TCB June 2025
Philadelphia Doesn’t Need Another Economic Growth Strategy. It Needs a Poverty Reduction Game Plan.
Kenyatta James, Deputy Executive Director, Economy League of Greater Philadelphia
Living in poverty feels a lot like surviving a disaster. Life is constantly frantic. You don’t know where the next blow will come from. The systems that are supposed to make life enjoyable—or even just manageable—stop functioning. Instead of planning for the future, you focus only on the next emergency. Poverty destroys your ability to make good decisions, breaks apart families, and drains the energy needed for change. It leaves people angry, tired, and depressed. In that state, the chances of hurting yourself—or someone else—rise dramatically.
That’s how 22% of Philadelphians experience life every day.
And yet, when we talk about the economy in this city, we tend to frame it through a growth lens. We talk about GDP, innovation, new developments, and entrepreneurship. In my role as Deputy Executive Director of the Economy League of Greater Philadelphia, I’m in constant conversation with leaders about economic growth—whether it's with the Mayor's Transition Team or at the Philadelphia Equity Alliance’s Saturday Morning Group meetings.
But here’s the uncomfortable truth: economic growth doesn’t automatically reduce poverty. People stuck in poverty can’t reach outside of their circumstances to take advantage of new high paying opportunities if they don’t have the education, networks, and resources to get these positions, no matter how many we create. Poverty has to be reduced intentionally, through policies and programs that target the people who need it most.
The good news is that the reverse is often true: reducing poverty leads to economic growth. When people have stable housing, quality childcare, and higher wages, they are more productive, healthier, and better positioned to support local businesses. But these gains take time and are often invisible to the economic development playbooks that guide city investment.
So how do we reduce poverty?
It’s simple, in theory: We get more money to poor people. We can do that in two ways:
Raise the income of our lowest-paid, most insecure workers
Reduce their largest unavoidable costs – childcare and housing
Boosting Income from the Bottom Up
Raise wages for the city’s lowest-paid employees.
The City of Philadelphia is one of the region’s largest employers. Raising entry-level wages would directly lift up thousands of households concentrated in historically disadvantaged communities. It would improve service delivery by helping fill staffing gaps and reduce turnover in essential departments like sanitation, libraries, and human services. It’s not cheap, but it’s doable: once Philadelphia gets its pension windfall in 2033, we could redirect the sales tax surcharge used for pension relief to sustainably support better wages—without creating a new tax. If the City is to position itself as ‘model employer,’ it should ensure that no one on its payroll is paid below a living wage; in addition, it ought to ensure that every contractor funded by city dollars pays not just the 150% of minimum wage as required under the City code, but pays a true living wage - $23.62 an hour or 48,380 a year for a single person, per MIT’s Living Wage Calculator for Philadelphia. As of Q4 2024, roughly 20% of City employees – 6,300 of the 31,000-member workforce - earned less than $48,300.
Partner with anchor institutions to raise the floor.
Hospitals, universities, and other major nonprofits are the economic engines of Philadelphia—and they employ tens of thousands of food service workers, custodians, security guards, and aides. By working with them to raise pay for their lowest-paid workers, we not only help those individuals; we help stabilize neighborhoods, boost spending in local businesses, and reduce reliance on public assistance. Some institutions took the admirable step of implementing a $15 an hour minimum wage around the same time Amazon did in 2018, but there are still far too many workers at our major institutions earning less than $23.62. Tools like tax credits to reward firms that pay a living wage, public recognition, and collective goal setting can drive this change. There are also many instances where institutions can use their leverage to push their suppliers to improve wages for low paid workers, especially when there are businesses that supply more than one of the institutions in the region.
Enforce wage protections for gig and temporary workers.
Many Philadelphians are now part of the gig economy or work through staffing agencies, with little protection, low wages, and no benefits. While local-level data is scarce, national data suggest that roughly 1 in 10 Americans receive their primary income through the gig economy. While municipal governments have scant leverage over the structure of the gig economy, Policies that require fair pay, scheduling transparency, and minimum hour guarantees can help close the gap for vulnerable workers in retail and hospitality, the fastest-growing segment of the lower-wage end of the labor market. We also need to increase enforcement of wage theft and related crimes. Estimates suggest that wage theft is responsible for the loss of up to one-third of income from vulnerable workers and Philadelphia should be relentless in its pursuit of those who short wages from our workers.
Increase the minimum wage.
While Pennsylvania lags behind every other contiguous state, Philadelphia can’t afford to wait. We need to keep fighting for a living wage statewide—or find creative policy tools to raise pay within the city itself, especially through contracts, subsidies, and institutional partnerships. The data is consistent with the fact that raising the minimum wage reduces poverty; it’s time we created a tiered approach to eliminating poverty wages in our city all together, including for tipped workers. The good news is that Philadelphia was an early adopter of policies to leverage the City’s economic power, implementing the Minimum Wage Standards Act in 2005, which mandates that all city-funded contractors pay at least 150% of the federal or state minimum wage, whichever is higher – and in 2008 amended MWSA to cover all recipients of any “city financial aid,” which includes loans, grants, tax relief, and a host of other incentives and exceptions.
Reduce Unavoidable Costs
Reduce the cost of childcare.
Childcare is often the single biggest barrier to workforce participation for low-income parents, especially women. Expanding access to affordable, high-quality childcare would allow thousands more Philadelphians to work or pursue education. To do this sustainably, we also need to raise wages for childcare workers, so that quality doesn’t come at the cost of exploitation. While research by The Reinvestment Fund and others suggest that Philadelphia has made admirable progress in aligning supply of available childcare seats with demand; as of 2024 the aggregate licensed childcare capacity in the city exceeds demand, meaning that there is now a surplus of childcare seats, at least in theory. However, the distribution of high-quality seats is very uneven, with some regions of the city experiencing severe shortages of seats, and many providers experiencing dramatic shortages of staff to allow centers to operate at full capacity. This points to an opportunity for the City to utilize its resources to increase staffing in underserved areas.
Build affordable housing that people can actually afford– and which build wealth
Philadelphia has plenty of “affordable” housing on paper—but not enough for families making $40K to $60K a year. We need new models: limited-equity co-ops, community land trusts, and small-scale multi-family developments priced below $150,000 for a two-bedroom. Traditional commercial banks are often uncomfortable financing different configurations of cooperative or condo that might allow developers to lower housing prices so this may be an opportunity for the public sector to get involved by building that capacity within the CDFI community or creating a special purpose public banking institution specifically designed to finance innovative models of affordable housing. Vienna, Austria has mastered low-cost housing, and Philadelphia could also become a leader through innovation and determination. Philadelphia already has a very large population of low and moderate-income homeowners, but research by the Economy League and others has shown that many of these properties have stagnated or declined in real value, leaving long-time homeowners with very little in the way of transferable wealth. We need robust strategies for boosting property values in historically disinvested neighborhoods, while at the same time ensuring that long term homeowners do not get displaced by rising taxes – and equally important, programs that allow long-term renters to have residential and community stability. Shallow rent subsidies were a good start, but we need to go longer and deeper.
When we reduce poverty, we reduce crime, improve health outcomes, strengthen schools, and unlock the economic potential of hundreds of thousands of Philadelphians. Accepting poverty as a condition of people's lives means accepting the idea that some people, including children, are deserving of frantic, trying and harmful existences. As someone who grew up in that environment, I don’t believe poverty is a condition we can allow to be normalized. We have the tools to fight poverty; all it requires is focus, data, and political will. It’s not fast. It’s not flashy. But it works.
It’s time to stop waiting for growth to solve poverty—and start designing policies that use poverty reduction to drive growth.