US economic rebound slow to reach Philadelphia

By Hope Yen, Associated Press | Posted - Sep. 18, 2014 at 9:51 a.m.



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WASHINGTON (AP) — The nation's economic recovery has been slow to reach the Philadelphia metropolitan area and income inequality has widened, hurt in part by an exodus of residents and a continued collapse in mid-wage jobs.

Across the U.S., many metropolitan areas saw declines in median household income from 2010 to 2013, mostly in the once-booming areas of the South and West, according to new census data released Thursday. Philadelphia posted the largest income drop among large metro areas outside the Sun Belt, a sign of its persistently weak job market.

"Over the course of the recovery we've actually seen a lot of downtown revitalization and urban areas grow faster, but less so in Philadelphia," said Adam Ozimek, an economist at Moody's Analytics in West Chester, Pennsylvania. "In Philadelphia, the recovery has been in low-wage jobs but it's missing in mid-wage jobs."

The Philadelphia area had median household income of $60,482, down from $62,014 in 2010, the first full year after the recession. That came despite smaller income losses in Pennsylvania and the U.S. as whole; both now have median income of roughly $52,000.

In Pittsburgh, for instance, median household income grew from $49,780 in 2010 to $51,291, boosted in part by the fast-growing natural gas industry in the western part of the state. It posted the third largest increase in median income among large metros, behind Portland, Oregon, and San Francisco.

Still, Philadelphia ranked 11th in income among the 25 largest metro areas — ahead of Los Angeles, Dallas and Atlanta.

Ozimek described an emerging divide in the Philadelphia metro area between many higher-paid health care and medical jobs, which are expected to grow in the coming years as the state expands its Medicaid program, and lower-skilled positions such as service workers in the leisure and hospitality industry. Job growth in the hospitality sector is now almost 10 percent above where it was before the recession, compared to a 20 percent decline in manufacturing jobs.

The health care sector, which also includes some lower-skilled positions such as home health aides, has seen 12 percent growth since the recession.

From 2012 to 2013, Pennsylvania was among 15 states in which the gap between rich and poor continued to widen, according to the Gini index, a census measure of income inequality. Inequality in the Philadelphia region stood at 0.485, slightly above the national average of 0.481, while Pennsylvania's was lower at 0.470. The index ranges from 0 (complete equality) to 1 (complete inequality).

Even as many residents moved out of the Philadelphia area, the region posted some population growth from the arrival of foreign-born immigrants.

Pennsylvania ranked sixth in the U.S. in the number of foreign-born adults with college degrees who moved into the state from 2012 to 2013, behind Texas, New Jersey, Massachusetts, California and Illinois. Much of Pennsylvania's gains were in the Philadelphia area, which has seen growing racial diversity and where voters increasingly lean toward the Democratic party.

Population growth and a rebounding economy go hand in hand, with jobs attracting new residents and population gains driving demand for housing and services.

"Unlike the U.S. as a whole, Asian immigrants outnumber Hispanic immigrants in Philadelphia and the number of immigrants with college degrees is double those without high school diplomas," said William H. Frey, a demographer at Brookings Institution, who analyzed the data. "With continued domestic out-migration, immigration is an economic plus for the area."

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Hope Yen

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