Philadelphia's mayoral election is nearing, and the biggest challenge facing the next mayor will be the same one that has faced mayors for decades: how to reduce the high level of poverty in the city.
Growing the economy and adding more jobs is only a start. Even with the city's renaissance, large numbers of residents still live in difficult conditions, even if they are working. Instead of talking about jobs in general, the next mayor should tailor economic policy to match the skills of the city's workforce.
More than one-quarter of Philadelphia's population lives in poverty. That is well above the 15 percent national rate. One of the biggest reasons is that the city's workforce is underskilled. Nearly 20 percent of the population who are 25 years or older do not have a high school education. Nationally, that number is 14 percent. On the other side of the education coin, only 24 percent have college degrees, 5 percentage points below the U.S. average.
The low educational attainment of the workforce makes it difficult to attract businesses. Worse, positions that require only a high school education or less tend to pay wages so low that even full-time workers fall into the poverty category.
So, what should be the guiding principles behind economic development to try to move more people out of poverty?
You have to deal with both sides of the jobs market: improve skill levels, which affects the supply of workers, and encourage the creation of certain types of jobs, which is the demand side.
What most politicians like to talk about is bringing "good jobs" to Philadelphia. That sounds great, but what is a "good job" for a worker with limited qualifications? A recent study by Keith Wardrip, of the Federal Reserve Bank of Philadelphia, helps provide some answers. He analyzed occupations to determine which might pay living wages without requiring high levels of education.
Wardrip calls these "opportunity occupations."
The concept of "opportunity occupations" is simple but powerful: Jobs that don't require college degrees but pay well provide the opportunity for workers to escape poverty. Those are the "good jobs" that Philadelphia policymakers need to target.
Step One, then, is to redefine the term "good jobs" to include those that don't require college degrees but pay well. True, there are not a lot of those, but they do exist. Wardrip estimated that the percentage of good-paying positions that qualify as opportunity occupations is less than 30 percent and may be as low as 20 percent. Nevertheless, firms that hire these types of workers, especially certain health-care and legal companies, should be targeted.
Step Two is to work on the supply side. The skill level of the population needs to be improved. The long-term project is to improve the city's school system. But even if we do everything that the research says makes sense, and fund the system at the highest level possible, and even if student performance rises sharply, this is a process that could take a generation. We need also to consider approaches doable in the more immediate term.
Two suggestions that have come to the forefront are centered on skill training rather than general education.
By working with the business community to identify the skills needed for the opportunity occupations, specialized high schools can be created that prepare students to move directly into the workforce. The business community should guarantee offers to students who successfully complete the program. This latter part is critical, as the students, businesses and the educational community must all have a stake in its succeeding.
A second approach is one that I have been supporting for decades: Community colleges should be technical schools, not general-education institutions. They should become advanced specialized occupational-training schools where, once again, the private sector helps design programs and provides jobs when the student successfully completes an associate's degree.
Economic development is a process that can succeed if the plan matches the city's economic realities. Fostering growth so that jobs are created in the so-called occupation opportunity segment of the economy, coupled with education that targets those positions, could help ease Philadelphia's poverty problem.