Poverty Is an Income Problem

Philadelphia's poverty rate rose to 20.4 percent in 2025, up from 19.7 percent the year before, according to new Census Bureau data, and a number moving in that direction should change how the city talks about almost everything else it is trying to do.

One in five of our neighbors now lives below a line that sits at $32,750 for a family of four, in a city where the median household income is $67,400. The rate remains well below the 28.4 percent recorded in 2011, so the long direction of the last decade was the right one, and that is exactly why this reversal deserves attention. It tells us that the progress the city made has reached the limit of what it can deliver, and that the families still below the line are there for reasons the current approach is not reaching.

Part of the reason is that we have built a larger system for managing poverty than we have for ending it. Assistance programs matter, and a family that loses food assistance feels the loss immediately, but assistance was designed to soften poverty rather than to close it. Poverty closes when household income rises and stays risen, and income rises in a city when people can get hired, get promoted, open a business that survives its first years, and buy a home that builds equity instead of paying rent that builds someone else's. Council's $800 million H.O.M.E. borrowing, approved in 2025 to create or preserve 30,000 homes, is a start on the ownership side of that work.

The city needs to invest in workforce development, and in opportunities for single moms and for folks in recovery to access training that can put them back on the map of employment. We need programs that will help folks get from trained to employed. The budget Council approved for fiscal 2027 puts real money behind workforce development, and the test of that investment is whether it carries people the full distance from training into a job that lasts.

We need to find ways to not only decrease costs for people but also help them increase their income, because right now our focus is on how we can decrease costs and not on how we can increase income. The tax plan Council passed in the fiscal 2026 budget moves on the cost side, lowering the wage tax and the business tax step by step over five years, although ending the exemption for the first $100,000 of business receipts pulls the smallest businesses in the other direction and the city should keep watching that tradeoff. The POWER Act, which Council passed unanimously in 2025, works on the income side by strengthening enforcement against wage theft and retaliation, so the income people earn is income they actually keep. We also need to encourage people to explore entrepreneurship, because entrepreneurship can take people's skills and monetize them to expand their sources of income.

This is where capital comes in. When we use capital to train people and help them develop skills, those skills can turn into business opportunities that they can explore and grow right here in the city. The 2026 budget started moving this way, putting about $19 million in direct capital for small businesses through lending and grant programs already working in the city, along with a $5 million Catalyst Fund for businesses early in their growth. Philadelphia is known for being a hard place to start and build a business, and we need to end that.

Philadelphia has spent decades learning how to manage poverty, and the new number says that knowledge has carried us as far as it can. The work now is to make poverty rarer, and that work begins with income, with the jobs, businesses, and homes that income comes from, and with a lending system that finally reaches every neighborhood in the city.