The United States has seen its share of outstanding economic news lately. Nationwide, unemployment is down to 3.9 percent, the lowest level in decades. In August, wages grew 2.9 percent compared to a year earlier, the 95th consecutive month of wage growth in the U.S. Two weeks ago, a Census report shows that poverty rates declined in nine out of the nation's 10 largest urban centers from 2016 to 2017.
The city where poverty didn't decline? Philadelphia, which also has the highest poverty rate out of the group. When the nation as a whole seems to be doing well, and the poor in peer cities are making progress, why are Philadelphia's poor being left behind?
Given the improvement elsewhere, it's worth asking what our local leaders are doing to solve the problem of intergenerational poverty. After the Census report, Mayor Jim Kenney offered a list of actions he's taking. What Kenney doesn't realize is that his own policies are exacerbating the problem, not alleviating it.
Kenney cites the Philadelphia Beverage Tax as one of his core achievements in fighting poverty. Kenney's administration initially claimed that revenues from the beverage tax revenue would finance an expansion of the city's pre-K program and its community schools (which is, of course, the best way to pass a new tax). Yet earlier this year, the city controller reported that three-fourths of the revenue are being held in the General Fund; Kenney now says that the pre-K program will be scaled back by 1,000 spots.
Kenney says he is ensuring "every Philadelphian has quality schools in their neighborhood," but he has yet to provide enough funding to repair Philadelphia schools with flooding halls and collapsing ceilings. And due to inadequate funding, libraries, a critical component of developing young students' reading skills, close earlier and more often in neighborhoods with high poverty rates — the exact neighborhoods that need investment in education. Given that even Kenney realizes that many residents use these libraries' internet to apply to jobs and find opportunity, it's surprising he hasn't provided resources to improve access to the library system.
Kenney touts his achievements in expanding access to affordable housing, noting that a whopping 600 families have moved into city-supported affordable housing. Yet he doesn't acknowledge the real problem driving housing prices higher: inadequate supply. Inadequate supply of housing units has been shown to increase prices, just as in any market. And Harvard University's Joint Center for Housing Studies has found that Philadelphia needs more than 116,000 new units to meet current demand, much less future growth. The problem has grown worse under Kenney's administration, as fewer permits have been granted than are needed. The real solution isn't city-supported affordable housing for 600 families in a city of millions; it's allowing developers to construct enough housing to meet demand.
These policies — a new tax not being used for those in need and tight restrictions on housing development — have hurt Philadelphia's poor community more than anyone else. The absence of more effort to alleviate poverty calls into question Mayor Kenney's commitment to the working class.
There's a better way to solve intergenerational poverty in Philadelphia.
Philadelphia needs to get serious about attracting business and jobs. A recent report suggested that Kenney's administration offered $2 billion in tax incentives for Amazon to build their "HQ2" here, though the administration has fought to keep the exact number a secret. If Kenney is willing to spend $2 billion on 50,000 Amazon jobs, why not devote those same tax incentives to non-Amazon businesses that want to hire here?
Those new workers will lift all of Philadelphia when they buy local services, pay sales taxes, and contribute to a newly-thriving economy. And with the right investments in education, the next generation of Philadelphians will have 50,000 more high-quality local jobs available. It's true that bringing in new workers will drive up demand for housing units and further increase prices, but that too can be solved if Kenney takes action to speed the permitting process for new housing. This way, new workers won't displace current residents.
Kenney is right that solving intergenerational poverty is a long-term challenge. We need more than a soda tax that hasn't been used as promised or 600 affordable housing units. We need to build enough housing and infrastructure to support our growing city. We need to invest in our people and invite the world to do business here. If we do, we'll open far more opportunity for future Philadelphians than we will under our current path.
Jacob Marco is a current JD/MBA candidate at the University of Pennsylvania, and formerly consulted state and federal governments on a variety of issues, including economic development.