Out of step with the rest of America and its own suburbs, Philadelphia has remained stubbornly mired in poverty while its median household income has plummeted, a stunning development that puzzles experts and belies the city's self-styled image as a revitalized metropolis on the rise.

Two reports from the U.S. Census Bureau released Wednesday and Thursday show that as poverty has declined and income has increased nationwide, Philadelphia's poverty rate remained stuck at 25.7 percent in 2017, the same as in 2016, and close to 2015's level of 25.8 percent.

Philadelphia, then, continues to be encumbered by its reputation of having the highest rate of poverty among the 10 most populous U.S. cities, as well as the highest rate of deep poverty, a measure of people living at 50 percent of the poverty line or less.

But while the poverty rate remained static, the deep poverty rate startled observers by rising from about 12 percent — a level it hovered around for five years — to 14 percent in 2017, a number that exceeded the 13.5 percent measure in 2010, after the recession.

At the same time, Philadelphia's median household income dropped 4 percent, from $41,449 in 2016 to $39,759.

Each of the other big American cities registered an increase in income. Similarly, of the seven Pennsylvania and New Jersey suburbs surrounding Philadelphia, just one — Camden County — showed a slight decrease in median household income, a decline of 0.3 percent.

In New Jersey, Gloucester County saw a 13.5 percent increase in median household income, while poverty dropped 1.4 percentage points to 6.2 percent, the largest dip in poverty in the region.

That income in Philadelphia could fall so precipitously in a single year amid a booming economy and sustained unemployment is an unexpected and difficult-to-explain phenomenon.

"I'm having a hard time getting my head around this," said Mark Zandi, chief economist at Moody's Analytics. "It's hard to square these numbers with how well overall the city has done in the last year. It suggests poverty is very pernicious. It's very disconcerting."

Maria Kefalas, a sociologist and inequality expert at St. Joseph's University, said that the "jarring" drop in income "really freaks me out," adding, "It's bad, a bad sign. This doesn't happen. It means the patient is sick and not getting better.

"The city that likes to imagine itself on the upswing — trying to lure Amazon here, gentrifying around Temple — is not changing. Wages are stagnating and people aren't benefiting from economic growth.

"The city is really poor. It's depressing."

People wait in line for free food from a program called Philly Restart at 19th Street and the Ben Franklin Parkway this week.
HEATHER KHALIFA / Staff Photographer
People wait in line for free food from a program called Philly Restart at 19th Street and the Ben Franklin Parkway this week.

Mark Price, labor economist with the Keystone Research Center in Harrisburg, agreed.

"It's a very deep concern when poverty is stubborn here as the economy expands," he said. "Instead of winning the Super Bowl, as we're used to, we are coming in last in poverty."

News not all bad

In at least one aspect, there was some good news in the Census report that concentrated on the Philadelphia region, known as the American Community Survey.

Poverty among children under age 18 fell from 37.3 percent to 31.9 percent, while poverty among the elderly didn't climb much, reaching 17.5 percent from 17.4 percent.

It's possible that increased focus on early childhood education has helped, some said. But others dispute the number. Steveanna Wynn, executive director of the Share Food Program, said that there has been no change in the number of low-income children who are served in food cupboards throughout the city, proof that childhood hunger and poverty have not improved.

Others said the decline in childhood poverty could simply be a result of middle-class people with children moving into the city, making child-poverty numbers fall.

Why the introduction of well-off people didn't bring down overall poverty could be mitigated by the surprising rise in white poverty, experts said.

While poverty among minority groups stalled or decreased, poverty among non-Hispanic white people in Philadelphia shot up from 14.8 percent to 19.4 percent between 2016 and 2017.

A Big Increase in White Poverty

In the last two years, the poverty rate for white, non-Hispanic Philadelphia residents jumped from 13.8 percent in 2015 to 19.4 percent. Over the same time, the rate for black residents fell by 4.4 points, and by 1 point for Hispanics.
Staff Graphic

This set of circumstances inspired a theory.

If the overall poverty rate is stagnant, and deep poverty has increased while white poverty is up and child poverty has gone down, that likely means poverty is up among white working-age adults without children, opined Luke Shaefer, director of Poverty Solutions at the University of Michigan.

That's the same group that abuses opioids, he said. So it's a "pretty compelling" theory that opioids could be the driver of sudden deep poverty, as well as increased white poverty, said Shaefer, connecting two of Philadelphia's most vexing problems.

Of course, experts stressed, these could be only guesses, since they first saw the data in the last two days.

Attempting to explain Philadelphia's difficult condition, experts suggested that even though unemployment is down, many Philadelphians work in low-paying jobs, or are forced to work fewer hours. The sector that added the greatest number of jobs in recent years is hotel and restaurant worker, said Keith Wardrip, a research manager with the Federal Reserve Bank of Philadelphia.

The median income for such jobs is less than $18,000 annually, according to Dermot Delude-Dix, research analyst with Unite Here Local 274, which represents hotel and restaurant workers.

"There's a distinction between having a job and a decent-paying job," Wardrip said.

Arlene Steinberg, 66, who lives in Northeast Philadelphia, had a good job as an executive assistant at a lighting company 10 years ago. But the recession caused her to be laid off.

Divorced with no children, Steinberg said the best job she could get was Walmart greeter. "I made my peace with it," she said. "I used to donate to others. Now, I get food from the food pantry at KleinLife community center.

"My 25-year-old TV has rabbit ears with aluminum foil, and I talk on the cheapest flip phone you can get. If I ever get money, I'll never eat another can of peas again."

Philadelphia boosters like to say that the city is a center of medical jobs and university slots — meds and eds — Price said.

"They're supposed to be awesome engines of opportunity," he added. But many of the available meds and eds jobs are not surgeons and professors, but janitors and security guards, Price and others said.

"And what gets lost is that janitors and security guards don't do as well in hospitals and universities," he said.

Mariana Chilton of Drexel University's School of Public Health added that "it's unconscionable" that institutions pay janitors and security guards around $9 an hour.

She said that people who clean our buildings, care for our children and our disabled and elderly get such low pay in Philadelphia that it "generates more vulnerability and more poverty."

People are in poverty because the minimum wage hasn't gone up, said Kathy Fisher, policy director of the Greater Philadelphia Coalition Against Hunger.

"The abundance of service-industry jobs in Philadelphia and their corresponding low wages do not push up the median income," she said. While many in the city reap the rewards of a motoring national economy, it's evident that "things don't magically trickle down to reach the people who need it the most."

To improve conditions, Kefalas said, "political leaders in the city should go to major employers and ask, 'When are you going to do right by the people of Philadelphia in terms of wages?' "

City officials who were asked for comment said they would respond, but hadn't as of deadline.

Upbeat suburbs

Throughout the region, data from the two Census reports told a more upbeat story.

Median household income was up nearly 9 percent in Delaware County to $73,854, while the poverty rate fell from 10.9 percent to 9.7 percent.

"Lots of companies relocate hear, and Boeing continues to do incredibly well," said J. Patrick Killian, director of commerce for Delaware County. Oil and natural gas outfits are enjoying a good year, too, he added.

County workers benefit from making high Philadelphia salaries, said Brandon McKoy, director of government and public affairs at New Jersey Policy Perspective, a Trenton think tank.

Still, he added, wages aren't going up fast enough for low-income people.

Poverty may be dropping in places like Gloucester County because lots of New Jersey communities that don't provide for people in poverty simply "push people out," said Renee Koubiadis, executive director of the New Jersey Anti-Poverty Network in Bordentown. "They give people bus tickets to Atlantic City, Trenton, and Camden, where there are shelters" for people in poverty and the homeless, Koubiadis said.

Overall, the poverty rate for New Jersey declined from 10.4 percent in 2016 to 10 percent in 2017, the American Community Survey reported. The Pennsylvania rate went from 12.9 percent to 12.5 percent.

Nationwide, poverty moved from 12.7 percent to 12.3 percent during the same period, according to the second Census report, called "Income, Poverty and Health Insurance Coverage in the United States: 2017."

The U.S. median household income increased from $60,309 to $61,372 between 2016 and 2017.

The harsh Philadelphia news from the American Community Survey is not news at all to Eugene Harris, 60, of North Philadelphia.

Eugene Harris, 60, of North Philadelphia, lives in deep poverty after a lifetime of work. “It is what it is,” he said.
Eugene Harris
Eugene Harris, 60, of North Philadelphia, lives in deep poverty after a lifetime of work. “It is what it is,” he said.

Once upon a time, he worked for the phone company. Then came downsizing. Now, he works five to 10 hours a week at a laser printing company, and lives in deep poverty. Still, he tries.

"They call me Mr. Hustle in my neighborhood because I paint and do outside work for anyone who needs it," said Harris, who is separated and has a grown daughter. "But it's still hard to make ends meet.

"Sometimes, I go to sleep hungry. I really don't like to ask my neighbors for help, but sometimes I do," said Harris, who volunteers at the charity food kitchen at Devereux Methodist Church.

"I do work in Philadelphia. But, you know, it's still a struggle.

"It is what it is."

Philadelphia Media Network is one of 21 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city's push towards economic justice. See all of our reporting at brokeinphilly.org.