Philly poverty rate sees largest drop in 10 years, but we’re still the poorest big city

Philadelphia’s poverty rate fell more than one percentage point between 2022 and 2023, marking the most significant year-over-year decline in a decade, according to data from the U.S. Census Bureau.

The share of people living in poverty declined from 21.7% in 2022 to 20.3% in 2023. That number has declined or remained stagnant every year since 2011, when the rate peaked at 28.7%, or more than one-quarter of the city’s population.

By official measures, Philly residents are more well-off than they’ve been since at least 1979.

Despite the decline, Philly still maintained its status as the poorest big city in the nation. The second-poorest city, Houston, is trailing by less than a percentage point, a gap comfortably within the survey’s margin of error.

The official poverty rate can go down for a number of reasons, said Emily Dowdall, president of policy at Reinvestment Fund.

This is what to know about Philadelphia’s declining poverty rate.

Among the 10 largest American cities, Philadelphia has the largest share of its population living below the official poverty threshold. Other cities on the list were Houston, New York, San Antonio, Chicago, Los Angeles, Dallas, Jacksonville, Phoenix, and San Diego.

Philadelphia is not the poorest city of any size in the nation, or even the poorest of the top 25 most populous cities in the nation, according to U.S. Census Bureau data.

The U.S. Census Bureau measures the poverty rate by comparing a household’s income with a minimum income required to cover so-called basic needs. That minimum income depends on the number of people in a household. For 2023, it was an annual household income of $30,000 for a family of four.

Census numbers showing about 20% of Philadelphians living below the poverty line means about one-fifth of the city’s 1.5 million people live in a household with a median income below that minimum income threshold.

Technically, yes. The city’s median income broke $60,000 for the first time since at least 1979, adjusted for inflation, according to an Inquirer analysis of census data.

The gap between the city’s median household income and the U.S. median of $77,000 remains large but is narrowing. The disparity is now the smallest it has been in 25 years.

While the nation’s median household income fell negligibly between 2022 and 2023, Philadelphia’s jumped $1,500 over the same period.

It’s hard to nail down one specific reason the city’s share of people living in poverty decreased, Dowdall said.

Poverty goes down when incomes increase, Dowdall said, but a declining poverty rate doesn’t necessarily mean Philadelphia has successfully raised the wages of its poorest citizens. The rate can also move if lower-income Philadelphians are moving to the suburbs or to nearby cities.

“That can feel like less of an accomplishment,” she said.

“There are push and pull factors when we think about lower-income people leaving the city,” she continued.

Philadelphia had been unique in that its suburbs were difficult to access for people with lower incomes.

“For a long time, regional poverty was very concentrated within the city of Philadelphia, more so than you would see in other regions with big cities,” Dowdall explained. If, in fact, Philadelphians are being priced out of the city and moving to nearby suburbs, that would suggest those collar communities are presenting more accessible opportunities for people with less money to spend on housing than before.

The expanded Child Tax Credit, which gave $3,600 to families with children and made the credit fully refundable, helped slash child poverty but expired in 2021. The policy could still be a significant factor in reducing the city’s poverty rate, as were other pandemic-era programs.

The steepest decline in poverty came among Philadelphia children. The share of the population younger than 18 living in poverty fell nearly 4%, to 25%. The poverty rate decline also was not distributed equally among racial groups. While Black and Latino people saw their poverty rates decline, the share of Asian Philadelphians living in poverty increased by about one percentage point, to 19.9% in 2023.

Latino Philadelphians saw the sharpest decline in poverty, from 26% in 2022 to 24.5% in 2023, after seeing a bump in poverty between 2021 and 2022, while the poverty rate for Black people fell by half a percentage point, from 25% to 24.5%.

The white poverty rate declined even more slightly, from 12.7% to 12.5%. The poverty rate for Black and Latino Philadelphians remains about double that of white Philadelphians.

Households with an income 50% below the poverty threshold are considered in deep poverty. Historically, that rate has been more stubborn and stagnant, and in 2023, it didn’t budge at all year over year, remaining at 9.7%, or nearly one out of every 10 Philadelphians.

Official poverty snapshots offer an incomplete picture of many Philadelphians’ lives, said Dowdall. Official numbers don’t factor in households living just above the poverty line.

“Poverty is not a comprehensive measure of people’s day-to-day experience,” she said. “It’s also important to look at people who are housing cost burdened” and paying toward other expenses like child care or transportation.

This census data also does not measure the supplemental poverty rate, which factors in public assistance low-income families receive.