Study: Job growth in Philly lagging behind other Northeast cities

Posted: January 10, 2014

PHILADELPHIA has 25 percent fewer jobs than it had in 1970, and while other major Northeastern cities have reversed the job-loss trend, Philly continues "bumping along the bottom," weighed down by poverty, unemployment and education problems, the Center City District's Paul Levy said yesterday.

Levy released the results yesterday of the group's two-month study of the city's sagging job growth.

Levy and researcher Lauren M. Gilchrist found that Philadelphia fell below comparable cities like New York, Washington, D.C., Boston, Baltimore and Detroit on many measures that contribute to stagnant job growth. For example, Philly had the highest unemployment rate (10.1 percent in October), the highest poverty rate (26.9 percent) and the most uneducated residents (57 percent of adults age 35 and older, and 39 percent of those age 25 to 34 had just a high-school diploma or less).

Tax reform is the key to reversing the trend, Levy said.

"We are extremely dependent on two taxes that tax what moves," said Levy, referring to wage and business-profits taxes, which comprise 66 percent of local tax revenue. "It's not that we tax too much; we tax the wrong things."

Such taxes increase the cost of working and siting a firm in the city, which discourages business growth and drives down office rents, Levy said. Those taxes also prompt workers and companies to flee for the suburbs. About 188,000 Philadelphians (36 percent of the workforce) work in the suburbs, Levy said.

"As the burden of wage and business taxes goes down, the demand for real estate citywide will go up, increasing the share of real-estate taxes that can be derived from business, not residential properties, while expanding the tax base for the school district," Levy and Gilchrist wrote in their report.

Levy highlighted other promising trends that could spur job growth:

* More millennials: The city is attracting more college-educated young people at a higher rate than the suburbs (the city's population of college-educated 25- to 34-year-olds grew 59 percent from 2008 to 2012, compared with 8 percent in the suburbs).

* "Eds and meds": Job growth in academia and health care have been "recession-proof," Levy said, adding that the city claims 58 percent of such jobs regionally.

* New proprietors: Self-employment has surged 37 percent in the city since 1970 - growing 114 percent (about 50,700 new proprietors) just since 1999.


On Twitter: @DanaDiFilippo

Blog: phillyconfidential.com

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