Friday, September 22, 2017

At Issue: Jobs in Philadelphia and how to grow them

Philadelphia was once known as "Workshop of the World." But taxes on business profits and employee wages have dampened the climate for job growth.

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Jobs

It's 2015:
What do you care about?

The race for who becomes mayor is always about the issues.

The Next Mayor will be providing background and updates on news and information on the biggest issues facing the city.

We want to hear from you about what you think is critical for the next mayor to handle.

The Big Picture

Everyone agrees the city needs more jobs to grow and prosper, but the goal remains elusive.

Details: The best thing that can be said about the jobs picture in Philadelphia is that the rate of decline has slowed in recent years. Between 2000 and last year (2014), the city lost 28,000 jobs, the lowest decrease in the last four decades. (The worst was the 1970s when the city lost 138,700 jobs.)

According to the U.S. Bureau of Labor Statistics, there were 668,000 jobs in the city as of December of last year. This was down from 696,000 jobs in 2000.

The BLS divides employment into 10 broad categories. Between 2010 and 2014 Philadelphia saw a decline in seven of the 10. Manufacturing led the way, losing 51 percent (-22,100 jobs) during the period. The two bright spots were education and health care, where jobs increased 21 percent (from 174,100 to 211,100 jobs) and the leisure and hospitality services sector, which had a 14 percent increase (from 57,000 to 65,000 jobs.)

Fewer jobs mean fewer taxpayers, and fewer taxpayers mean less money to fund city government and its related services.

 

Big Battles

Philadelphia vs. the world: Once the city was known as the Workshop of the World, with a large number of industries. Over time, these manufacturers migrated first out of town, then out of the region, and finally out of the country. Closer to home, the city must compete with other locales that offer financial incentives for businesses to locate in their states or towns.

It's hard for a city with high business and personal taxes to compete. As the 2003 Tax Commission put it: "The evidence we reviewed...persuaded us that Philadelphia's unique tax structure has fundamentally damaged the city's economy." No one has challenged that conclusion.

Philadelphia is one of the few cities in the nation to tax business profits and to impose a tax on workers' wages.

Demand for services vs. lower taxes: While economists and other experts believe lower taxes will stimulate the growth of jobs, the public is divided. Polls show that given the choice between lower taxes or more city services, Philadelphians are evenly divided.

Candidates often call for lower taxes. As one put it in 2007, "We cannot grow or even preserve our revenue base unless we cut and reform the taxes that have accelerated a half-century of decline Philadelphia."

That was Michael Nutter. After elected (and faced with a damaging recession), Nutter raised a variety of taxes, including: the real estate tax, the sales tax, and imposed a $2-a-pack cigarette tax, in the name of helping the city and the public schools. For a time, he even froze small reductions in wage and business tax rates begun under Ed Rendell.

 

What's at stake

There is a consensus that our tax structure harms job growth and that case-by-case tax incentives to attract businesses to the city is not enough to reverse the trend of the last 40-plus years. Our strongest employment sectors—education and health care—are the ones that operate tax free. As nonprofits, hospitals and schools are exempt from property, business and sales taxes. 

The next mayor will have to balance the very real demands for city services with a tax policy that encourages job growth. Few mayors have succeeded even in making a dent in the problem. Listen carefully as the mayoral candidates give their views on how to grow jobs.

Below is the latest graphic from Pew Charitable Trusts on job creation in Philadelphia. Learn more about Pew’s ‘State of the City’ research here.

 

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It's 2015:
What do you care about?

The race for who becomes mayor is always about the issues.

The Next Mayor will be providing background and updates on news and information on the biggest issues facing the city.

We want to hear from you about what you think is critical for the next mayor to handle.

The Issues

Below are the top issues based on a survey conducted in 2014 by the Philadelphia Daily News and Temple University.

Email us your thoughts >>

Crime
76%
Education
76%
Poverty
72%
Jobs
68%
Political Corruption
57%
Housing
52%
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