The left axis of the figure presents the number of people in Philadelphia County and the Philadelphia Suburbs (Bucks, Chester, Delaware and Montgomery) living below the poverty line (the red and green vertical bars). The right axis is a ratio of the total population in Philadelphia to the total population of the Suburbs (black line). In 1970 the total population of the two regions was the same with a ratio of 1. By 2005 the ratio had declined to just under .6 as Philadelphia shed half a million residents and the suburbs gained just under that amount.

The public discourse about economic development is often by necessity a kind of story telling about the causes and consequences of the state of the Philadelphia economy. A popular and compelling story is typically a version of the following from an article in the archive over at the Next Mayor:

“The answer to why Philadelphia tops the poverty chart is a depressingly familiar refrain about high taxes and a hostile culture that encourages affluent people to leave, while providing inexpensive housing that keeps poor people in place. "We were created when cities had a monopoly," said Jeremy Nowak of the Reinvestment Fund. "So we have monopolistic systems and viewpoints, when capital no longer has to be in any one place." Anachronistic regulations enforced by indifferent bureaucracies – remnants of the era when cities were the center of commercial life and had no competition - discourage businesses from coming here and creating jobs.”

So as Philadelphia lost population and employment the Suburbs gained both. And yet even in the Suburbs the number of people living in poverty (as in the City) has changed little in the last 35 years despite all that growth.

The point is not to suggest that attracting people to the City is unimportant but that policies aimed at doing so are often dressed up as though they will simultaneously reduce poverty. If you increased the population of the City by half a million, the poverty rate would fall from 25 to 18 percent. Would this outcome still count as a victory in the war on poverty if there were still more than three-hundred thousand people living in poverty? How much tax revenue in the form of tax breaks, abatements and incentives would you have to give up to buy back 500,000 people? And with what you can offer in terms of cash would they even come? Which is the bigger incentive a tax break/abatement or a community debating emergency measures to tackle a rising murder rate?

It is good policy to improve the competitive strengths of local businesses whether it is through investments in the workforce, improvements in city services and yes better tax policy. It is bad public policy to frame policy changes aimed at changing the competitiveness of business as solutions to poverty when these changes alone are plainly not sufficient.

The reason it is bad policy is because the cost of failure is so high. In 1970, just 11 percent of the people living below the poverty line were between the ages of 36 and 53. In that same year 44 percent of the people living below poverty were under the age of 17. By 2005, most of those kids captured in the 1970 census would be between the ages of 36 and 53, a group whose share of the population living in Poverty nearly doubled to 20 percent. As you ponder the next four years the most important question is not who will be the next mayor. It is what you can do to make sure that on your watch, whoever the next mayor is, another generation of kids do not have a similar fate?

*Note:
An error in my code misclassified some people in the 1970-2000 Census as living in poverty when in fact their poverty status is unknown in the data set. The error overstated the level of poverty from 1970 to 2000. At some stage I will impute poverty status for those that having missing data but for now I decided to exclude them entirely from the estimates for both regions. All the figures have been updated. In addition to revising down the poverty and population counts the changes also altered slightly the distribution of people by age and school enrollment. The points made above have not changed: The number of people living in poverty has not declined in the suburbs even as the population and employment have increased. The share of individuals age 36 to 53 in Philadelphia living below the poverty line has increased from 11 to 20 percent since 1970.