Tuesday, June 28, 2005

Philadelphia’s Economic Future: Part 1

Young Philly Politics is a space for young, active Philadelphians to write about the issues that matter most to them and the future of our city. Most of the contributors to YPP, including myself, are life-long Philadelphians and our passion comes from a generations long attachment to Philadelphia and the region.

Because we are not members of the mainstream media, we are able to spend more time writing in depth about ideas of importance to the city and exploring not just the who, what, when and where that the papers and TV do so well, but also the WHY that is often left out.

To that end, I would like to start a series of posts on Philadelphia’s economic health now and into the future. I think most Philadelphians want to believe in a future that preserves the character and style of our city and is full of opportunities for all. Yet, for those of us who live outside of Center City and a few other neighborhoods, we wake up every morning, look around and see signs of decay. Even for those of who in live in neighborhoods that have already “made it,” we worry that the comfort and security that has been achieved in our communities won’t last.

Philadelphia’s job market, like the nation’s, has become more and more stratified with higher wage earners earning more and lower wage earners earning less. It used to be you could graduate high school or college and be able to pick a career and maybe even a company that would last your entire career. Of course, for people my age this idea is a fairy tale. I am 26 and after graduating from college, I have already had 4 different jobs. Ask anyone under 30 who is not a doctor or lawyer and they will tell you something similar.

Our political leaders have no long-term vision for the city. Even beloved former Mayor Rendell, who some credit with the revitalization of Center City and the self-esteem of the city as a whole, did not have a comprehensive economic development plan that addressed income divisions and job market gaps. These leaders don’t lack vision because of corruption or similarly mundane reasons, they lack vision because it is pretty hard to see that far into the future. Our local and national economies are at a really pivotal moment in time as the last vestiges of the 19th and 20th century US industrial economy are quickly slipping away and no one really knows what's next.

So, with income inequalities, limited quality-job options and an absence of political leadership, what substanative steps can we as a city and as a region take to solve our structural economic problems to solidify our tax base and provide opportunities for all?

That is the question I plan to address over the next few weeks and I guess it is worth saying at the outset that my answer will never be to cut taxes alone. I can already hear it coming and I don’t want to waste a lot of time rehashing the same old debate.

The purpose of my posts will be to look at alternatives to tax-cutting as a solution to structural economic problems. I am taking on this role largely because I think that the role of reduced taxes in spurring economic growth has already become obsolete. Tax reduction alone can not create the number of jobs, encourage the number of industries or create enough of the polices needed to create a high-road economy in Philadelphia that has a tax-base sufficient enough to support citizens and businesses well into the future. There is a role for discussing tax fairness and making sure that city tax policy doesn't worsen income inequality by imposing flat or regressive taxes.

Today’s installment is intended to serve as a brief introduction to the ideas I would like to explore in the coming weeks. I plan to write in more depth about high-road economic development ideas, race and class in Philadelphia, the role of government in spurring economic development, the impact of education on the city’s economy, the role (if any) of tax policy on the city’s economy and practical, progressive solutions that will produce a Philadelphia economy that works for all.

I would also like to invite all readers to use the comment section below to tell me what you would like me to cover in terms of the viability of Philadelphia’s economic infrastructure.

7 Comments:

At 11:54 AM, Blogger Dumplingeater said...

I very much look forward to your future posts on this issue, and hope that the comments won't get bogged down with a debate about tax-cutting. If folks "agree to disagree" on that issue, it could be possible to have fruitful discussions on other economic issues -- the discussions regarding the minimum wage being a good example.

That being said, I just want to point out a bit of an over-generalization in your post. I live outside of Center City, in West-Central Germantown, and when I wake up in the morning, I don't see signs of decay. I see folks investing in improving their neighborhood. (While amazingly, only two blocks away, the decay continues unabated). I see impressive development in the Mt. Airy commercial corridor. As someone who grew up in East Mt. Airy, the number of new, relatively up-scale (but still uniquely Mt. Airy-ish) businesses moving in is very impressive.

I point this out not to correct you, but because I think that examining the conditions in Mt. Airy and pockets of Germantown, and analyzing the overall economic and racial stability (that I've seen) in those neighborhoods over a period of close to 50 years, could be instructive to the debate about development in Philadelphia as a whole.

 
At 3:48 PM, Blogger Friedman said...

Ray - sounds like a very constructive exercise, but won't be comprehensive unless tax simplification and reduction strategies aren't contemplated. Reducing taxes as a means of encouraging economic growth isn't obsolete; tax reductions in Philadelphia - both the broad based wage tax reductions and more targeted abatements - have produced tremendous economic results and are important symbolically. To put it plainly, any economic development plan for Philadelphia that doesn't involve adjustments to the complexity and burden of tax obligations isn't complete.

 
At 4:42 PM, Blogger Omar said...

Geez, the guy just said that tax reductions ONLY won't solve the problem. Tax cuts are important, especially if they are targeted to individuals who desperately need relief, such as middle income earners and small businesses. Of course, lower taxes spurs growth, but so does public investment in our cities as well as other innovative ways that we can "invest and grow" instead of "borrow and spend"

 
At 4:50 PM, Blogger Charles said...

Dumplingeater: It’s funny. I had no idea that you lived in Germantown. And when I read the post that Ray did, your comment was exactly what I was thinking. I grew up in Germantown and still live there today. My parents came here in the 70’s, my Mom going to West Germantown, and my Dad going to the Brickyard.

They have told me stories about the changes over the years, particularly how drugs in the 80’s ruined the neighborhood. I saw the tail end of this. It seemed like all the middle classed progressives moved out of Germantown into Mt. Airy. Now, it looks like they are moving back, which is pretty cool. I have great hope for Germantown.

E. Mt. Airy is weird in the sense that there are pockets that are just like West Mt. Airy, and then there are pockets that are pretty much the Ghetto.

Well, hope to see you in the neighborhood, if I already haven’t. From the looks of your comments, I’d say that you live in Penn-Knox, but that’s just a guess. Email me (charlesdog12(at)yahoo(dot)com) if you want to talk about it more.

 
At 4:52 PM, Blogger Friedman said...

Make a comment not in lockstep with another YPP poster and incur the wrath of another :)

 
At 11:24 AM, Blogger dashrinc said...

taxes are going to go up, and going to continue to go up. center city is urbaniting (condos & lofts), making it very appealing to young proffesionals to live. the biggest tax problem large cities have is that they compete for national corporations to move offices and businesses here by giving tax breaks. which means less tax revenue from corporations and more a burden on homeowners. the less living wage jobs the less families can afford to renavate their homes. their is nothing wrong with a ghetto. neighborhood problems include violence, sanitation, public transportation and lighting. is "ghetto" being used a code for Black?

 
At 6:30 PM, Blogger rox_publius said...

I can't disagree with you all more about the role of taxation on economic growth, but in respect to the wishes of the author, I won't address that here.

The number one single biggest factor in the future of Philadelphia's economy is stopping urban flight. In order to grow, we need people who are invested, financially and otherwise in their community, and not running off to the suburbs leaving the city for those who have no choice. People don't buy houses in abandoned neighborhoods. business startups can't take place in the absence of consumers. our large infrastructure is an asset for a large population - an unsustainable cost among a small number of holdouts.

Now it's my belief that taxation policy plays a big role in that, and I think it would be disingenuous for you all to claim not to know anyone who either didn't move to, or moved out of the city because of taxation. (dammit, said i wasn't gonna do that - can't help myself) Regardless, obviously there ARE a host of other factors, and that's why today's news in the Inquirer is SO FRIGGIN AWESOME!!!

http://www.philly.com/mld/inquirer/12018472.htm

The rate of population loss has slowed for four straight years, and in 2004 was less than 0.5%. This is great news. Now, of course, the goal needs to shift to growing the city, and I'm guessing I'd disagree with a lot of what many folks here have to say on how to do that, but that's for another day.

Anyone who cares about Philly should be throwing a party after this news.

 

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