Tuesday, July 29, 2008
A leading business website, Inc.com, billed as 'The Daily Resource for Entrepreneurs', has released its annual list of 'The Best Cities for Doing Business'. Where do you think that Philadelphia ranked on their list of 393 metropolitan areas? A top-ten city by population, you would think that Philly would probably be there somewhere among the leaders, right? Well, before we get too excited, let's examine some of the criteria that the e-zine factors in order to formulate the rankings. What 'Inc.com' does as an overall approach is that they analyze job-growth data as supplied by the Bureau of Labor Statistics for the previous calendar year on 393 metropolitan statistical areas across the country. The list just released was specifically derived from analysis of three-month rolling averages of the BLS state and area unadjusted employment data from January 1995 to September 2006, and uses four measures of growth to rank all areas for which data was available for the past ten years. These four measures are: recent growth trend, analyzing this and last year; midterm growth, averaging 2001-06 rates; long-term trend, analyzing 1995-2006 data; and current year growth. This data includes non-farm employment, manufacturing, financial services, business and professional services, educational and health services, information, retail and wholesale trade, transportation and utilities, leisure and hospitality, and government. While any time you attempt to put together a ranking across a broad spectrum of categories you are going to get subjectivity in the analysis of those categories, the fact is that this is not a study and listing that is done haphazardly and frivolously. It is a serious look at relevant statistics in order to determine areas that are growing, and that ultimate also exposes areas that are stagnating. On the surface, Philly would seem to have much going for it, and it does. We have major employers headquartered here, places like Comcast. We have an excellent mass-transit system including Septa, Amtrak, and Patco. We have first-class entertainment facilities such as the Avenue of the Arts, varied quality sports facilities like The Linc and Citizens Bank Park and the Palestra, a world-class Art Museum, a top-notch zoo, etc. Easy transportation access through I-95 by land, the Delaware River by sea, and Philadelphia International Airport by air among others. And we have people, lots of people, and a variety of them by racial, ethnic, religious, cultural, sexual and any other orientation that you can describe. There is much to like about the Philadelphia area, politics aside, and you do have to set aside politics. which has been a mess for a long time here in Philly. There is much to like about Philly, tax-status aside, and you do have to set aside our taxation system. Here in Philly, our tax policies are typically liberal for a large city, and liberal Democratic Party taxation means that we tax unfairly, more than other cities, and on things that other cities do not. In recent decades, our tax policies have led to the loss of 250,000 jobs and the loss of a half-million residents. Other cities are growing, but Philly is in decline, and we continue to lose jobs and residents every single year. 'Philadelphia Forward', an organization put together in an attempt to reform Philly's tax policies, reports that "the typical city residents tax burden is 50% higher than the tax burden for a suburban resident at a similar income level." In other words, living here in the city kills your take-home pay, and it does the same to business profits. Most cities do not tax your wages, but we do, and we do it at a rate of 3.98%, the highest in the nation. Philly taxes business at the highest rate of all major American cities, and its real estate tax assessment system can be described as unfair and antiquated at best. In short, we have all the pretty things and look nice on the outside, but we are decaying on the inside. When most people look to move their families into an area, or evaluate where their families will continue to live as they grow, and when business looks to move into or remain in an area long term, they look closely not only at the surface features, but also look under the hood. When you look under the hood at the engine that drives Philadelphia, you find an entrenched liberal Democratic government that taxes and spends more than almost any other entity in the United States. No wonder then when I scan down the list of metro areas in the Inc.com rankings looking for Philadelphia and cannot find us among the top ten, where our population ranking sits. Nope, not even in the top twenty, or the top one hundred. Wow, scanning down, scanning down. Ah, found us. There we are, ranked out of 393 metro areas at number......351! Ouch. Well, at least its better than last year when we were ranked at number 392. Yikes! The bottom line is that there is really no reason to live inside the City of Philadelphia unless you have to, which is one major reason that the city clings to its antiquated policy of forcing city employees to live inside the city limits. If Philly updated its policy and allowed city employees to live wherever in the region they wanted, I can guarantee you that it would lose thousands of more residents in the ensuing half-decade. The bottom line that is revealed by the Inc.com ranking and the Philadelphia Forward assessments is that Philadelphia is a big city in big trouble, and showing no signs of changing its ways. We will continue to look pretty on the outside, but only because our politicians will continue to tax heavily to maintain that pretty look. Meanwhile, Philadelphia will continue to die slowly on the inside, further deteriorating that tax base of businesses and residents, and thus raising the tax burden continually on those who choose to. or are forced to, stay behind. Business will continue to mostly flee the city, as chemical giant Rohm & Haas is about to do. What can change this status? I have been saying it for a long time. Philadelphia needs a real, viable, political alternative. A healthy Republican Party that espouses lower taxes, less spending, a more business-friendly environment, and more conservative solutions to social problems such as crime and education. Unfortunately, that shows no signs of happening anytime soon, or even within the rest of my lifetime. As always, the title of this entry is a link to more information, in this case to the article and rankings in question.