Poverty Hurts Economy

July 27, 2015

Philadelphia Daily News Editorial

For our city to grow, we must improve education and wages

HOW DOES A CITY make progress? That's never a simple proposition, especially in a city like ours. Political will is certainly a factor (as is citizen will), but even the most disciplined political will can be no match for a strong stand from the business community.

For example, much of the reform of the city's tax structure over the years would not have happened without the business community; we doubt that major events like the pope's upcoming visit or the Democratic National Convention would be a reality without their participation, either.

That's why the theme of this year's World Class Summit by the Economy League of Philadelphia, held earlier this month, is significant. The annual event this year did something that pro-business organizations don't always find easy: acknowledging poverty.

Until relatively recently, in fact, the business community's avoidance of addressing the large problem of poverty has been stunning; one example, though by no means the only one, is Walmart's history of low wages. Those wages have not only driven huge profits for the company, but also huge needs of its workforce that can't afford to sustain lives without government help, like food stamps and health care. Fortunately, that avoidance has recently become harder to maintain, as more people have made the connection between low wages and other damaging policies that impact the overall health of the economy.

That's why the language of the Economy League's latest Expanding Opportunity report is both refreshing and, in some ways, revolutionary (www.economyleague.org). It's also critical to Philadelphia, which has many success stories, but still lags in key areas.

The Economy League tackles three of these issues that we must improve to progress beyond our standing as a high-poverty, low job-growth city. It calls for supporting underserved entrepreneurs, especially those from the immigrant community.

In this region, immigrants are responsible for 96 percent growth in Main Street businesses between 2000 and 2013. But further investment and policy changes are needed to encourage more individuals to see entrepreneurship as a viable option.

In addition, the high number of workers in low-wage jobs must change. That goes beyond raising the minimum wage; in Philadelphia, a key driver of low wages is low educational attainment. Dropout rates and lack of advanced degrees and training depress earning power - and that depresses business growth.

A third driver of growth is transportation access. While the region has a robust transit infrastructure, the Economy League points out that many low-income communities have the longest commute times in the region. One thing that indicates is that our transit network doesn't necessarily match where the jobs are. For example, King of Prussia is a large job center, but transportation is limited, which reduces the number of opportunities for Philadelphians without cars.

None of the points made by the Economy League are new, but the group has taken an important step in expanding the conversation about the impact of inequity on growth. Too often the conversations about poverty and what to do about it are confined to the nonprofits who help people, or those in elected office who must balance growing social needs against a dwindling budget.

The simple reality is that if a city or region can't offer businesses enough people who are educated, skilled and trainable, it will be hard for any business to grow and expand. We hope more business groups, including the Chamber of Commerce, put their considerable force behind the notion that poverty is everyone's business.