PWIB | Philadelphia Workforce Investment Board

A city’s economy is built on the talents and knowledge of its residents. So how does Philadelphia’s low level of educational attainment translate to its economic bottom line?

The costs of undereducation are high. The problems plaguing our city and our neighborhoods can be tied directly to the issues of an undereducated workforce and joblessness. By insufficiently preparing our city’s residents for the employment opportunities of today and tomorrow, we are stifling the growth of our current businesses, struggling to attract new opportunities, further depleting our city’s already over-extended tax base, increasing the strain on our city’s public resources, and impacting Philadelphia’s economic growth overall. Consider this fact: the average person who does not have a high school diploma will cost taxpayers about $274,000 over the course of their lifetimes, including over $83,000 in criminal justice costs.

The limited supply of high quality employees and a tax structure unfavorable to business impedes the establishment of new companies and the expansion of existing ones. Developing a more qualified labor force leads to a broadening of our tax base. As the labor force connects to paid work, their earned income reduces the individual tax burden overall and contributes to an increased revenue stream for the city. The bottom line: increasing the educational attainment levels of our residents would generate 10% economic growth or a $1.8 billion increase in the city’s wage base.

Put simply, expanding the wage base is the win-win solution to the no-win decision Philadelphia public officials continually face: cutting services or increasing taxes. Additional public revenues would significantly compensate for city revenues lost by lowering taxes, and could lead to economic growth, increased employment, decreased crime, and help Philadelphia truly become the next great city.

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