Leading Indicators

Philadelphia’s Persistent Income Inequality: A 2021 Data Update

As Women’s History Month comes to close, we update our previous analyses of income inequality in Philadelphia—using the most recent estimates from the U.S. Census Bureau—by examining earnings gaps among different racial, ethnic, and gender groups.

 

What You Need to Know

  • In 2021, Philadelphia’s median household income tracked at $52,650.

  • Black and Latino/Hispanic households in Philadelphia reported median household incomes far below the city’s overall 2021 median, by $13,297 and $13,837 respectively.

  • Philadelphia’s non-Hispanic White households reported a median household income of $74,279 in 2021; this is $21,630 above the city’s median, roughly $18,400 above the city’s Asian households’ median, almost $35,000 above Black households’ median, and approximately $35,500 above Latino/Hispanic households’ median.

  • Only 14 of the 142 majority non-Hispanic White neighborhoods of the city (roughly 10%) saw a median household income below the city’s median in 2021.

  • Most majority non-Hispanic Black neighborhoods in Philadelphia (roughly 76%) saw a median household income below the city’s 2021 median.

  • All but one out of the 25 Latino/Hispanic majority neighborhoods of Philadelphia saw a median household income below the city’s 2021 median.

  • The sole majority Asian neighborhood in Philadelphia saw a 2021 median household income $38,418 above the city’s median.

  • Philadelphia neighborhoods without any distinct racial or ethnic majority residential population were more evenly divided with 59% seeing a median household income below the city’s 2021 median and 41% seeing a median household income above the city’s median.

  • Full-time, year-round non-Hispanic White female workers in Philadelphia in 2021 earned $0.88 for every non-Hispanic White male dollar earned – a one cent increase since 2020.

  • Both Asian females and males in Philadelphia earned $0.75 to every white male dollar earned in 2021, the only racial or ethnic group in the city to see earnings equality between the binary genders.

  • Full-time, year-round, salaried Black females earned $0.59 for every white male dollar earned in Philadelphia in 2021 and $0.02 less than Black males.

  • Philadelphia’s full-time, year-round, salaried Latina/Hispanic females saw the lowest overall earnings in comparison with white males at $0.55.

  • Philadelphia’s full-time, year-round, salaried Latino/Hispanic males earned $0.05 more than Latina/Hispanic females in 2021, but $0.40 less than non-Hispanic White males.

  • Philadelphia’s patterns of wage inequality in 2021 largely mirrored Boston and New York City where white male and female median earnings were typically followed by Asian earnings, then Black earnings, and finally Latino/Hispanic earnings.

  • Non-Hispanic White male median earnings in Philadelphia in 2021, at $69,473, trailed non-Hispanic White male median earnings in New York City and Boston by more than $20,000. 

  • Unlike Philadelphia, patterns of wage inequality differed for Pittsburgh, Baltimore, and Washington D.C. where median earnings among Asian residents, for example, either outpaced or were very similar to some non-Hispanic White median earnings and Latino/Hispanic median earnings surpassed Black median earnings.

  • Pittsburgh recorded the highest proportional median earnings for Black workers of the six peer Northeast U.S. cities in 2021.

  • Philadelphia’s patterns of wage inequality are currently trending like Boston and New York City – two cities well known for their very high levels of income inequality.

 

Income Inequality by Race and Ethnicity

As we have discussed in previous Leading Indicator briefs as well as our Color of Inequality series, income inequality and poverty disproportionately track along lines of race, ethnicity, and gender. This inequality stems from a variety of structural biases and prejudiced policies that manifest in hiring discrimination, workplace norms, financial redlining, inequitable access to higher education, housing segregation, unequal school funding, the digital divide, and over-policing to name only a few. Tracking differences in household income and earnings illustrates these gaps and can show progress. Figure 1 compares the median household income of different racial and ethnic households in Philadelphia in 2021.

 

FIGURE 1 

SOURCE: Data were obtained from five-year estimates of the U.S. Census Bureau’s 2017-2021 American Community Survey.  

NOTE: All racial groups (excluding “White (Non-Hispanic)”) include individuals of Latinx/Hispanic ethnicity. 

 

In 2021, Philadelphia’s median household income tracked at roughly $52,650. This indicates that exactly half of the city’s households earned more than this amount in 2021 while the other half earned less. In Figure 1, the city’s median household income is used as the baseline (or zero-line) to compare differences across the median household incomes of the city’s different racial and ethnic groups. Racial and ethnic groups with an estimated median household income above the baseline largely reported higher than average incomes (in blue) while negative estimates indicate lower than average income levels (in orange). Figure 1 shows how Black and Latino/Hispanic households in Philadelphia reported median household incomes far below the city’s overall median (by $13,297 and $13,837 respectively). Non-Hispanic White and Asian households, on the other hand, earned more. In fact, Philadelphia’s non-Hispanic White households reported a median household income of $74,279 in 2021; this is $21,630 above the city’s median, roughly $18,400 above Asian households’ median, almost $35,000 above Black households’ median, and approximately $35,500 above Latino/Hispanic households’ median. In a more equal setting, there would be little to no differences across the median household incomes of any racial or ethnic group since access to social and economic opportunity would be similar.

 

Further disaggregating income inequality across Philadelphia’s neighborhoods also demonstrates the disproportion along racial and ethnic lines. Using census tracts as proxy neighborhoods, Figure 2 compares each neighborhood’s median household income with the city’s overall median as the baseline. It also details the racial or ethnic majority of each census tract’s residential population to better understand patterns of income inequality.

 

FIGURE 2 

SOURCE: Data were obtained from five-year estimates of the U.S. Census Bureau’s 2017-2021 American Community Survey. 

 

Figure 2 shows how the majority of predominantly non-Hispanic White neighborhoods in Philadelphia reported median household incomes above the city’s overall median, while neighborhoods with more communities of color saw median household incomes below the city’s median. Only 14 of the 142 majority non-Hispanic White neighborhoods of the city (roughly 10%) saw a median household income below the city’s median. Over three-quarters of the city’s majority non-Hispanic Black neighborhoods recorded a median household income below the city’s median along with all but one out of the 25 majority Latino/Hispanic neighborhoods. The sole majority Asian neighborhood saw a 2021 median household income $38,418 above the city’s median. Neighborhoods without any distinct racial or ethnic majority residential population were more evenly divided with 59% seeing a median household income below the city’s median and 41% seeing a median household income above the city’s median.

 

Income Inequality Including Measures of Gender

Income equality also falls along lines of gender. While multiple gender identities exist, we use the only available binary male-or-female estimates from the U.S. Census Bureau to compare the relative annual earnings of Philadelphia’s full-time, year-round salaried workforce. Consistent with our previous briefs, we track inequality using white male dollar earnings as the proportional base comparison. Figure 3 shows how large wage gaps persist for women and persons of color when compared to Philadelphia’s white male population.

 

FIGURE 3 

SOURCE: Data were obtained from five-year estimates of the U.S. Census Bureau’s 2017-2021 American Community Survey.  

NOTE: All racial groups (excluding “White (Non-Hispanic)”) include individuals of Latinx/Hispanic ethnicity.

 

Consistent with our previous analyses, full-time, year-round salaried female workers and—in particular—female workers of color earn proportionally less than their male counterparts. Non-Hispanic White female workers in Philadelphia fare the best with $0.88 for every non-Hispanic White male dollar earned (a one cent increase since our last update using 2020 estimates). Non-Hispanic White females, however, see the largest gap in earnings between males and females of any racial or ethnic group at $0.12. Both Asian females and males in Philadelphia earned $0.75 to every white male dollar earned, the only racial or ethnic group to see earnings equality between the dual genders. Full-time, year-round, salaried Black females earned $0.59 for every white male dollar earned in Philadelphia in 2021 — $0.02 less than Black males. Philadelphia’s Latina/Hispanic females saw the lowest overall earnings in comparison with white males at $0.55. Latino/Hispanic males earned $0.05 more than Latina/Hispanic females, but $0.40 less than non-Hispanic White males.

 

Philadelphia’s wage gaps remain relatively consistent with peer Northeast U.S. cities. Figure 4 details the proportional earnings of different racial, ethnic, and gender groups across a series of peer cities using each city’s non-Hispanic White male dollar as the base comparison. The median annual earnings of non-Hispanic White males are also detailed under each city label to better contextualize the proportional differences.

 

FIGURE 4 

SOURCE: Data were obtained from five-year estimates of the U.S. Census Bureau’s 2017-2021 American Community Survey.  

NOTE: All racial groups (excluding “White (Non-Hispanic)”) include individuals of Latinx/Hispanic ethnicity.

 

Philadelphia’s patterns of wage inequality in 2021 were largely mirrored in Boston and New York City where white male and female median earnings were typically followed by Asian earnings, then Black earnings, and finally Latino/Hispanic earnings. These trends speak to both the historic and dominant industries as well as historic and recent immigration patterns. It is interesting to note, however, that while Philadelphia’s patterns of wage inequality resemble those of Boston and New York City, Philadelphia’s median annual earnings are far lower than both cities. Non-Hispanic White male median earnings in Philadelphia in 2021, at $69,473, were roughly $20,000 less than the non-Hispanic White male median earnings in New York City and Boston. One would expect the gaps between racial, ethnic, and gender groups to be smaller when the comparison baseline wage is the second lowest of the six peer Northeast U.S. cities. This speaks to Philadelphia’s tumultuous relationship with poverty among its residents.

 

Patterns of wage inequality differed for Pittsburgh, Baltimore, and Washington D.C. Median earnings among Asian residents, for example, either outpaced or were very similar to some non-Hispanic White median earnings. Additionally, rather than seeing the lowest median earnings in 2021, Latino/Hispanic full-time, year-round workers in these peer cities saw earnings above those of similar Black workers. Pittsburgh remained an outlier when compared to its peers in 2021, with Asian males earning $0.04 more for every non-Hispanic White male dollar earned, non-Hispanic White female earnings largely matching those of Asian females and Latino/Hispanic males, and full-time, year round, salaried Black workers seeing the best proportional earnings of any peer Northeast U.S. city. These trends largely reflect Pittsburgh’s overall lowest median non-Hispanic White male earnings among the six peer cities in 2021, at $60,658. In fact, the annual earnings among non-Hispanic White males in Pittsburgh in 2021 was slightly over half the earnings of non-Hispanic White males in Washington D.C. – the Northeast U.S. city with the largest recorded annual earnings among non-Hispanic Males in 2021 – and just under $9,000 less than Philadelphia’s non-Hispanic White males’ annual earnings.

 

The Takeaways

As our data briefs continue to demonstrate how inequalities persist across lines of race, ethnicity, and gender, there needs to be more concerted strategies and programming for closing these gaps in our region. Philadelphia’s wage inequality is currently trending like Boston and New York City – two far wealthier cities well known for their high levels of inequality. Being the poorest among the ten largest U.S. cities, Philadelphia will need to focus on distributing recent economic gains more equitably. This is why the Economy League focuses on growing, attracting, and maintaining Philadelphia’s small and diverse business ecosystem via PAGE, why our Impact Labs program centers bottom-up, community-driven solutions to address persistent socioeconomic inequalities, and why we keep engaging and informing regional leaders about these topics via our ongoing research and GPLEX programming.

 

The Economy League's Leading Indicator article serves as a high-quality analysis to deepen understanding of key regional trends and labor market challenges based on publicly available data. Have any questions or additional input on this week's topic? Send us your thoughts at [email protected].