The big idea: Combat 'Job Sprawl'

What it means and why it's a good thing:

 

20090428_dn_g128jobs
"Job sprawl" means too many jobs migrate from the city into surrounding suburbs. And that's not good for either place. According to a recent report, Philadelphia ranks fifth-worst out of 98 cities for the number of jobs lost to the surrounding region.

Over the last half-century, the geography of employment has changed radically. Cheap energy, economic subsidies and short-sighted tax policy provided incentives for businesses to locate at, or relocate to, the regions' edges. Now, fewer jobs are in core cities.

Yet even before the recent energy and economic crises, smart leaders recognized that the purported savings of "job sprawl" are - like housing sprawl - offset by significant, if sometimes hidden, costs.

Among them: the need to build new infrastructure, including highways that immediately become clogged with traffic. (See: Blue Route).

In addition, decentralized employment creates a severe imbalance in public transportation - not enough in the suburbs and "edges," underused in the city. Job sprawl leads to what's called "spatial mismatch" between jobs and many workers, especially minority workers, increasing income disparity.

Less tangible, but no less critical: Evidence suggests that the closer jobs are to each other, the more innovation results. For example, patents for inventions increase with job density.

 

How does Philadelphia

stack up?

 

First the good news: The diversity of Philadelphia's economy - which includes universities, medical centers, pharmaceuticals and other high-tech industries, tourism and some manufacturing - has cushioned the blow of the recent economic downturn. The national employment rate declined by 3.3 percent between January 2008 and January 2009, but the Philadelphia metro region's number fell by only 1.7 percent, according to the annual report of the Center City District.

 

The not-so-good news:

 

The Philadelphia region's overall job sprawl ranked fifth worst among 98 metropolitan areas in 2006, according to a recent report by the Brookings Institution. In the Philadelphia-Camden-Wilmington region, 63.7 percent of the jobs are more than 10 miles from city centers. Only 15.5 percent were within three miles of downtown.

At first glance, the decentralization of jobs may seem to benefit the edges of the region; in fact, the reverse is true. A multitude of studies show that suburbs can't thrive when their core cities are in distress. In fact, when incomes rise in cities, so do incomes and home prices in the suburbs.

 

Best example:

 

Forward-looking policies in Pennsylvania, including a 2004 law requiring 18 percent of the state's electricity to come from renewable sources by 2021, attracted Gamesa, a Spanish wind-technology firm, to the state. Gamesa located its first North American plant in Pittsburgh in 2005 and has expanded to the old Fairless Hills steel site, and put its U.S. headquarters in Philadelphia. That's an investment of $200 million and 1,000 good jobs, aided in part by a partnership with the steelworkers' union.

 

Worst example:

 

In 2003, as part of an earlier Brookings study on job sprawl, the Keystone Research Center, based in Harrisburg, tracked $719 million dollars in economic development subsidies spent to create jobs in Pennsylvania. It found that the subsidies favored job sprawl. Among the most notable and expensive missteps was a $12 million opportunity grant to the Vanguard Mutual Funds in 2000 to build a center in Chester County, when average grants were $296,000.

 

What the feds can do:

 

The infusion of stimulus and 2010 federal budget money has the potential to begin reversing the job decentralization, but only if the federal government provides incentives for state and local leaders to break down the "silos" that isolate job creation investment from considerations like transit, education and housing.

 

What we can do:

 

The city needs to do more to encourage businesses to start here and then to stay as they grow says Steven Wray, executive director of the Pennsylvania Economy League said. Among the first steps: changing the tax structure. The business privilege tax can be especially punitive to start-ups, Wray said.

It's also important to continue the strategy called the Keystone Principles, adopted in 2005, that coordinate state development investments across state agencies. According to Stephen Herzenberg of Keystone Research Center, which is about to release an update of its 2003 study, significant change in the use of economic subsidies - away from favoring job sprawl and toward aiding older core cities - reflects a coherent approach to creating jobs and reducing sprawl. (Track state investments at www.keystoneresearchmap.org).

 

Big (local) names in the field:

 

Steve Herzenberg, Keystone Research Center.

Andrew Altman, Deputy Mayor for Planning and Economic Development.

Steven Wray, Economy League of Greater Philadelphia. *