A third of self-employed entrepreneurs in Philly are immigrants, and other insights from new Pew reports

Philadelphia’s workforce has grown, and immigrant workers have been a significant contributor, accounting for about one-third of the increase in the city’s overall employed labor force since 2010.

The city’s immigrant workforce grew 50% from 2010 to 2022, from 105,600 to 158,300, according to a new series of reports from The Pew Charitable Trusts. Half of these workers are making less than $36,300 per year, and a disproportionate number of them have chosen self-employment by starting a business.

“Immigrants are playing an outsized and increasing role in Philadelphia’s economy,” said Katie Martin, a project director at Pew.

The workforce data runs parallel to an overall increase in the number of immigrants living in Philadelphia. In 2022, 15.7% of the city’s population was foreign-born, The Inquirer reported earlier this year, which represents the highest rate in decades. The city’s U.S.-born population, meanwhile, has been shrinking.

Here are a few takeaways from Pew’s reports:

As the number of immigrant workers in Philadelphia has grown, the percentage of Philadelphia immigrants living in poverty has also declined, from 24.7% to 19.6% from 2010 to 2022. The percentage of U.S.-born Philadelphians in poverty has also declined during that time, to 22.1%.

At the same time, among all Philadelphians living in poverty, the percentage of immigrants grew from 11% in 2010 to 14.5% in 2022.

About half of the city’s immigrant workers earned low wages — defined in the report as less than $36,300 annually — between 2018 and 2022.

Some 30% of Philadelphia’s immigrant workers made over $54,400 per year during that time, which the report defined as high wages. Less than 20% made between $36,300 and $54,400.

Median household income for immigrants in Philadelphia was $54,900 in 2022, and for U.S.-born Philadelphians it was $57,000. Both of those median incomes were lower than in other East Coast cities, such as Baltimore and New York.

Pew found the most common jobs for the low-wage earners included preparing food, health-care support, and driving trucks. High-wage earners were typically employed in professional and technical roles, such as doctors, nurses, and data and information specialists.

Language proficiency and education level appeared to be closely linked with pay, the Census data showed.

Around nine out of 10 high-wage earners spoke English well, compared to three-quarters of those who made between $36,300 and $54,400.

One-third of the low-wage earners said on Census surveys that they struggle with English.

Over half of low-wage earners had a high school diploma or less, while two thirds of the high-wage earners had a bachelor’s degree or more.

About a third of self-employed business owners in Philadelphia are immigrants, according to Pew, about 21,000 people in 2022. That’s a disproportionately large amount considering immigrants make up 15.7% of Philadelphia’s population.

That group includes Philadelphia immigrants with one or multiple small businesses, in Philadelphia or outside the city, who work at least 15 hours a week, Pew said.

The report notes that it did not identify how many of these business owners are engaged in “necessity entrepreneurship,” in which people might start a business because they have few other employment options, due to their education level or language proficiency. Lack of work authorization and or discrimination can also be a factor, the report said.

People who are entrepreneurs by necessity are less likely to expand their business and less likely to pass it on to their children, the Pew report said, citing business advocates.

Philadelphia immigrants from Brazil are disproportionately likely to start a business. While Brazilians make up just 3% of all Philadelphia immigrants, they comprise 9% of self-employed immigrants in the city. Immigrants from Guatemala and South Korea also had high rates of entrepreneurship.

Philadelphia’s largest immigrant groups are from China and the Dominican Republic, and they make up proportionally large shares of the self-employed immigrants.

Pew’s report noted that, throughout the U.S., immigrant entrepreneurs often hire other immigrants who hail from their same home country, and speak the same language, which can mean some industries have many workers of a particular nationality. In Philadelphia, for example, many immigrants born in Brazil and Guatemala work in construction roles, the report said.

The majority of self-employed immigrant entrepreneurs — 57% — had a high school education or less, compared to 27% for U.S. born entrepreneurs.

About 40% of the self-employed immigrant business owners also said they struggled with English. For comparison, 25% of immigrant workers that are not self-employed entrepreneurs reported struggling with English.