- Pennsylvania Among 'Terrible 10' Most Regressive Tax States
- February 4 Non-Partisan Training: HOW TO RUN FOR ELECTION BOARD IN 2013: HOW TO RUN FOR COMMITTEEPERSON IN 2014
- Republican Governors Opt-In to Medicaid Expansion
- The Reports of Unions' Death Are Greatly Exaggerated
- Ask Allyson Schwartz to run for Governor
- Mind the gap: Opting Out of Medicaid Expansion Leaves Low-income Families Behind
- Jan. 14 Workshop:HOW TO RUN FOR ELECTION BOARD IN 2013; HOW TO RUN FOR COMMITTEEPERSON IN 2014
- Seth Williams on Guns, Jasmine Rivera on School Closures @PFC Meetup Wednesday
- PA Revenue Strong Midway Through Year; Tax Cut Could Have Big Impact
- What to Make of the Fiscal Cliff Deal?
We Need More Startups
Submitted by charlesdog12 on Wed, 12/27/2006 - 3:42pm.
Every day I sit through traffic on 76 on my way to and from the Main Line to go to work. It’s an odd situation, considering that I have always thought that the suburbs were the 5th ring of hell. But I do this, because, sadly, there are no jobs to be found in the Philadelphia city limits. This is even more amusing considering that I am a Software Developer at a time where there are more programmer jobs then there were during the dot com boom. I found out the other day that India, now, is outsourcing jobs to the U.S. I thought that my co-worker was joking, but he was dead serious. So why is it that I can’t find a job in Philly?
Of the roughly 15 people on the technology staff, I am the only one who lives in the city. There is only one other person in the company that I know of who lives in the city, as I do. True, I could get a job in Center city, if I wanted to work for Verizon or Comcast, but that just isn’t in the cards. When I think about working for them, I think of a skit by the late Comedian Bill Hicks talking about how talentless musicians get their 15 minutes of fame. The joke is a little blue for here, but let’s just say that it involves hanky panky with Satan.
So when most programmers move to this area, or decide to stay here, they wind up living in the suburbs. We can’t live in Center City, because we absolutely have to have a car. A parking space is like a second mortgage, and even if it weren’t, your commute to work would be an hour each way on a good day. So, unless you grew up in one of the City’s other neighborhoods, like I did, you see almost no point in moving into the city, especially with the City Wage Tax that we have and the crumbling schools. Friends of mine just had a son, and it looks like we are going to lose them too because our schools suck. Because when you have kids in Philly, you have two viable options, private school or the burbs.
I live in Mt. Airy, because I want to live in a place of cultural and economic diversity. I love this City, both for what it is and what it can be. I get punished for that though. When I bought my house, I learned about the retarded real estate policies that we have. First of which is the 2% transfer tax when you buy and sell a house (3% is from the City, and the other 1% is from the state). This cost me about 2000 dollars, which I could have used to do home improvements or pay points on my mortgage which would have saved me about 600 bucks a year. That’s a lot of money for young people who want to own their own homes and do it here. It makes owning a home that much more risky, because your house has to appreciate 10% before you break even. Besides that, I think that it’s pretty stupid to tax wealth, but that’s another story.
Then you look at those lovable 10 year tax abatements. As Bill Cosby said of having children, it was a good idea at the time. But now it’s hard not to call the policy racist. It basically rewards rich Wasps for moving into gentrifying neighborhoods at the expense of its ethnic inhabitants. So rich people who don’t want to contribute to the community get tax breaks to move into a neighborhood that they would have been moving into anyway. Meanwhile, people who have lived there for 30 years are forced out when their taxes triple. And even if they can afford to live there, it isn’t the neighborhood that they know and love.
This is a round about way to get to an actual point. When I hear our political leaders talk about how we need jobs and the only way to do this is to build Casinos or Jetson style pipe dream induced sky towers, I want to vomit. To me, that just shows an overwhelming lack of substance and leadership, whether they blog on this site or not. What we need to do is create a city that’s attractive to startups. If you haven’t read any of Paul Graham’s essays on the subject, then go do it now. In How To Be Silicon Valley, he actually sites Philadelphia as a place that’s not attractive to startups. I happen to disagree with him. I think that it’s a great place for startups, if we change a few things.
We have so much that people like me want. We are the birthplace of modern Democracy. We have the biggest city park system in the world. We have a very vibrant music and Theatre community. We have great schools like Penn, Drexel, St. Joe’s, Villanova, and Temple (Go Owls!) We stand right between the financial and political capitals of the world. So we have access to the money, and we have access to the nerds, so what’s the problem?
First, let me get the controversial thing out of the way. Our tax system is a tragedy. With a high City Wage tax, high earning individuals (i.e. Management and/or founders) do not want to have their company in the City, especially when they already live in the suburbs, where all the good schools are. Then there is the Business Privilege Tax, which has a portion that taxes gross receipts. So if you are in a low margin business, like most businesses that create jobs or spend money on other businesses that create jobs, then your get taxed before you even earn anything. And, if you are a consultant, which you will be if you are starting a business, then you have to pay all of your City taxes a year in advance, which can suck if you make a lot of money one year but a little the next, which happens a lot in my business. I am not saying that you should cut taxes at the expense of social services, but what I am saying is that you need to have a tax system that makes sense and will attract more businesses to the city.
The next thing that you need is a good public education system. How can we have a city that is not beneficial to raising a family? Why is it that my parents had to choose to stay in the city and send me to private school or move to the suburbs and send me to public school? Why are my friends having to make the same choice? And then, what about the people who don’t even have that choice? What do we say to them?
What’s up with out public transportation system anyways? Why do I live in a city where I have to have a car? Why don’t we have trains running all hours of the night like they do in New York? Why do the regional rail lines only run once an hour in certain parts of the day?
What’s going on with the touristification of the City? Is our answer to everything a high rise Condo, a Casino, or places for people to go shopping? Is it really OK to take the city which is known for its great ethnic neighborhoods and turn it into WASPY heaven?
I know what some people are thinking. Who cares about highly skilled jobs? Well, for one, I do. And people like me are the kinds of people that you want in your City. Programmers are overwhelmingly progressive, egalitarian, community oriented and artistic, and we have a good amount of disposable income. That’s why all the ladies love us. OK, that was a joke, but I digress. If we attract more programmers to our city, then businesses will be created to support them, and in our companies, we may not directly hire a lot of non technical people, but the ones who we do will get a piece of the pie. Every one of the employees will be respected, from the CEO all the way down to the janitor. We as a city don’t need more jobs, especially the types that will be created by Casinos and sky malls. What we need are good jobs, and those are hard to come by and they aren’t created as the result of a big campaign contribution or by something that will get good press.
I may sound a little self absorbed here, but it’s only because I love this city and want to stay here. Moreover, I want to always have an interesting job and to be around smart people who I can learn from. I’m doing pretty good now, but who knows what the future will have in store for me. There may come a time where I have to move to another city like New York, DC, Boston, Raleigh-Durham, Austin, Seattle, Boulder, Denver, or Silicon Valley. What I want is for those people to want to move here. I think that we can do it. We just have to buck the system.
Charles, Aside from the, in
Charles,
Aside from the, in my view, gratuitous mentioning of WASPS (by the way, I have not noticed a significant WASP invasion into this city, but maybe I am not paying attention), I think you post is actually very relevant to the things we need to do in this town. I know people are very sensitive about tax policy on this site, but I think we can all agree--while we do not have to lower taxes, we can make the system a bit more fair to businesses, particularly start-ups and small businesses.
In the current economy, it seems jobs are becoming more and more polarized. High skill, high wage jobs on one end and low skill, low wage jobs on the other end. While I would certainly like to see high wage jobs across the board, I do not think we should be selective in the businesses and employers we want to hire. If we can make this town more attractive to high skill employers, we absolutely must do that. In that case, we can capitalize on new businesses, the support positions they require, the additional revenue and, just maybe, attracting people (particularly high skilled immigrants) to live in this great city.
Sadly, I am not a programmer, but I am a lawyer. my firm has over 200 lawyers. But, in terms of the support staff we have and vendors we deal with, our firm, and many others, create a good portion of the economy in this town (which is why a sales tax on legal services would be a bad thing). The more high end, high skill businesses we can attract, the best for everyone.
WASPs
You mean you haven't seen the invasion of the body snatching WASPs? Just kidding. But seriously, go to Manyunk. WASP central! Although that's nothing new. But when I was growing up it was more of a working class place. South Philly is changing. It used to be overwhelmingly Italian and Lebanese, and now there are more people moving in who want to be close to Center City. The Art Museum area used to have a lot of Eastern Europeans, Blacks, and Hispanics, and they are being pushed out or are leaving. Then there is Northern Liberties and Fishtown. Fogetaboutit.
I probably should have used a less polarizing term like YUPY, but I think that most people know what I mean. Besides the fact that you know, as well as I do, that gentrification is just a nice word for rich people, most of whome are WASPs, moving into working class ethnic neighborhoods and pushing out its current inhabitants.
Oh, and the reason that we don't have Sales Tax on Legal Services is because lawyers make the law. Yes, it's a bad idea, but that never stopped anyone in the past.
The problem with South
The problem with South Philadelphia is, for the last 30 years, many of the young, professional children who grew up there chose to move elsewhere (South New Jersey). I do, however, see a movement in my generation of South Philadelphians towards staying in the city, which is great.
Those tax abatements, however, are not all bad. In South Philadelphia, some of our natives are using them to buy newly built housing near the stadiums. So, to the extent actual Philadelphians are benefiting, it does happen.
I get the gist of the argument though.
Wait, I think I skimmed over
Wait, I think I skimmed over this before. So, when you were growing up, South Philly used to be overwhelmingly Italian (got this one) and Lebanese? Really? There were more Lebanese in S Philly than, say, Irish? Or African-American? Or Vietnamese?
I forgot Irish
But yeah, there was a pretty predominant Lebanese population there. How do you think that Jimmy got elected?
Well, I assume you are
Well, I assume you are referring to Jimmy Tayoun from way back when?
According to the 2000 Census, Philly as a whole had about 1,000 people who identified as being of Lebanese ancestry, compared to about 12,000 of Vietnamese, and 200,000 of Irish ancestry. Sure, there may have been and still be a strong, but small Lebanese community, and some may have moved prior to 2000, but I think you are basically wrong in saying they dominated South Philly in any way.
OK Counselor
Jeez, I’m trying to talk out of my ass and here you go bringing up facts and stuff. You went and read the Census? Is this what you do when you have time off from Law School? Pretty scary dude.
You are right Chuckles. I
You are right Chuckles. I apologize for inserting truthiness into the discussion.
Our solution: move.
My wife and I both grew up in the city. We are both Central and Drexel grads, and I stuck around for two graduate degrees. When I was done with school and started the job hunt, we came up short. There was very little in my field, namely information security, in and around the city. My wife was looking to do something new, and there was a paltry amount of jobs in electrical engineering for us to shift into.
We ended up moving to San Francisco for work. The number of jobs here is disgusting. It is the elysian fields for engineers: salaries are high, and they are respected and sought after regardless of age. This is a stark contrast to what I remember from Philly, where engineers past the age of 40 are laid off and jobs are few and far between.
We both miss the city, the people, and the culture... we had no choice to get up and leave.
Also, startups won't help Philly. East and west coast VCs almost as a matter of course refuse to fund Philly-based startups if they stay in the city because, in the words of several VCs, "there is nothing going on there."
I'm not moving
I think that times are changing here though. I hear you on the age thing. My mentor is getting close to 40, and he is thinking about dumbing down his resume so he doesn’t look dated. He’s afraid people will think that he wants too much money. But what I really find is that most coders just don’t want to be coders when they are 40. I hope that I still do, but once most people get into their mid 30’s they try and shift into management or just get a boring IT support job. It’s not that they are pushed out as much as they burn out, and that’s because there are no startups here.
Startups are the funniest places to work, even if the hours sometimes are crazy. I’m working at startup number 2 right now. The first one, which my friends started, went out of business. It was in the city though, which was fun. The one I’m in now is like the second phase of a startup. We are funded by ICG, also known as the company that had a higher market cap than GE. Yup, they are still around.
So we do have VC in the area, but they just like to have their offices out in the Burbs. And VC, in general, are whores (my employers excluded). They will go wherever the action is. The good thing is that the biggest expenses for startups are usually food and rent. So you can create a killer app with little money. Once we have a killer app, then come the sharks. And as the guy from Mcafee said. VC may be sharks, but when you get them on your side, they’re your sharks.
This is why job development should be key to the mayoral race,
I have two children who are recent college graduates. They are here for the holidays because they work far away. They love the city (and their parents) but they can't get their career's started here. I for one am tired of seeing bright young people with college and post graduate degrees serving drinks and dinner in downtown restaurants when they should be working in their chosen field. I don't have all the answers to this puzzle but I think it starts with leadership that chooses competence over cronyism and doesn't see every new development idea as a chance for raising campaign funds.
It makes me sad too
But, in all honesty, how many people do you know with marketable degrees who serve drinks in bars? If you have a Masters Degree, in say, Philosophy, then you are probably going to be working a crappy service job no matter what city you live in.
But I do agree to your sentiment for the most part. When I got out of school (2002), I had a degree in Math and Computer Science, and the market was just horrible. So I chose to live with my parents and take extremely crappy pay at a startup that my friends and I were working on. If I wasn't working there, I probably would have moved to New York.
The time that I spent was valuable though. It was extremely fun, and the experience, both in and out of programming, have made me very marketable. It also helped me come to the realization that I wanted to stay here. I really did used to think New York or bust.
I have no doubt that if I lost my job, I’d have another one in about a month. The question is, where will it be, and what kind of job? And when my Industry is taking off like it is, there is no reason in hell that I shouldn’t have the pick of the litter in this town, and there certainly is no reason that I would have to go to the suburbs to find a job.
Development and Recruitment: Business Plans for Elected Offcials
Tom, great comments. I wanted to post on this thread a bit earlier but was swamped at work. Just yesterday, the Inquirer ran a piece by Wendy DiMattatteo Holsinger which described how PA is taking an active role in recruiting companies to come here and open businesses. It details how in the past:
"the approach was reactive: Economic-development officials responded to companies when they either threatended to leave the commonwealth or wanted to expand."
Pa is now using a more proactive model. Very good piece-and a very good start to a critical problem which our commonwealth and specifically Philadelphia, has been battling for some time. Last May, in the Democratic Primary for the State House, I put out an economic deveolpment policy for my District and throughout Pennsylvania which included, a significant ramp up of the role state officials play in attracting new business to Philadelphia and to PA. It was my position then, as it is now, that elected offcials, specifically at the state level, must create an economic development business plan, just like most of us do every year, to guide our marketing and business development activities throughout the next 12 months. I think that plan must include specific types of business and industry that the official has determined, through research, are viable options here in PA and the City. Further, I would include in my own plan, efforts at visiting neighborhing cities who currently have businesses and industries which may compliment those existing in Philadelphia or are a favorable match as startups. I said it before and I think this thread really sums it up very nicely- we need to be proactive in attracting new business and in keeping our work force right here in Philadelphia and Pa. The development of a workable and pointed business development plan by a state rep or senator is essential to the econmic growth of our city and our commonwealth.
For example, we must continue to do more to grow the biotech industry right here in Philadelphia. I really believe, that given our proximity to both Wall street and Capitol Hill, greater Philadelphia can and should be to biotech what Silicon valley was to microchips in the 1990's. I said this back in May and I still feel it is an area that we should focus our economic development efforts on in the next several years.
The role of elected officials, specifically on a state level is evolving. These folks must have the ability and the know how, to go out and market our state and our city, actively and agressively, not only to other parts of PA but throughout the country. When I get pieces of mail describing my official's efforts over the last several months, I would just once like to see something about what new industry or business this person has been tarketing for start up or transition to our district and why its a good fit. I would love to see a real economic marketing plan for how we can expect to keep people, of all ages, here in our city instead of seeing them pack up and leave.
I think the point about how "economic development" cannot become an issue for raising campaign funds is excellent. Like Tom, I admit I do not have all the answers. But when you have proven practices and startegies from the business world which work, they should be used and refined. Asking our reps to development a business and marketing plan, is a good start and something which I do now and which I will continue to do in the future. At the end of the day, our elected officials, are really much like our own "PR" people out there representing Philadelphia to bussiness, industry and the general public. One of their jobs, in my opinion, is make our commonwealth and city attractive and to ensure that they have educated themselves with the necessary reseach and data to do this job properly. As this thread points out, its much too important and the benefits are just too great to overlook.
I want to post about economic development a bit more but I wanted to jump in on this thread because I really think everyone who contributed, starting off with Charles, makes great points and sheds light on a very critical issue for our City and for the Commonwealth.
PS- Sam Durso, if you read this post, let me know if caught the article in thursday's Inky. You and I have talked about the role of state reps on this issue in the past and I thought of you when I read the article.
Larry
Thanks Larry, Thanks Chuck
Dug out my yesterday's Inquirer Larry, as I'd missed DiMatteo Holsinger's rather awkwardly-placed Commentary (to the RIGHT of a twin NJ piece, as though we come 2nd) and it's indeed the kind of thing we'd discussed earlier: a way state government can act pro-actively, not just scatter taxbreak chum in different industrial pools, but actually reel in real companies (with REAL JOBS) themselves.
Would it not be beautiful, Mr. Farnese, if the governor's initiative had a local champion, say in the state house, acting as agent for the city?
Would it not be even beautiful-er if city government had a corollary program to work hand-in-hand with the state, with some creative council-folk leg-working the local end?
And Great Post Chuck! It's easy for already-employed Philly-lovers to lose sight of the secret tax/education/transit formula so necessary for attracting the NEXT generation of jobs. That's what I mean when I talk about VISION!
Saddens me I have to kick your ass next time I see you, in the name of my D.A.R. grandmother (Secret Durso Formula = 75% Italian, 25% WASP).
You're still the only YPP person I've ever cooked dinner for, despite other likely candidates. Maybe we can just argue over cheap beer at McGlinchey's.
You can be progressive and pro small business
Chuck, Larry, and Sam, thanks for the posts. The creation and support of small businesses in Philly will not only help to keep young people in our City but will also help to address the crime problem by providing more jobs.
One of the core reasons for crime is the lack of income to provide for the basic necessities. With more small businesses (especially in our neighborhoods), more jobs will be available and people will be less likely to resort to crime and more focused on work. In addition, people will be more encouraged to start their own businesses. When I was a small business lender with Meridian Bank in North Philly, I was always encouraged by the business owners who were able to succeed against the odds and provide jobs for people in the neighborhood. In fact, my father-in-law had a small North Philly auto body shop and he helped a lot of young people get their start in the business.
Yet, if a progressive person talks about ways to help businesses like Mitch's Auto Repair they can get branded as a traitor or not really progressive. In my opinion, we can be both progressive and pro small business. As Chuck can attest, starting a small business is really hard work. In addition, our City's business tax structure makes starting a business even harder. Personally, I learned how bad it was when my wife, some friends, and I opened a retail shoe store in Mt. Airy. It makes no sense for us to have to pay for a Gross Receipts Tax before we make any profits when our major competitor, who doesn't pay this onerous tax, is a shoe warehouse just across Cheltenham Avenue in Montgomery County. Without the Gross Receipts Tax, we would be able to hire another part-time employee who would be encouraged to start their own business.
From this perspective, we need to find ways to help and encourage small businesses. However, let's not brand people who are pro small business as not progressive.
Derek, I think you will find
Derek, I think you will find many people here who are pro-small business. I am one. All of my uncles are or were small business owners--I even worked in one of their places for 5 years, through graduating from high school (I know it kept me out of some trouble). My father and his father both owned small business too. Not only do they provide jobs for the community, but they help families feed their kids and contribute to pedestrian traffic in my nieghborhood.
I have seen these things first hand. My uncle (the one I worked for) owns a grocery/deli. There are times when families, many of whom live paycheck to paycheck, needed groceries for their families (lunch for school, dinner, etc.) My uncle would still make the sale when people couldnt afford to buy. He would give them the groceries and keep an index card with a running talley. He never added interest and only placed the price onto that card. When people got paid, or had money, they would come in and pay him. He relied solely on good faith.
This particularly helped seniors who lived on a fixed income (of which there were many in the neighborhood). One time, an older woman (about 70 or so) hadn't come in or called for a delivery in about a week--highly unusual for her. My uncle went to her house to check on her--he saw her through the window, on the floor. He got himself in there, but she was already dead. It was hard for him, as they became friends over the 25 years they knew each other. But, he also helped to feed her. Her index card, which was ripped-up and thrown away that day had over $400.00 worth of groceries on it.
Some would say that is bad business. But, he was able to keep his family fed, clothed and put his kids through college. Obviously, he is doing something right. In addition, he regularly employed at least two neighborhood teens at a time (including yours truly). Small businesses are our communities--they are the heart of it.
I guess what I am in-artfully saying small businesses need to florish, they need incentives and they need help. We can disagree on what these things are, but the need is urgent. Progressives must be small business.
GPUAC Small Business Lending Taskforce
On January 11 @ 10:30 am, the Greater Philadelphia Urban Affairs Coalition (GPUAC) will announce a new small business lending initiative at the African-American Museum. The GPUAC initiative was developed by the small business lending taskforce which was created in response to my policy and legislative work on City Council - and I am one of the featured speakers for the announcement.
This "Tier 2" initiative is the collaboration of several banks that are part of the GPUAC taskforce.
"Tier 3" is also on the way through the approval of the Neighborhood Commercial Corridor Bond initiative by City Council this fall - a local Small Business Loan Guarantee Fund that I championed will also become reality in 2007 - and was recommended by both the GPUAC taskforce and the Mayor's Economic Development Summit.
I agree that small business development must be at the top of the public policy agenda in 2007. Because it's about JOBS.
WWGjr