On Monday, I was a participant in a panel discussion sponsored by Drexel University and the Next Great American City magazine/website called “The Next Great American City: Reconsidering Philadelphia's Future.” On the panel with me were Daniel Brook, PFC member and author of The Trap, Richardson Dilworth, Drexel Professor (and grandson of Philadelphia's greatest reformer and 1950's Mayor), Jillian Ivey, blogger at phillyist.com, and Gwen Shaffer, former Philadelphia Weekly writer (best political writer ever, some might say).

It was a fun and engaging session, but what struck me afterwards, was that even among five intelligent panelists, a moderator, and a lecture hall full of people and students who have all been thinking about Philadelphia's future, the conversation focused mostly on repopulation and image issues, with much less on emphasis wage growth and poverty reduction in the city.

Now, I know I can be a bit hyperbolic, but this obsession with repopulation reminds me of the person who tries every fad diet that comes along (from South Beach to Atkins to eating just cantaloupes and figs) but refuses to exercise. In other words, while attracting new people here and improving quality of life for all of us is really important, our economic infrastructure is in such bad shape that we can't just grow our way into prosperity, we also need to improve what we have.

We have talked a lot about this on YPP before (I wrote about it extensively here, here, and here), but the focus on creating a high-road economy in Philadelphia--that has a tax-base sufficient enough to support citizens and businesses well into the future--is a matter of great practicality that we really must work out as soon as possible.

Defining and Planning for Philadelphia's Economic Future

With Michael Nutter likely to be elected Mayor this fall, obviously the terms of the debate will change and, in that context, I think it's time to return to the mission started when I first wrote a post entitled “Philadelphia's Economic Future” in 2005, which, to quote myself, was:

I think most Philadelphians want to believe in a future that preserves the character and style of our city and is full of opportunities for all. Yet, for those of us who live outside of Center City and a few other neighborhoods, we wake up every morning, look around and see signs of decay. Even for those of who in live in neighborhoods that have already “made it,” we worry that the comfort and security that has been achieved in our communities won't last.

Why have the terms of the debate changed with Nutter's election?

Well for one, Nutter's election means that the debate over taxes and growth is over, because he has pledged to change the rate of taxation for businesses no matter what. That's not to say there are not other tax conversations to be had, but the business community is very happy with his election which hopefully means that, taxes as a factor that retard Philadelphia's economic growth is probably not going to be an issue anymore. (For the uninitiated, some of us here at YPP don't believe that the business tax rate was ever that much of a problem, but some bitterly disagree. This topic has gotten into the middle of almost every conversation we have ever had about the city's economy, but with Nutter's election, it may well become a moot point.)

Another reason that Nutter's election will change the debate is because he was elected in the Primary by a unique group of people: almost equal parts black and white (37 % white, 40% of the black vote). No other Mayor has ever had such a racially mixed base and this gives Nutter a different mandate than almost any past Mayor except maybe Wilson Goode Sr. Goode, like Nutter, was a darling of white liberal circles, though that netted him only something like 22% of the white vote; his victory was largely due to overwhelming support from black Philadelphians (from whom he got 98% of the vote).

Last but not least, Nutter is showing a willingness to listen and engage with citizens is the creation of his role as Mayor. We all know that conversations about Philadelphia's economic future and any recommendations that come out of such a chat, must be geared to our new Mayor and, to some extent, our new Council, and the fact that Nutter seems willing to listen is encouraging.

Repopulation is important, but policies to raise wages and improve access to opportunity for poor, low-income and working Philadelphians must be given equal attention

Ideas to attract new residents here have been pretty well covered. I believe we need to give equal attention to brainstorming and implementing ideas to raise the wages and offer more opportunities to people who already live here. In fact, there are three main points I'd like to highlight in a conversation about moving Philadelphia's economy forward:

1- Wage growth and poverty reduction are key to reducing crime, improving schools, attracting and retaining business, and more.

2- National and international economic trends are fundamentally changing our lives and Philadelphia, based on its existing local resources, needs to plan for a new economy, especially for its younger workers.

3- The City needs to adopt a master plan for growth and development not only for land use, but also for economic development, transit, culture, education and more.

I'd like to write a second, longer post in a few days expanding these points and offering details. Before I do, I thought I'd focus first on some facts about the future of Philadelphia's economy that would be good for all of us to mull over.

Poverty in Philadelphia compared to other cities

According to 2005 census data, Philadelphia the 5th largest city in terms of population and is ranked 10th in the country for the highest rate of poverty among large cities with 22.3 % of its residents living below the poverty level.

Houston, # 4 in population, is ranked 20th for poverty, Phoenix, #6 in population is 30th, Chicago # 3 in population is 24th, LA, #2 in population is 22nd, and NYC, #1 in population is 26th.

Now, it's important to note that Philadelphia gets ranked 10th with 22.3 % in poverty and Chicago gets ranked 19.3 % of its residents in poverty. Statistically, that's not a huge difference, however, in real numbers, if Philadelphia could get down to 19.3% in poverty that would be 45,000 more people living above the poverty line.

Stats on population growth

Contrast the difference a reduction in Philadelphia poverty rates to Chicago rates would make with the results of the Center City renaissance, during which our downtown population growth has doubled in the past ten years:

Though Philadelphia as a whole is still losing residents, Center City has the third-largest downtown population after New York and Chicago. Since 2000, its population has increased 11.5 percent, from 78,902 to 88,000. Experts say it could reach 96,000 to 105,000 by 2010 (from A Smoke Filled Blog)

So it's probably fair to say that the Center City residential growth, spurred by the Avenue of the Arts and downtown focus of Mayor Rendell, has netted our city something like 50,000 new residents since 1991. Those are 50,000 new wage and sales tax payers and some new property tax payers. And at some point, Center City (whose boundaries have been obscenely redefined) will not be able to take in any new more residents.

At that point in time, gentrification of other neighborhoods will begin. Unless, we focus as much energy on pulling people out of poverty as we do on bringing new residents in, our new population growth will be capped, and thus the expansion of our revenue base will slow.

Educational attainment rates in Philadlephia

Of course, there are plenty of people who are not living under the poverty line, but who are struggling to get by. They are people our city could focus on as well. An easy place to start-and this is an area where Michael Nutter has already committed somewhat-would be to get the 80,000 Philadelphians who have some college credits, but no degree, to go back to school.

There are only 110,000 Philadelphians with a Bachelor's degree or higher according to the US census, in a city with about 1,000,000 people over the age of 24. Not everyone is cut out for college, but there can be no doubt that a lot more of our residents have the potential to go to college and eventually become higher wage earners if access to higher education is improved (not to mention changes to primary and secondary public education).

Leaving aside college, there are other ways to increase wages and retail spending among working people who are not in poverty, but still struggle to get by, like lowering car insurance rates, making home ownership more affordable, improving access to city health centers and more.

The real deal on the brain drian

Much has been made of the brain drain in Pennsylvania, and in many parts of the state, it is really a problem. However, here in Philadelphia, we're actually doing pretty well. It is true that more non-natives who go to college in Boston stay there after they graduate than in Philly, but one oft overlooked fact is that by a significant margin, more native Philadelphians who go to college here, stay after they graduate in Boston.

No doubt, it makes sense to try to retain as many California, dot.com Wharton grads brats as possible after graduate school to spend all their-soon-to-be-earned loot here as we can. However, the fact is that simply sending more native Philadelphians to college in the area will do just as much, if not more over the long run, to secure our local tax base by adding college-educated, well-paid residents to the mix.

Median wages and manufacturing

One of the reaons I emphasize increasing our number of citizens with BAs is because in the absence of solid, blue collar employment, college is one of the only ways to achieve class mobility in Philadelphia. I've covered this point in far greater detail before (check out this post) but median wage and salary income in Philadelphia today is still lower than it was in 1969. This is a fundamental problem with Philadelphia's tax base.

Mark Price, over at Keystone Research Center (our state's CBPP and EPI affiliate) wrote some of this stuff up in an issue brief and I will quote him here:

In 1969 the median wage and salary income in the City of Phildelphia was $26,556 whereas the median wage and salary income for Philadelphia workers employed in manufacturing was 29,280. Fast forward 30 years and the median wage and salary income for all Philadelphia workers was $24,300 while the median in manufacturing was $24,900. While manufacturing in 1999 was still an important gateway to a middle class standard of living this gateway was significantly smaller than it was in 1969: In 1969, 28 percent of the workforce was employed in manufacturing compared to just 9 percent in 1999. While the skills accumulated by manufacturing workers are substantial they are in large part not transferable outside the sector and thus the loss of a manufacturing job is associated with a substantial loss in income for displaced workers. The loss of manufacturing employment also means the loss of a pathway to a middle-class income for workers without post-high school education and or formal training. Broadening economic opportunity in Philadelphia will require concerted effort to erect new pathways to the middle-class.

Note: median wage and salary income represents income is a narrower definition of income than total family total income which includes in addition to income from work, income from other sources as well as income earned by multiple family members.

What's Next

So, that's a lot of numbers.

The bottom line, though, is that there is quantitative proof indicating that in order to strengthen the health of our entire city's economy we must address poverty, and weven ore importantly wage stagnacny that is effecting workers at many income levels, not just the poorest of the poor.. In fact, coincidentally enough, Michael Nutter was quoted in the Inky on Wednesday in a story about Philadelphia's poverty ranking by the US Census and he echoes what I am saying:

The economic well-being of its citizens has a direct impact on the city's crime rate, Democratic mayoral candidate Michael Nutter said yesterday. Poverty can be addressed only by focusing on education, economic development, and jobs for prisoners reentering society, he said.

Until then, Nutter said, "we're going to continue to have this poverty condition be one of the main stories of this city."

That's a good start from Nutter, and in a few days I want to expand on three main points i outlinened above in a conversation about moving Philadelphia's economy forward.

In the meantime, take a look at the facts above and consider how much work we all have to do in giving equal weight to the problem of falling wages and poverty in Philadelphia as we do in thinking about ways to attract new residents here.