Paul Levy, CEO of the Center City District, said that new leaders in City Hall are crucial to Philadelphia's growth as a city, and will help overcome the lingering economic challenge caused by the Covid-19 epidemic.
Levy acknowledged Philadelphia's persistent challenge to add jobs for many years. He believes that it is more relevant today as the city attempts to shake off the shackles which have restricted the economy in the last three years, and a new Mayor and re-designed City Council will arrive in 2024. Levy says that while some sectors are recovering faster than others, more jobs will be the key to a complete revival.
Philadelphia's annual rate of job growth was 1.1% from 2009 to 2022. According to the Bureau of Labor Statistics, Philadelphia ranked 25th among 30 major U.S. Cities.
But I believe it is more urgent now than ever before.
Center City's population, including those who live there and attend conventions or visit the city, has returned to 2019 levels. Center City District data shows that the number of people in Philadelphia's business district is still 47% below 2019 totals. The office vacancy rate increased to 18.6% by the end of 2022.
Increased employment would compensate for the drop in office workers. It would also help to reduce poverty, and build on Center City's strength of diversity of land use downtown.
Levy stated that there are many reasons for the high poverty rate in the city, but one of them is the low business density. Other factors include low opportunities, low growth, and a lack of jobs to support a family. '... This is directly related to the job density.
According to the U.S. Census Bureau, Philadelphia ranked sixth among 18 major cities in the United States for downtown employment density. Levy cited the slow growth in jobs as a potential area for improvement.
Levy describes Philadelphia as a "slow-growth" city. This allows it to remain stable during economic downturns, but also prevents him from seeing the growth that he would like to see.
Levy explained that when you don't have a lot of large businesses, it's the smaller companies who will be the ones to hire advertising agencies, consultants, accountants, and lawyers. Our low density of large companies reduces contract opportunities for smaller businesses.
According to the report, Philadelphia is at a disadvantage because the local suburbs are more densely populated with businesses.
Levy added that more jobs located outside of the reach and accessibility of public transportation further disadvantaged already-disadvantaged workers. Levy noted that the density of Black-owned business in Philadelphia was lower than other cities.
The increase in remote work and the wage and business tax, combined with the rise of remote workers and companies, has further pushed businesses and employees away from Center City.
In Philadelphia, the wage tax is 3,8%. However, it is usually around 1% for suburbs. Levy likened these taxes to an ever-present cloud that hovers over a field.
Levy asked: 'How can you communicate what people cannot see, namely the lack of jobs that do not grow due to the incentives of being elsewhere?'
Levy praised the City Council for its decision to lower wage and business tax rates last year. He anticipates that the City Council will revisit the issue of a possible tax cut this year.
Strategic investments could be used to attract and grow businesses. The convention center being built and universities investing research are two examples of strategies that have sparked industry success.
Levy says that companies looking to Philadelphia from outside are drawn by the city's educated workforce, affordability, cultural amenities, and geographic location. It's not enough.
Levy stated that a tax structure that is not competitive erodes our ability to compete. I think that if we had more amenities in the city, many more businesses would grow here.
Levy, despite the pessimism that surrounds the city believes that there is a solution to help the recovery.
He said that a more robust growth of jobs in the city would solve many problems.
The State of Center City Report also includes:
Center City’s population will be 35% higher in 2023 than in 2019. This is because Center City and the adjacent areas are responsible for most of Philadelphia’s new housing stock.