Apr 11, 2022 - News

Report: Philly's income inequality is on the rise

Income inequality scores in largest U.S. cities
Reproduced from Economy League, 2020 Census ACS; Chart: Axios Visuals

Philadelphia's income inequality has risen over the past decade, according to a new report from the Economy League of Greater Philadelphia.

Driving the news: The Economy League published a report last week, using the Gini index, or the Gini coefficient, to measure the city's income inequality. It ranges from 0 to 1, with 0 meaning perfect equality and 1 indicating complete inequality.

  • Philadelphia's Gini coefficient grew from 0.49 in 2010 to 0.52 in 2020, the nonprofit found.

The intrigue: City leaders, including Councilmember Kendra Brooks, have recently reignited debate over how to address Philly's income inequality as part of renewed calls for a wealth tax.

Zoom in: People of color make up more than 73% of households earning less than $10,000 a year and about a quarter of those earning $200,000 or more, according to the data.

  • Meanwhile, white residents are over-represented among the highest income brackets.

Zoom out: When compared to the 15 largest U.S cities, Philadelphia has the sixth highest degree of income inequality, the report notes.

  • New York City has the highest, with a coefficient of 0.55, while Columbus, Ohio, has the lowest, at 0.44.

Of note: The Economy League used information from the U.S. Census Bureau's American Community Survey from 2016-2020.

Between the lines: Philadelphia's transition from an industrial city to a service-based economy has contributed to its income inequality, according to the report.

  • The Economy League notes that collective bargaining has historically been an effective approach to addressing inequality, but the labor movement has been on decline for the past few decades.
  • The report also highlighted moves to raise the minimum wage at the state and local levels.

What they're saying: Jeff Hornstein, the executive director of the Economy League, told Axios one of the city's biggest issues is the lack of labor supply among people who are already here for the skills needed in Philadelphia.

  • "That's the horse we've been on for the past 10 years, trying to tell people we need to align skills and the labor force," he said.

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