Unemployment was worse in Philadelphia than in many other big cities last year, Pew report shows

The pandemic hammered Philadelphia’s labor market harder than in other big cities last year, wiping out tens of thousands of jobs and widening the gap between the city and national jobless rates, according to a new report.

Philadelphia’s average unemployment rate last year trailed only Detroit and Cleveland among 10 major U.S. cities, according to the Pew Charitable Trusts’ annual State of the City report, released Tuesday. Philadelphia’s average unemployment rate of 12.2% was more than four points above the U.S. average, compared with a difference of less than two points in 2019.

The jobless statistics suggest that Philadelphia has a deeper economic pit to dig out from than similar cities. Washington, for example, had slightly higher unemployment than Philadelphia before the pandemic in 2019. But the nation’s capital saw its average jobless rate increase just 2.4 percentage points last year. Philadelphia’s increased by seven points.

“The cities got hit differently. There’s no question about it,” said Larry Eichel, senior adviser to Pew’s Philadelphia research and policy initiative.

Pew did not explain why Philadelphia fared worse than other cities. But it noted the sectors that helped fuel the city’s resurgence during the last decade — hospitality, restaurants, and arts and culture — shut down early in the pandemic, with some set to reopen later at limited capacity. Philadelphia remains plagued by high poverty, lower educational attainment, and other long-standing challenges.

Pew’s report compared Philadelphia with nine cities that were similar in size and demographics, were post-industrial northern cities, or located on the East Coast.

The economic impact of the pandemic was sudden and enormous. Philadelphia lost about 100,000 jobs in March and April last year as governments ordered stores and restaurants to close. Philadelphia recovered about half of those jobs by year’s end, finishing with 50,000 fewer jobs than it had at the start, according to Pew. The leisure and hospitality sector alone lost almost 25,000 jobs.

The city’s unemployment rate more than tripled from 5.9% in February 2020 to 18.2% in June. Philadelphia ended the year with a jobless rate of 9.3%, but it has since increased to 11.2% as of February 2021, according to the U.S. Bureau of Labor Statistics. That’s five points higher than the nation’s unemployment rate that month.

The gap between the city and U.S. jobless rate is much worse than the aftermath of the Great Recession, Eichel noted. The difference between jobless rates in Philadelphia and the U.S. were only a percentage point or less in 2009 and 2010, he said.

Pew is hosting a panel discussion with policymakers and economic development experts, moderated by The Inquirer, about Philadelphia’s economy. The virtual event, “State of the City 2021: Small Businesses, Jobs, and Philadelphia’s Road to an Inclusive Recovery,” will be held online at 9 a.m. on April 30.