Clearly poverty is a multi-faceted issue too complicated to be solved in one blog post, so I’ll focus on just this one aspect in my response to this bleg from AxisPhilly: poor people don’t have enough money.
Of all the problems poor people need help with, the biggest one is cash. And a policymaker trying to get people more cash has a few options.
– You can try to help people get jobs, but that’s hard when there’s still only about 1 job for every 4 people looking.
– You can try to reduce the cost of the biggest items poor people spend their money on – housing, transportation and food.
Michael Nutter is looking to do this the first way, and maybe that’ll work in the medium term. But since the biggest problem is not enough jobs, this is only really going to work if the national economy starts to pick up steam, or a bunch of people decide to start moving to Philadelphia, growing the economy. I’m also not sure how job training is supposed to help a 60-year old woman who’s out of work.
As for cash transfers, the late Philadelphia City Councilman David Cohen had succeeded in passing a wage tax credit, an excellent progressive idea that would have put more money in low-income families’ pockets, but then City Council voted to repeal it this summer before it ever took effect. The state government also had a number of tax-and-transfer programs, but Tom Corbett and Harrisburg Republicans made punishing cuts to them, and even eliminated Cash Assistance – one of the most effective, and least paternalistic anti-poverty programs the state had. There’s a lot that can be done to reduce poverty through tax-and-transfer programs, but the politics is ugly in our age of lean budgets and weak growth.
The most promising approach in my view is the last one – trying to reduce the prices of the things poor people spend most of their money on – housing and transportation.
This is by far the biggest problem poor people in Philadelphia are having. According to a recent report by the Center for Neighborhood Technology:
“In the Philadelphia region, moderate-income households are faced with average housing and transportation costs exceeding 90 percent of their income in some neighborhoods”
AxisPhilly is asking for big ideas, so here’s my favorite: make the public transportation system free to riders.
The Mayor of Tallinn, the capital of Estonia did this recently. One drawback is that this hasn’t yet been tried in a major city, so we don’t really know how it would work for Philly. But in the places its been tried, early signs predictably point to increased ridership and reduced road congestion. It seems intuitive though that completely cancelling the transportation bills for all the low-income and middle-class people who currently use SEPTA, or drive to work from SEPTA-served areas of Southeast PA and western NJ, would be a good way to put more money in the hands of poor and middle-class folks.
My preference would be to pay for this with a land value tax on land within a mile radius of all the SEPTA stations, to capture back some of the windfall that the public’s investment in rail transit has created for nearby landowners. This would induce more residential and commercial development on the land around transit stations, boosting ridership, and creating more revenue to fund the transit network.
The other thing we need to look at is housing, and I think the biggest problem there is that Philly has numerous zoning regulations that cap the housing supply, and push up rents. In many walkable neighborhoods the new code still bundles parking with apartments, and still restricts lot size and building height. It’s still too hard to build in general, and while the new code is a big step forward, City Council is already moving in the wrong direction by re-politicizing the approval process for some common building types.
Yes, rents are lower than in nearby New York City and Washington, DC but obviously they aren’t low enough if housing and transportation are eating up such a large percentage of people’s expenses. Just because rents are lower than two of the most expensive metros in the country doesn’t mean city politicians have an excuse to be complacent about lowering them even further through more total construction.