This is the first post of many exploring poverty and inequality in Philadelphia, and eventually my recommendations to help remedy this. Please see the introductory post for more details.
In this first post, I want to establish a very basic fact: Philadelphia suffers from an immense amount of poverty.
First, what does “poverty” mean? I’m using the official definition from the census, but we should also think about what this means in real terms, in everyday life. First, according to the Census Bureau, poverty is determined by a household’s earnings falling below a certain threshold in a year, before taxes. It is important to note that this only counts cash income, and does not include sources like capital gains (stocks, for instance). It is also important to note that these thresholds do not vary by geography, despite the drastically different costs of living and median incomes in different parts of the country. So, this indicator is clearly somewhat arbitrary and inaccurate. Despite this, the Census Bureau’s poverty indicator is one of the best tools we have at our disposal to get a broad picture of living conditions.
Below are a few of the thresholds as of 2017:
For a family of four with two children, the poverty threshold is $24,858 a year. Let’s imagine some simple scenarios to get an idea of what this is like in real terms. Imagine there are two adult earners in the household earning an equal amount, or $12,429. If they are married, they will be taking in $21,218 a year after taxes (assuming four deductions). They can’t buy a home—which is cheaper—due to income requirements for the down payment. So, they rent a two bedroom apartment for their family, which costs $1,013 a month at the median rate (this includes all associated costs, such as utilities). That leaves them with $9,062 for food, healthcare, education, transportation, clothing, entertainment, or any other costs at all for their family of four. Let’s assume a very conservative $568 (according to the USDA in 2014) a month for food and $200 a month for transportation (two adults taking public transportation twice a day). This adds up to $154 more than the family’s income. Basically, they can’t afford to get sick, seek further education, or purchase entertainment of any kind—let alone save a cushion for a rainy day.
How are they going to meet that gap in income and expenses? They’re going to downgrade to a one bedroom or studio, live in a cheaper, but unsafe neighborhood, eat less (and less healthy) food, and rely on various forms of assistance.
Now that we have a handle on what it means to live below the poverty line, consider this: As of the latest data from the census, one in four Philadelphians are living below the poverty line. More specifically, 25.9% of the population, or 392,356 people. Almost half of those people, or 183,208 people, lived in a household with an income less than half of the poverty threshold.
This is a very basic fact, but it is foundational and needs to be widely known if we are to change this in Philadelphia.
*Note: All census data I reference can be found here.