A large percentage of the city’s new job growth is concentrated in sectors paying $35,000 or less, according to a new report by the Center City District (CCD) and Central Philadelphia Development Corporation.
Researchers found that after decades of economic contraction, Philadelphia has grown a disproportionately larger share of lower wage jobs than the nation and the 25 largest American cities.
The report titled “Growing More Family Sustaining Jobs in Philadelphia” notes that since 2009, 60.5% of the jobs created in the city are in sectors paying $35,000 or less; only 26% are in the $35,000 to $100,000 range and 13.5% pay $100,000 or more.
CCD President Paul R. Levy said he hopes the report will spur civic and political conversations around growing family sustaining jobs as a way move people out of poverty.
“In order to deal with unemployment, in order to deal with poverty, we frankly need much more robust job growth than we’re getting,” Levy said in an interview with The Tribune.
“We’re not growing family-sustaining jobs and we need to answer the question why aren’t we growing more, when other cities are. If we’re not growing them, what do we need to do differently?”
City residents have a median income of $39,000.
The lower wages are also causing working residents and college graduates to leave the city to pursue better paying opportunities.
Lauren Smith, a researcher who compiled information for the CCD report, says 18 of her college peers left Philadelphia after they graduated and moved to cities like Dallas, New York and San Francisco for higher paying jobs.
“I think that a lot of people struggle to find something in Philadelphia that would keep them here,” said Smith, a recent Temple University graduate.
Social assistance, food services and drinking places — job sectors that pay an average of $35,000 or less — account for 50% of all new jobs added in Philadelphia from 2009 to 2018, according to the study.
The study explores the factors driving low wage jobs. For instance, an aging population, a significant portion of Philadelphia’s residents living in poverty and the opioid epidemic led public agencies, nonprofits and philanthropies to increase social service spending, helping to create 20,560 jobs. This accounts for the largest category of new jobs added in Philadelphia from 2009 to 2018. The second fastest growing sector in Philadelphia has been employment in food services and drinking places, with the addition of 14,451 jobs from 2009 to 2018.
“We’re no way criticizing these low-wage jobs,” Levy said. “We need jobs because this is a city where only 29% of our adults have a college degree. We need the jobs for people with just an associate degree or a high school diploma.”
Philadelphia employers are not pushing middle income jobs into the lower wage category and paying less for those jobs than employers in either the surrounding counties or nationally, according to the report. In many cases, local employers are paying at or above the national average.
The report also addresses the factors why Philadelphia has such few middle income jobs, including educational attainment, the lack of available sites to accommodate growing sectors such as warehouse distribution and cost of local taxes.
While the city added jobs between 2017 to 2018 at a faster rate than the largest 25 U.S. cities, Philadelphia’s post-recession jobs rebound during the last decade has been slower than its peers. From 2009 to 2018, Philadelphia’s average annual job growth placed it 23rd of the largest 25 U.S. cities.
“Growing jobs is a good thing — I want to be clear about that,” Levy said.
“We’re creating a lot of entry-level jobs and we need those, but the sustained momentum really to create opportunity to keep both both working-class middle income and retain recent college graduates in the city, we need to set as a priority to do better.”