Philadelphia is in the midst of an urban revival. In 2017, we experienced upticks in population and home sales and a downtick in unemployment. These trends bode well for Philadelphia’s future, but they mask economic hardship’s persistence within city limits. While Philadelphia’s unemployment numbers have returned to their pre-recession rate, Philadelphians in areas of racially and ethnically concentrated poverty continue to contend with low incomes and their aftereffects like crime and substance misuse.
Wage stagnation may be a key player in Philadelphia’s tale of two cities. Our stagnant wages make us a national and regional outlier. While Philadelphia has the highest poverty rate among the nation’s 10 largest cities, we are also one of the few cities on the list that still maintains the federal minimum wage of $7.25 per hour. The other “top ten” cities with the federal minimum wage (Houston, Dallas, and San Antonio) are all located in Texas. Philadelphia’s Northeastern peer cities, like New York ($13.50) and Baltimore ($10.10), have established more adequate wage floors in recent years. Philadelphia’s minimum wage has not budged since 2007.
Increasing the minimum wage has emerged as a promising solution for bridging the divide between Philadelphia’s new economy and its longstanding underserved communities. Several studies have linked minimum wage increases to reductions in poverty, income inequality, and social services spending. Since women and people of color are more likely to work low-wage jobs, minimum wage increases also address gender and racial pay gaps.
What is more, Philadelphia’s peer cities did not experience predicted repercussions after raising their minimum wages. When San Francisco raised its minimum wage to $15.00 and indexed it to inflation, the ordinance did not produce negative employment effects. When Seattle passed its $15.00 minimum wage phase-in, the ordinance did not produce significant price increases. Raising the minimum wage enables low-wage workers to share in the benefits of the economic growth that they helped engender.
In January 2019, Pennsylvania Governor Tom Wolf proposed a $12.00 minimum wage for the commonwealth ─ a measure that would increase the earnings of nearly 70,000 Philadelphians. This is an exciting development. The Office of Community Empowerment and Opportunity believes that Philadelphia is at its best when it fields a full team, promoting conditions that allow all residents to participate in our economic, social, and political life. Making a family-sustaining wage is part and parcel to such inclusion.
Throughout 2019, CEO will host a series of dialogues on the requirements for fostering greater economic mobility among Philadelphia’s under-resourced communities through fair wage policies, protection from predatory goods and services, and increased access to asset building opportunities. We hope you will join us. Continue below for additional information on the topic of wage stagnation and check back periodically to sign up for upcoming presentations through our series, Economic Mobility: Earn, Keep, Grow.