Inflation beats out wage growth in Philadelphia region
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Many workers in the Philly region have "lost purchasing power" during the past decade as wage growth lags behind inflation, according to a new report.
What's happening: Inflation rose 14.4% in the region between 2011 and 2021, while average wages ticked up only 8.2% during that period, according to preliminary figures reported by the Economy League of Greater Philadelphia this month.
Why it matters: The rising cost of living is canceling out pay bumps, and low-income workers are disproportionately affected.
State of play: Low-wage occupations — for which hourly wages are below $15 — made up much of the region's employment gains during the past decade, according to the report.
- Low-wage workers in retail, hospitality and other industries, who struggle to afford basic necessities like housing and food, accounted for 34.7% of the total region's workforce in 2019.
- Meanwhile, home prices in the region are becoming more unaffordable due to poor wage growth. The median sale price for a residential home grew by more than 60% from 2011 to 2021.
Between the lines: Workers in low-wage occupations saw their employment plummet by almost 20% in 2020 compared to the previous year, according to the report.
- The region's large growth of low-wage workers "really bit us in the butt come the pandemic because we lost all of the gains, quote on quote, that we got in the past decade in a month," said Mike Shields, a project manager at the research nonprofit.
The big picture: Closing the gap is more feasible in the Philadelphia region than in many of its peer metros, according to the report.
- The Philly area's average inflation-wage difference is better than Greater Boston and New York City, to name a few. And it's below the national average, according to the report.
What's next: The report called for a focus on equity, inclusivity and affordability to attract major employers and build industries in the region.
- Shields noted that many industries in the Philly metro continue to pay workers the minimum wage of $7.25 an hour.
- "You want to be competitive with other cities? Offer more money for those jobs, and you'll get more people, and you'll be able to grow more careers and talent out of it," Shields said.