Pyramid Electric | Photo: Peter Woodall
In a city where nearly one in three residents is poor, yesterday Mayor Michael Nutter set in motion two new initiatives aimed at the seemingly intractable problems of poverty and unemployment. In an expansion and refocusing of the Mayor’s Office of Community Service, he named Planning Commission chair and longtime advocate of the poor Eva Gladstein to oversee what will be called the Mayor’s Office of Community Empowerment and Opportunity. The idea is similar to that behind the Empowerment Zone program, which Gladstein headed up locally: coordinate funding streams, economic development initiatives, and social services to maximize the benefits for the people who need it most.
“When we look at anti-poverty policies, one of the long-standing challenges is coordination,” says Guian McKee, a professor of public policy at the University of Virginia and the author of the 2008 book The Problem of Jobs: Liberalism, Race, and Deindustrialization in Philadelphia (University of Chicago Press). “This provides a device to think about how programs interact, how problems are completely interconnected in people’s actual lives, and how to you develop programs and services that meet the need most effectively.”
On top of the anti-poverty initiative, the Mayor used an executive order to launch a new task force on bolstering the city’s industrial economy, which according to probably overstated statistics employs some 23,000 people. Manufacturing jobs remain highly sought because they still tend to pay better than jobs in the service sector. Policy makers are hopeful to expand the sector, which has shrunk here by 90 percent since even the 1980s, because of recent growth in the craft and maker economy across urban America and because of high profile corporate moves by Apple and others to manufacture more in the US. The task force is to deliver recommendations to the Mayor by the end of August.
McKee notes that “if we can figure out where the viable sectors are, in relation to the geography of distribution channels, in terms of worker skill levels, in terms of intellectual resources, there are definitely possibilities for manufacturing. These aren’t going to be mass production plants that employs thousands of workers–they’re going to be either advanced manufacturing that does high value-added work, or possibly very specialized production that has a very defined market niche. And it will be very competitive to get and keep those firms in Philly.”
For years, starting in the 1950s, Philadelphia, well ahead of its peer cities, sought a proactive approach to reversing deindustrialization. City officials beginning with the administration of Joseph Clark created agencies–chief among them PIDC–land use policies, and initiative aimed at retaining and growing the city’s industrial sector, which had begun to significantly retract in the post World War II period. “The reason Philadelphia still has as many manufacturing jobs as we do is because there were actually some good decisions made in the 1950s-1970s (and beyond), even though we don’t usually think of that as a period of great leadership in the city,” says McKee, who believes Philadelphia officials in that period just weren’t aggressive enough.
Moreover, they failed to connect anti-poverty work with economic development. What’s exciting about yesterday’s announcements, according to McKee, is that “these are two parts of the same problem, and each group needs to see the other’s needs and perspectives.”
Some scholars say that the deindustrialization of that period extending into the 1970s was essentially intractable and no initiative at the local level, no matter how far-reaching, would have mattered. The old cities that ultimately fared best in the late 20th century, New York and Boston, did so because they invested in new economic sectors and education instead of industrial parks and that Philadelphia was held back by its continued industrial focus.
Those behind the Mayor’s new task force are likely to say that the present initiative is meant to exploit going economic and demographic trends not counter them, as City policy of the 1950s-1980s did. McKee imagines that “if you can start to develop cohort of such companies, you can start to build a culture and an environment where they feed off of each other in a good way. Even if none of them employ more than a few dozen people, the cumulative effect can be meaningful. And the secondary effects of manufacturing on suppliers, service providers, and even things like restaurants and real estate can be profound as well.”
And yet, local economic development and anti-poverty approaches are caught in a system of state and federal economic and fiscal policy over which they have little control. These factors threaten to marginalize the potential impacts of the new initiatives.
Philadelphia is a poor city with a high tax burden and a difficult bureaucracy that business investors find repulsive. But to try to lighten that burden in a way that business would find meaningful would mean significantly reducing the support services for the poor that are barely now sufficient and regular services–like libraries and the fire department and parks and rec–for everyone. And anyway, much of the tax burden on businesses in Philadelphia comes from the state of Pennsylvania, which has one of highest corporate tax rates in the nation. That combined with state economic development policy focused on resource extraction for the short term benefit of rural counties leaves Philadelphia and the region, still the economic engine of Pennsylvania, out in the cold.
McKee says Philadelphia needs Pennsylvania as a strong partner in order to make industrial development a real success.
But let’s say Philadelphia, as certain observers have been advocating for years, radically reduces its business tax and regulatory load. Poverty and its impacts will rise even more as City Hall struggles to pay its bills. In the market fundamentalist’s dream, the city goes through a period of instability and pain but the adjustment makes the city attractive to business in the short term and jobs get created, leading to economic revival.
Such a scenario is impossible because it would be morally and politically untenable–unless the federal government, which can impact macroeconomic policy, created a truly progressive tax code, and used the higher taxes to invest in education, worker training, day care, welfare, and infrastructure. In that dream, Philadelphia could risk lowering its tax burden because the federal government would be effectively leveling the economic playing field.
Significant enough change at the state and federal level is unlikely, however, and so Philadelphia remains stuck. What can it do? Yes, rightly exploit every opportunity to create jobs and give people a sense of opportunity and hope–and as McKee says, coordinate the approach to maximum impact.
Beyond that, particularly without a strong partner in Harrisburg, City Hall can only really do one thing: build–build for Philadelphians today, build to attract the Philadelphians of tomorrow. How and what and where we build is in our control; it’s in fact our only powerful lever for the future.
