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The Misery Index

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miseryindex.pngThere is no other way to put it: Philadelphia got a kick in the head during the Great Recession.  The "Misery Index" increased on a number of fronts: the poverty rate, individual wealth, unemployment...the list could go on.

There was and still is a lot of hurt out there, as people slipped off their tenuous perch in the working or middle class slipped into poverty.

That's the conclusion I draw from the latest snapshot of the city provided by the American Community Survey done by the U.S. Census Bureau, a sample survey taken each year to gather data between each decennial census.

I compared the 2011 ACS with the 2007 ACS to compare and contrast the two data pictures of Philadelphia. The recession began in 2008, so 2007 was the last year the city's economy was doing reasonably well. [Keep in mind these are sample surveys so there is a margin of error in the data.]

Here is some selected data comparing 2011 with four years previously:

-- Median Household Income, a one-number barometer of collective wealth, went down.

It was $38,366 in 2007 (inflation adjusted to 2011 dollars) and $34,207 in 2011.

-- The number of people living in poverty rose significantly: from 23.8 percent of the city's population in 2007 to 28.4 percent last year. The numbers were 345,000 in poverty four years ago, compared to 433,600 last year -- an increase of nearly 89,000.

-- Not surprisingly, the number of unemployed increased as well -- from 71,100 workers in 2006 to 119,500 as of last year. 

-- The number of people who received food stamps went up dramatically: from 82,100 in 2007 to 144,500 last year.

Clearly, all of these numbers are connected: fewer jobs equals people losing income equals a fall into poverty or equals qualifying for food stamps and other government support programs.

You can see the shift by looking at income categories. In 2007, about 43 percent of the city's households were lower-middle class (with income between $25,000 a year and $75,000 a year.) The total was 243,000. The total last year was 233,000 -- a decline of 10,000.

At the other end of the scale, households with the lowest income (under $25,000) rose by 24,000 (from 208,000 in 2007 to 232,000 last year.)

The data doesn't spell it out, but you can deduce what is happening here: households who had two earners in 2007 may have one today -- the other was laid off. Households with one earner could have zero today as that worker lost his or her job to downsizing.

The poverty rate gives me the most concern. It is the highest in memory -- certainly since the Depression, when upwards to 35 percent of Philadelphians were unemployed.

The story isn't uniformly bad.

The number of households with income over $75,000 increased from 111,000 to 120,000, representing 21 percent of the total households in the city. [These income levels are not inflation adjusted].

On a pie chart it would look like this: the slice of households earning under $25,000 would come in at 39 percent; those from $25,000-to-$75,000 would be 40 percent; those $75,000-plus would be 21 percent.

It's not hard to see why the number of wealthier households rose when you look at the jobs picture. The number of jobs in almost every category (such as construction, manufacturing, transportation) decreased between 2007 and 2011 -- except for four strong performers: retail trade, professional services, eds and meds, and entertainment, accommodation and food services, all of which saw increases in the number of people employed.

The growth areas -- particularly professional services and eds and meds -- often provide the higher paying jobs. The areas that are sinking are a big provider of blue- and pink-collar jobs.

Parenthetically, thank heavens for the education/medical services sector, which now provides 31 percent of all jobs in the city [And was virtually recession proof.]

One other trend to mention: the number of foreign-born residents in the city increased at a strong clip, indicating continued migration from overseas. In 2007, where were 161,300 foreign-born in the city. Last year, the number had grown to 192,000 -- a 19 percent increase. Most of the new arrivals were from Asia.

Despite the recession being over (or, at least declared over) the picture remains grim: unemployment remains high [11.6 percent in the city]; the folks in the low-to-middle income range are being squeezed; the number of poor is increasing and job growth in some sectors cannot outpace job loss in others. This is known as a vicious cycle.

I can only offer one concrete idea to improve the situation: pray for a strong economic recovery to happen soon.

-- Tom Ferrick

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