Executive Summary

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Philadelphia's civic and philanthropic sectors are not short on urgency or effort. Across the city, organizations are working tirelessly to reduce concentrated poverty, strengthen public safety, improve educational outcomes, expand workforce opportunity, revitalize neighborhoods, attract and retain young professionals, and widen pathways to economic mobility. This work is essential, and it is largely a response to conditions already shaping people's lives.

 

Philadelphia’s new nonprofit, Live Work Philadelphia, is focused upstream on a root cause behind what sustains many of those conditions: the fifty-year hollowing of the city's middle-income households. The challenge is structural, and it has two dimensions. First, Philadelphia's middle-income population has eroded for decades. It was the demographic backbone that once stabilized neighborhoods, sustained the tax base, and anchored civic institutions. Second, Philadelphia has not kept pace with the cultural diversification, which has fueled population and economic growth in many peer cities. While other cities have attracted and retained a broader mix of communities for decades, Philadelphia’s narrower demographic composition has limited its ability to attract new residents.

 

The result is a cycle of limited diversification, weak population growth, and a persistent middle-income deficit. Poverty concentrates, schools struggle, and public safety weakens. These are connected failures, reflecting the city's success and shortcomings in attracting and retaining a stronger demographic backbone. 

 

The data is stark. Philadelphia's middle-income share fell from 59% of adults in 1970 to 42% by 2010, and it has not recovered since. The city has slipped from the 4th-most populated in the country in 1970 to 6th today, with San Antonio closing in fast. And despite the persistent idea of a "diverse" city, Philadelphia's diversity is rather shallow and geographically siloed.

 

Many diverse, middle-income professionals and families have yet to see Philadelphia as a real option for relocation and living, unaware of what it could offer them, while informal networks of family, colleagues, and community have already made other cities familiar and appealing to them, often without any firsthand experience.

Since 1970, Philadelphia has lost residents on a massive scale while attracting fewer newcomers and immigrants than its peer cities. Although the city has made real progress on each of these fronts, it has yet to capture the imagination of today's young and diverse populations and build a coordinated strategy aimed specifically at attracting and keeping them as residents. 

 

Live Work Philadelphia (LWP) is designed to fill that gap. As a new tool in the city's economic-development toolbox, it focuses on the makeup of Philadelphia's population and the conditions that shape it. Where most efforts target specific outcomes, LWP instead focuses on the underlying conditions that make those outcomes possible. To thrive over the long term, Philadelphia needs more middle-income residents from every background.

 

LWP will pilot and sustain a modest, strategic, and targeted marketing domestic attraction program intended to gradually rebuild Philadelphia's middle class by drawing in diverse, middle-income individuals and families, many of whom are priced out of other markets.

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In this paper, "middle income" means households earning 80% to 200% of Philadelphia's median household income of roughly $62,000, or about $50,000 to $124,000 a year. This group includes teachers, nurses, tradespeople, government workers, small business owners, and early- to mid-career professionals.

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