Skip to content
Link copied to clipboard

Surprisingly good economic news for most of the Philly region

Higher wages for professionals and a jump in the number of low-end jobs combined to give the income of Philadelphians a surprising boost in 2015.

Higher wages for professionals and a jump in the number of low-end jobs combined to give the income of Philadelphians a surprising boost in 2015.

The 5.5 percent spike in median household income jibes with a similar rise nationwide.

Most of the suburbs also enjoyed satisfying income bumps, with Delaware County leading the way with a robust 7.2 percent increase. Of Philadelphia's surrounding counties, just Burlington and Gloucester registered income shortfalls.

The data come from the U.S. Census American Community Survey released Thursday. All figures are adjusted to 2015 dollars.

Economists say that a good deal of the Philadelphia income increase was attributable to a rise in the salaries of science and technology workers, as well as to a jump in the number of home health aide jobs at the lower end of the scale. The spread of construction cranes across the cityscape - a sign of jobs for all trades - also accounted for the income change.

The numbers weren't all positive. The city's poverty rate remained nearly stagnant in 2015 - around 26 percent - keeping Philadelphia the poorest among the country's most populous cities.

And as incomes dropped in the city of Camden, poverty soared.

An Inquirer calculation of census data found that Philadelphia had a 12.1 percent rate of deep poverty - a measure of people living at 50 percent of the poverty line or less. The deep-poverty rate, too, is the largest of the 10 biggest cities.

"It's clear the improving economic tides are not lifting all boats," said Kathy Fisher, policy manager of the Greater Philadelphia Coalition Against Hunger.

Median household income in Philadelphia jumped from $39,092 in 2014 to $41,233 in 2015, a 5.5 percent increase of $2,141.

Across America, the median household income rose from $53,700 in 2014 to $56,500 in 2015, a 5.2 percent increase - the largest recorded by the Census Bureau since the 1960s, when income analysis began.

And, unlike in Philadelphia, the U.S. poverty rate fell by 1.2 percentage points, the largest annual percentage drop since 1999.

"In Philadelphia, for the poor, absolutely nothing has changed," said Steveanna Wynn, director of SHARE, which distributes food to food cupboards throughout the city. "Need is not ebbing."

Between 2014 and 2015, the city's poverty rate dipped just 0.2 percentage points, from 26 percent to 25.8 percent, a statistically meaningless difference.

In Pennsylvania, the median household income rose from $53,290 in 2014 to $55,702 in 2015, a 4.5 percent change.

In New Jersey, the figure inched up from $71,994 to $72,222, a 0.3 percent rise.

Regarding poverty, Pennsylvania dropped from a rate of 13.6 percent in 2014 to 13.2 percent in 2015. New Jersey's drop from 11.1 percent to 10.8 percent was not statistically significant.

Overall, the income news was cheered.

"The city is doing exceptionally well, particularly by the city's standards," said Mark Zandi, chief economist with Moody's Analytics.

Such news can spark good feeling that translates into dollars being spent, which nudges the economy forward.

"The increase in income makes people feel better and causes them to be more aggressive in spending, and in expanding business," Zandi said.

He warned, however, that the happy tidings could be overstated.

The 5.5 percent income increase may well be only a one-year windfall to households. The numbers were driven by low inflation and sharply lower gas prices between 2014 and 2015 - and that might not be repeated, Zandi said.

Drexel University economist Paul Harrington said some of the growth in median household income is explained by educated workers in the high-end scientific and technical industries seeing wages rise.

An Inquirer analysis of census figures shows that the largest jump in Philadelphia income was seen among households with median incomes of $100,000 or more. The number of such households increased from 14.8 percent to 16.8 percent.

"The good news," Harrington said, "is that college kids graduating should try to work in science and tech."

Much of the increase in Philadelphia median household income was driven not by higher wages, but by an increase in the number of jobs in the low end of the economic spectrum, Harrington said.

These, he said, are mostly people making around $10 an hour in the field of home health care.

"We are getting growth at the bottom," he added. "We're not getting many net wage increases at all. The growth we see is really poor and near-poor people caring for people in their homes."

Angela Sutton, 40, of Northeast Philadelphia, is one such worker. Employed just a few months as a home health aide caring for an elderly woman, Sutton makes $15 an hour after having been long unemployed.

"I'm blessed - it's really been good for me," said Sutton, a single mother of children ages 9 and 15. "Working takes the stress off, and I'm able to get things now I couldn't before."

Also helping incomes rise in Philadelphia and the surrounding region, Zandi said, were jobs in residential and commercial construction, as well as in hospitality and tourism. Harrington said the city has experienced an increase in restaurant and bar employment.

Attempting to explain Delaware County's strong rise in household median income, Villanova University's David Fiorenza said the gains were likely carried by the county's more affluent towns, such as Radnor Township and Media Borough.

In places like Media, said Fiorenza, a municipal finances specialist, there's been a large push to promote the downtown, which has a seen a resurgence in restaurants and local events that eventually boost housing values.

Also, he said, wages rose for people in the heating, ventilation, and plumbing industries.

On the other end of the scale, experts were hard pressed to explain the plight of Burlington County, which registered a 7.7 percent decrease in median household income between 2014 to 2015, from $80,997 to $74,800, down nearly $6,200.

Similarly, poverty rates went up nearly 1 percentage point in the time period.

"I'm really surprised that those are the numbers because we see new growth going up in our county," said Kristi Howell, president and CEO of the Burlington County Regional Chamber of Commerce. She cited Amazon opening a warehouse in Florence as an example of big business helping the area.

Jon Whiten, vice president of New Jersey Policy Perspective, a left-leaning think tank, said New Jersey has not kept pace with the rest of the country in rebounding from the recession.

In impoverished places such as Camden, poverty has taken a decades-long toll.

The median household income there dropped from nearly $29,000 in 2014 to $25,643 in 2015. The poverty rate, meanwhile, rose from 36.5 percent to 40.5 percent in the same period.

One reason for the poor numbers could be the decline in Camden's population, said Gwendolyn Harris, executive director of the Rand Institute at Rutgers University - Camden.

"Basically, people who can afford to have moved out," she said. "It's not so much that the people within Camden are getting poorer. It's that the pool where you take the median from has gotten smaller."

In Philadelphia, Mitch Little, executive director of the Mayor's Office of Community Empowerment and Opportunity, said that although poverty numbers are dire, "we are trending in the right direction, and I'm cautiously optimistic."

Zandi was not so sure. Other cities in the country are doing better than Philadelphia in the fight against poverty because they have raised the minimum wage, he said.

Also, local schools are "a mess," he said, which hurts the earning power of many households. He added, "We will be at the bottom of the list for poverty for generations if we don't fix the schools."


Staff writer Luis A. Ferre Sadurni contributed to this article.