Philadelphia a city of extremes: High incomes, high poverty, report shows

Philadelphia is becoming more and more a city of extremes, with prosperity growing in some neighborhoods and poverty deepening in many others.

That’s the takeaway from the U.S. Census Bureau’s American Community Survey (ACS) Five-Year Estimate for 2014 through 2018, released on Thursday morning.

The survey looks at poverty and median household income by neighborhood over five-year periods, and is considered to be the most granular and thorough federal report of socio-economic factors within communities.

Compared to the first Five-Year ACS, which covered 2005 through 2009 (including the recession years), the new report shows that incomes rose in 15 Philadelphia neighborhoods and fell in 39, including every section of the Northeast except Bridesburg.

At the same time, poverty decreased in 17 neighborhoods and jumped in 38 others.

While improvements brighten Philadelphia every day, with new houses going up around Temple University, in Point Breeze, and in Kensington, there remains a dense mass of poverty that seems to exert a gravitational pull on a city otherwise poised to soar.

“Philadelphia embodies the problem of the gap between the haves and have-nots,” said Mark Zandi, chief economist at Moody’s Analytics. "If you took a snapshot right now, it feels like trends are moving in the right direction, with places in the city coming alive with development.

“But broadly speaking, the city is struggling with poverty, and it’s not gotten better in the last decade.”

To be sure, there are incremental advancements to note with some optimism: The city’s poverty rate declined from 25.7% in 2016 to 24.5% in 2018, federal figures show. And overall median household income (adjusted for inflation) increased from $43,372 to $46,116.

But the Five-Year ACS is “a terrible bit of news,” said sociologist Maria Kefalas, a poverty expert at St. Joseph’s University. “We can have a lovely lunch in a nice neighborhood like the Graduate Hospital area while the rest of the city goes into catastrophic free fall.”

As neighborhoods such as Point Breeze gentrify, disenfranchised residents who can no longer afford the rents are forced to relocate. Experts say it’s possible that gentrification accounts for 5,326 people in poverty moving into Lawncrest since the first survey — the largest single increase of low-income people in the city.

Gentrification piles “even more people in poverty into a handful of areas already weakened and under pressure,” Kefalas said. "You then have concentrated, concentrated poverty.”

Illustrative of the city at its apex, the Graduate Hospital area (also called Schuylkill/Southwest Center City) registered a 58% increase in income between the first Five-Year ACS and the new report: from $64,565 to $101,834, the highest median household income in the city.

“This is a sophisticated place, with more established people,” said resident Mary Addison, 26, a graduate student at the University of Pennsylvania who enjoys the neighborhood of in-vogue shops and sumptuous homes. “Most people are a little older and dress well. The cars are nice, also.”

On the other end of the scale, the largest income decreases occurred in Hunting Park (down 29% to $23,842), Tioga/Nicetown (down 28% to $21,269), and Southwest Philadelphia (down 27% to $27,433).

The lowest median household income in the city, $18,722, was recorded in Fairhill, which also has the highest poverty rate at 55%.

That’s down from 63% in the 2005-09 Five-Year ACA, but it’s “hardly a victory” to say that 45% of a neighborhood isn’t poor, said Emily Dowdall, policy director of the Reinvestment Fund in Philadelphia, a financial institution that helps low-income residents.

“How do people ignore how bad this place is?" asked Siria Rivera, 34, the newly installed executive director of Fairhill’s Providence Center, which offers education programs for children and adults in the ravaged neighborhood of meager chances. Rivera was born in Fairhill, but grew up in Camden and Pennsauken. “We are servicing families with PTSD just from living in a community like this — no space, no heat, no food, no quiet time.

“How isn’t this a focal point in political campaigns? How could it not be more in the news? We have resources to help people, but without cars or bus passes, how do they get to us? I see signs of distress in children here I don’t even have funding to address.”

Enormous inequality exists between places such as Graduate Hospital and Fairhill, said Judith Levine, director of the public policy lab at Temple. “Fairhill’s poverty is astronomical and is a real crisis,” she said. Levine said a child’s life chances depend on where he or she grows up. What chances, Levine asked, does a Fairhill child have?

Low-income gentrification refugees are flocking to still-affordable neighborhoods such as West Oak Lane, driving poverty levels there up from 13% during the first Five-Year ACS to 23% during the current one, experts say.

Like fearful passengers vying for space on a shrinking armada of lifeboats, a diaspora of formerly housed residents are washing up in other neighborhoods, doubling with friends and family, Dowdall said.

“It can put so much pressure on a place like West Oak Lane,” she added.

Tour the city by bicycle to get a better understanding of how much communities change within short distances, said Glenn Bergman, executive director of Philabundance, the region’s leading hunger-relief agency. You come away with a big question: “How can there be so much poverty so close to such development?”

The Five-Year survey lays bare that paradox.

“One neighborhood and another can be like two different countries,” said economist Neeta Fogg, research professor at the Center for Labor Markets and Policy at Drexel University.

“We see the city improving, but it’s sad that no matter how well the economy is doing, there is a segment of the population that is not being helped — the persistent poor mired in a stubborn poverty that always seems to make up about one-quarter of the population.”

Even though, as Dowdall points out, the number of Philadelphians in the labor force is up 10% since 2009, there is a persistently disconnected group that is not working and may never find a job.

“It’s a problem often among young people here,” Fogg said. “Many dropped out of high school and never got work. If you start off detached from the labor market, you will never get in it.

“They say a rising tide lifts all boats. But if you’re not even in the water, your boat does not rise.”

It should be pointed out that even though more people are working, they are laboring for small salaries in service jobs that offer little future, said Kathy Fisher, policy director at the Greater Philadelphia Coalition Against Hunger.

“Much of the job growth in Philadelphia is concentrated in low-wage positions, and many seniors are living on a fixed income," she said. "People need help just to afford the basics.”

City officials say they understand the problems.

“We celebrate this period of growth in Philadelphia,” said Maari Porter, deputy chief of staff policy and strategic initiatives in the mayor’s office. “But we need to move faster to get people out of poverty.”

Porter said that initiatives such as free pre-K classes, down payment assistance for first-time home buyers, more affordable housing options for people who are homeless, increased funding for the eviction-prevention program, and greater investments in schools are making a difference. The city also works hard to make sure people sign up for government-aid programs for which they qualify, Porter said.

“We are focused on economic growth in the neighborhoods without displacement," she added.

An important goal, said Ashley Putnam, director of the economic growth and mobility project of the Federal Reserve Bank of Philadelphia, “is to increase income and access to the jobs that provide economic security.”

How to get there is hard to say.

“People face so many barriers,” Fogg said. “How to get them working and moving forward, well, that is a Nobel Prize-winning question.”