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Monitoring Philadelphia’s Economic Recovery

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Philadelphia continues its slow but steady job recovery as employment increased by 1,800 in September, led by growth in educational services, leisure, hospitality and government and supplemented by the gradual return of office workers. The unemployment rate declined from just under 20% in July 2020 to 8.1%.

Rising transit ridership, parking occupancy and pedestrian volumes in Center City reflect the full return of colleges and universities, the reopening of performing arts venues, the steady return of tourists, convention attendees, regional shoppers and the partial return of office workers. With the holiday shopping season just beginning and, assuming no recurring health crises, the recovery can accelerate.

The Center City District’s (CCD) November survey of 1,900 downtown storefronts found 80% of retailers and restaurants open for business, with nearly all premises that had temporarily closed during the shutdown now welcoming customers. An analysis of local sales tax revenue shows retail  in Center City recovering strongly with collections in Q2 2021 8% higher than pre-pandemic levels. By contrast, tax collections from Center City restaurants and bars, which face more constraints, have been slower to bounce back: Q2 tax receipts were only 67% of 2019 quarterly revenues. Outdoor seating on sidewalks and at streeteries helped compensate for indoor restrictions, with 6,694 outdoor seats deployed in the District in September.

Philadelphia still faces major challenges. The highest paying jobs – including professional, financial and business services, sectors whose space needs and purchasing power create opportunities in building services, transportation and in retail and restaurants – are the very jobs most easily performed remotely. Job loss combined with remote work has caused wage tax collections to remain consistently below 2019 and 2020 levels with Q3 2021 revenues 11% lower than Q3 2019.  The problem is compounded because 47% of Center City workers and 35% of citywide workers commute from the suburbs and are exempt from the wage tax if they have been directed to work from home. This ought to be a spur for the City’s tax reform committee since the pandemic has starkly revealed the City’s fiscal vulnerability due to its unusual dependence on wage and business taxes. 

At the same time, the pandemic creates opportunities for Philadelphia to attract remote workers and firms from other cities given our affordability, amenities and ease of access. To support this goal, CCD has launched a multimedia advertising campaign, linked to the website www.Phillyworks.com.

For a narrative of trends, along with explanatory charts tracking the recovery, download the 10-page report at- Monitoring Philadelphia's Economic Recovery, November 2021.