municipal services than these other cities. We have the highest wage tax of the 50 largest American cities for anyone who earns less than $100,000. We tax both the gross and net receipts of businesses, no matter how small or new. Two-thirds of the city's budget comes from taxing what moves.

Is it any accident that in Washington, D.C., where there are 25 percent more jobs than in 1970, the percentage of African American firms with employees is one and half times greater than in Philadelphia, where we have 25 percent fewer jobs? There are start-ups of all kinds flourishing in our neighborhoods. Will they stay or go?

Philadelphia does have four major nodes of post-industrial employment: Center City, University City, Temple's two campuses, and the Navy Yard. Together they account for more than 53 percent of all jobs in the city. They offer a broad range of opportunity, from high-skilled to entry-level (22 percent of Center City jobs are held by workers with no more than a high-school diploma). On average, 20 percent of the residents of every neighborhood in the city work downtown, getting there by public transit. But 42 percent of the residents of most City Council districts now must travel to the suburbs to find work. There are other smaller clusters of employment in Philadelphia. But, together, they don't add up to enough opportunity to replace what's been lost.

We don't have a high poverty rate because there is something wrong with Philadelphians. We have a high poverty rate because of the absence of opportunity and because so many working residents left their neighborhoods in the last decades to be closer to jobs in the suburbs.

Market and demographic trends are now tilting our way. Energy costs are high. After decades of devaluing cities, Americans now want walkable, transit-oriented, live-work places. Office occupancy is higher in the city than in the suburbs. Housing values have held up better than the suburbs. The closer your house is to a vibrant job center, the more valuable it is. Good schools help as well. This is Philadelphia's time to add jobs of all kinds: in construction, maintenance, research, technology, and in professional and business services.

Yes, the debate over actual real estate values is important. Yes, turning around our schools is essential. But, if we don't start adding jobs, all else is in vain.

This is a moment of opportunity, a time of choice. One group seeks to fund services by pushing costs onto others. Another faction suggests tax breaks for some, while imposing the burden on others. What we need is leadership that focuses on growing jobs for all.

The value of cities is rising, and people want to be here. To keep them here, we ought to follow a simple rule: Rely more on taxing what cannot move (land and improvements), and rely less on taxing what easily moves (wages and business receipts). It's time to put the ghosts of decline behind us and choose the path of growth and opportunity for all.


Paul R. Levy is the president and chief executive officer of the Center City District. E-mail him at plevy@centercityphila.org.

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