Income for Black Philly households is stagnant. For everyone else, it’s up almost 25% since 2010.
The median Black household income adjusted for inflation is just $2,000 more than it was in 2010.
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Economic inequality in Philadelphia continues to grow along racial and gender lines — and is following patterns in New York and Boston, two cities with much higher incomes and costs of living, according to a study from the Economy League of Greater Philadelphia.
A declining Black population in the city and a declining poverty rate for Black Philadelphians may also suggest that less-affluent Black residents can’t afford to live in the city and are moving to inner-ring suburbs, said Mike Shields, research director at the Economy League.
“We have a lot more poverty and social issues that [New York and Boston] don’t have,” Shields said, “because they’ve already evolved the method of having so much inequality that no impoverished person can even live in the city anymore, which is an overexaggeration, but, basically.”
Black Philadelphians’ median household income grew at the slowest rate compared to other racial groups between 2010 and 2021, just barely rising above its 2010 levels when adjusted for inflation, according to an Inquirer analysis. While Black median income grew less than 6%, the median income for Asian, Latino, and white households each rose by almost 25% in the same period.
Black households earned more money on average in 2021, but the median Black household income adjusted for inflation is just $2,000 more than it was in 2010. Median household incomes for Latinos, Asians, and white people increased by about $7,000, $10,000, and $15,000, respectively.
Inequality between Asian families and white families narrowed, the Economy League report found.
The study, released at the end of March, used 5-year estimates from the U.S. Census Bureau spanning from 2017-2021 — the most recent available — to analyze household income and earnings for Philadelphians with full-time jobs.
In Philadelphia, the nation’s poorest big city, the median household income grew to $52,650 in 2021, its highest in more than a decade. Nationally, the median household income was almost $70,800 in 2021.
Philadelphia’s Black families brought in a median annual household income of about $39,350, according to the report. Latino households averaged just under that, at around $38,800 annually. White families earned a median household income of just under $74,300, more than $20,000 above the citywide median and almost double that of Latino families. Meanwhile, Asian households had a median annual household income of about $55,900.
Black households earned about $13,300 less than the citywide median in 2021, according to the Economy League report, representing a continued worsening of the income gap for Black residents.
Shields said Philadelphia owes its economic inequality to a number of factors, including job quality and degree requirements for even entry-level jobs, as well as inflation and stagnant wages.
Pennsylvania has not raised its minimum wage since the federal wage was set at $7.25 in 2009. (Gov. Josh Shapiro is pushing to increase the minimum wage to $15 per hour.)
The gender pay gap stayed mostly level over a 10-year period, with white women in 2021 earning $0.88 for every dollar earned by white men. Black men and women earned $0.61 and $0.59, respectively, compared to every $1 for white men, while Latino men and women earned $0.60 and $0.55, respectively.
The largest positive jump was for Asian women, who were the only group to see equal wages compared to men of the same race. Asian men and women both earned $0.75 to every white male dollar. Shields said there’s no clear explanation for this.
One solution to the growing wealth gap, said Shields, is an adjustment to the procurement processes from the city and its anchor institutions such as hospitals and universities.
To do work with those big institutions, Shields said, a business needs “certain connections with accountants, and you need to have a demonstrated amount of revenue per year.” The policy was intended to be blind, but those requirements “actually make it inequitable,” Shields said.
So-called disadvantaged businesses are less likely to have these connections, effectively excluding them from large government and anchor-institution contracting opportunities.
The Economy League launched a program in 2018 that’s designed to build up Black-owned, women-owned, and people-of-color-owned businesses to help them get those large contracts. Shields said his organization is working on research that proves that Black and POC-owned businesses are more likely to give jobs to people from their communities, creating good-paying jobs for Black people and people of color.
For Mohona Siddique of the Aspen Institute, access to quality jobs is also critical.
Siddique, associate director at the Aspen Institute’s Economic Opportunity Program, said the United States “has a job quality crisis.” Too many jobs have low wages and poor benefits, and lack professional mobility.
Policy and system changes are underway to try to tackle this issue, Siddique said. In January 2022, the federal Department of Labor announced its “Good Jobs Initiative.” The program has worked with other agencies in its first year to provide more than $97 billion in grant funding aimed at incentivizing “good jobs.”
Locally, the Philadelphia Department of Commerce announced last month the city’s “Quality Jobs Program.”
A grant initiative, the program gives small businesses $5,000 per new, full-time job created, up to $125,000. Eligible jobs have to be located in Philadelphia and offered to city residents, and must be full-time and pay at least $15 an hour through June 2023, according to the city. The job must also come with employer-sponsored health insurance and paid time off.
That program does not specifically target Black and POC-owned businesses or workers, said Commerce Department spokesperson Nagiarry Porcena-Meneus.
“Often, when we center workers, there is this political narrative that there is somehow a trade-off and that what’s good for workers is not good for business,” Siddique said. “That’s just simply not the case.”