Restructuring the Philadelphia Region: Metropolitan Divisions and Inequality

2 Employment Opportunity

2 EMPLOYMENT OPPORTUNITY  A t the close of World War II both the United States and the Philadelphia region were known for their manufacturing prowess. Yet both already had seen manufacturing’s share of employment begin to decline . Although in 1950 manufacturing held a larger job share in the Philadelphia region than in the nation as a whole, improvements in communication and transportation, technological shifts, differences in labor costs, and other factors allowed production to relocate elsewhere and soon caused the economic paths of the region and the nation to diverge. By the late 1980s, manufacturing in both the city and suburbs of the Philadelphia region fell below its role in the nation.1 Since that time, the gap between the region’s and the nation ’s industrial profiles has continued to widen. The changes in Philadelphia resemble those experienced by other older metropolitan regions as manufacturing there faced similar challenges and managers continued to seek new markets and lower-cost sites in the United States and abroad. This chapter explores some of the implications of these changes for the metropolitan economy and their consequences for regional workers’ earnings and economic prospects. It begins with a brief overview of the structure of the regional economy, showing that greater Philadelphia duplicates many national trends: the decline of manufacturing and the rise of economic activities based upon education, health care, biomedicine and tourism. Then we look at the geographic patterns created by these economic shifts, especially the growing spatial diffusion of the metropolitan economy, as decentralized and often private decision making has trumped coordinated governmental efforts to shape development. While spatial deconcentration has characterized urban areas since at least the mid-nineteenth century, federal housing policies, the widespread adoption of the automobile, and federal highway construction promoted the rapid suburbanization of both population and jobs after World War II. Understanding where jobs are located is important for understanding regional economies because the ability of workers to commute to jobs depends upon the location of the employers, and different industrial sectors have historically had different locational requirements. Today, more than 70 percent of the Philadelphia region’s jobs sit in the suburbs, often in areas accessible only by automobile and often in areas distant from housing affordable to their workers. Thus the spatial organization of the regional economy has real consequences for workers’ lives. The New Regional Economy If the nation has moved into the postindustrial era, the Philadelphia region has moved more swiftly. Table 2.1 shows that, relative to the nation, the region ’s jobs are even more concentrated in wholesale, finance-insurance-real estate , advanced technology services, business services, consumer services, and nonprofit organizations, and regional jobs are less involved in agriculturemining -construction, transportation-communication-utilities, retail, advanced technology manufacturing, and other manufacturing.2 The nonprofit sector—which includes medical care organizations, hospitals, clinics, social E M P L O Y M E N T O P P O R T U N I T Y 37 TABLE 2.1 PRIVATE SECTOR EMPLOYMENT BY INDUSTRY, UNITED STATES AND PHILADELPHIA METROPOLITAN AREA, 2004 (PERCENT) Philadelphia Industry United States Metropolitan Area Agriculture-mining-construction 7.0 5.8 Advanced technology manufacturing 3.4 2.7 Other manufacturing 9.8 7.2 Transportation-communication-utilities 5.7 5.6 Wholesale 5.6 5.8 Retail 22.7 20.6 Finance-insurance-real estate 7.8 8.4 Advanced technology services 5.1 6.2 Business services 8.8 11.5 Consumer services 14.9 15.7 Nonprofit organizations 9.3 10.5 Total 100.0 100.0 (N)* (115,323,983) (2,326,017) *Zip Code Business Patterns does not give detailed employment by industry totals; totals were estimated by multiplying medians of establishment size categories by number of establishments in the categories. Source: U.S. Census, Zip Code Business Patterns 2004, 2005. service agencies, institutions of higher education, and arts organizations—is particularly prominent in Philadelphia. Although the region has long been recognized as a center for medical care and research, with five medical schools, the Fox Chase Cancer Center, and eighty-five nonprofit hospitals, it has only recently begun to acknowledge the economic and social significance of its more than sixty colleges and universities. As a center for higher education , the Philadelphia metropolitan area has few competitors. Higher education and medical institutions are frequently grouped together with other economic organizations in related activities...