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Philadelphia must Grow and Diversify
its Middle Income Population
When asked what issues or problems Philadelphia faces most, it appears that the majority of residents and city stakeholders agree that one or more of the following—crime, poverty, and schools—are the main issues facing the city. I would add and ask, why are these problems so profound in Philadelphia and why are they so intractable. Of all the factors that have brought us to this point, we believe two have had a universal impact: our demographic imbalance and our limited capacity to draw in newcomers. Let me explain.
At the start of the 1970s, middle-income residents comprised 59 percent of Philadelphia's population of almost two million people. By 2010, with around 400,000 fewer residents, only 42 percent of the city's people qualified as middle-income. Since then, the city's socioeconomic diversity has continued to be adversely affected by this population shift and demographic imbalance. Today, Philadelphia is often labeled as "America's Poorest Big City", and among the top 30 US-populated cities, Philadelphia is ranked near the bottom for annual median household income.
Despite a noticeable inflow of new residents since the early 2000's, Philly's gains are offset by the city's ongoing exodus of citizens. Meanwhile, population expansion in mid-to-large sized US cities and metros, continues to grow and with a notable increase in diverse citizens. New arrivals by immigrants have played a big part in the population growth of these cities as well as the internal migration by first and second generation families who are spreading out across the country.
Philly's story has been different. According to a 2023 Pew Report, in the latter half of the 20th century, Philadelphia was considered a "low-immigration city". Things have improved since the early 2000s, but Philly's growth pattern does not parallel peer cities in terms of sheer numbers, demographic characteristics, and in the inflow of first and second generation families, and certainly not enough to offset the effects of being a "low immigration city" for a half century.
For example, Hispanics are America's largest minority group, yet in Philadelphia, the Latino population is relatively small for a top 10 US city (see chart below), and unlike every other top 10 city in America where its largest Latino subgroup has its origins via immigrants, Philly's largest Latino subgroup is that of Puerto Ricans who are natural-born American citizens.
U.S. CITIES
by Overall Population Rank
1 - New York
2 - Los Angeles
3 - Chicago
4 - Houston
5 - Phoenix
6 - Philadelphia
7 - San Antonio
8 - San Diego
9 - Dallas
10 - Austin
Source: US Census, 2020 Estimates
OVERALL
POPULATION
8,804,190
3,898,747
2,746,388
2,316,120
1,680,992
1,584,064
1,547,253
1,423,851
1,343,266
974,447
HISPANIC
POPULATION
2,417,676
1,910,196
776,290
1,044,120
725,394
241,425
998,698
431,477
553,420
311,823
HISPANIC PERCENTAGE
OF OVERALL POPULATION
27%
48%
28%
45%
43%
16%
65%
30%
41%
31%
Philly is the 6th largest city in the US, and its nestled within the northeast corridor. So why aren't there more first- and second-generation families and individuals moving to the city? In short, brand—or the lack of it. The historic significance of Philadelphia, as well as its vast big city amenities, are just a few notable features that diverse populations outside of the region are unfamiliar with. This, combined with an affinity that diverse populations can have with US cities with which they identify both culturally and socially, limits the consideration of our city for relocation.
When Philly's brand was not well understood or lacked connection to certain domestic populations, attraction strategies have served the city well; consider Visit Philadelphia and Campus Philly. The latter not only helps to retain bright minds our colleges and universities educate, it also helps to attract and connect talent to local employers. Visit Philadelphia's efforts not only attract tourists to the city, our hospitality industry is now a major driver for Philly's economy. As a resident attraction program, Live Work Philadelphia is designed to better position the city in the minds of young professionals and families and notably, to those who seek lower cost big cities.
According to the Pew Charitable Trusts, "A vibrant and substantial middle class is widely considered essential for economic health and social stability in any community". Bruce Katz at the Lindy Institute for Urban Innovation at Drexel adds, "Urban neighborhoods function best when they contain families with a broad mix of incomes. Economic integration sets in motion a virtuous cycle of functioning markets, attractive amenities, quality schools, and other essentials of community life."
A larger middle-income population also contributes to the restoration of crucial rungs on the social and economic ladder that have eroded over time and prevented many in low-income communities from accessing greater social and economic mobility.
Live Work Philadelphia is committed in growing and diversifying the middle-income population by offering young diverse individuals and families a real option as they consider lower cost cities to relocate to. Philly is poised to offer them what they want, career advancement, and the ability to keep more of what they earn while being an active participant in the communities they can join.
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