Philadelphia’s Labor Market Executive Summary ...... 0 April 2021

Data Performance and Labor Market Information Team

Using the latest available data, this quarterly

update offers insight into Philadelphia’s labor market, industry mix, and economic Contents development.

Executive Summary 1 In 2018, Philadelphia’s institutional and community leaders col- laborated to develop a comprehensive workforce development Special Note: COVID-19 Pandemic 2 strategy. This document, Fueling Philadelphia’s Talent Engine, calls on Philadelphia Works, Inc. to serve as the city’s hub of labor market and economic reporting and analysis. Under this mandate, this Overall Employment 3 quarterly report provides insight into key measures of economic activity, providing leaders across public and private institutions an Private Industry 7 easy-to-access update on how Philadelphia’s economy and labor force continue to evolve.

Occupational Employment 12

For more insight into Philadelphia’s labor force, economic Employer Demand 16 characteristics, and the ongoing recovery from the COVID-19 employment crisis, visit the Data and Trends page of our website. Philadelphia’s Labor Force 22

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Philadelphia Works, Inc. develops and manages smart workforce solutions that respond to business needs and increase economic opportunity for all Philadelphia residents.

State of the Labor Market | Special Note on COVID-19 Impacts in PhiladelphiaState of the Labor Market

State“Continued of theeconomic Labor growth Market is critical to the future of our city and region, and is dependent upon a strong, skilled workforce.” “ContinuedFueling Philadelphia’s economic Talent growth Engine is critical to the future of our city and region, and is dependent upon a strong, skilled workforce.” Fueling Philadelphia’s Talent Engine Executive Summary

• Philadelphia’s labor market continues to experience the effects of the COVID- 19 pandemic and economic crisis. As of February 2021, more than 66,000 Philadelphia residents have lost employment. Nevertheless, there are signs of improvement, with overall employment and labor force participation rising.

• By industry, the Accommodation and Food Service sector has experienced the most significant impacts, losing more than 30,000 jobs since February 2020. As vaccination rates have increased, however, we have seen strong growth in service-sector employment.

• Despite concentrated losses among low-wage and low-skill employment, demand remains strong for high-skill workers, especially in healthcare and information technology.

• Beyond the current crisis, Philadelphia’s economy struggles with economic and racial injustice. By race and ethnicity, non-white Philadelphians continue to experience disproportionately negative employment outcomes.

This Photo by Unknown Author is licensed under1 CC BY-SA State of the Labor Market | Special Note on COVID-19 Impacts in Philadelphia

Special Note on COVID-19 Impacts in Philadelphia

Due to constraints on the timeliness of available data, many of Weekly Initial Claims for State Unemployment Benefits by Philadelphia the figures included in this report reflect pre-recession and Residents: January 2020 to February 2021 pre-pandemic conditions. While the long-term effects of the COVID-19 employment crisis remain unknown, other 40,000 reporting and analysis conducted by Philadelphia Works has shown where immediate impacts are being felt. Black and 35,000 African American workers, young workers, and those employed in low-wage service sectors have been dis- 30,000 proportionately affected by the current crisis. In many ways, these recent trends reinforce and exacerbate the economic 25,000 inequities already occurring in Philadelphia. Since March 15, 2020, more than 260,000 20,000 Philadelphians have submitted unemployment 15,000 claims with the state of Pennsylvania.

An unknown number more have filed for emergency 10,000 Weekly Claims Initial UnemploymentWeekly pandemic unemployment compensation through the federal government. While most of these initial claims were filed in 5,000 March and April, thousands of Philadelphians continue to receive unemployment benefits, experiencing either total 0 unemployment or a reduction in hours.

2 State of the Labor Market | Special Note on COVID-19 Impacts in Philadelphia

Overall Employment

This Photo by Unknown Author is licensed under CC BY-SA 3 State of the Labor Market | Overall Employment

Overall Employment

Since 2007, just prior to the Great Recession, employment in As of February 2021, the overall employment of Philadelphia Philadelphia has witnessed strong growth. By February 2020, the residents had declined by more than 66,000. total number of employed Philadelphians had grown by more than As vaccination rates across the country have increased, however, 120,000 individuals, a 20% increase over pre-recession levels employment opportunities have also grown. In recent months in (Figures 1 and 2). More recently, the COVID-19 economic crisis has particular, we have seen stronger growth among hard-hit had major impacts on employment and labor force participation in industries and occupations. the city.

Figure 1: Labor Force and Total Employment in Philadelphia: January 2007 to February 2021

Source: Philadelphia Works Analysis of BLS, LAUS 4 State of the Labor Market | Overall Employment

In the second quarter of 2020, Philadelphia’s Figure 2: Relative Change in Employment: January 2007 to February 2021

unemployment rate peaked at more than 18%,

roughly two percentage points higher than that of the state and four percentage points higher than that of the United States overall (Figure 3).

While unemployment rates have improved, they have not returned to pre-COVID levels. As of February 2021, the city’s unemployment rate remained at 11.2%.

11.2%

February 2021 Figure 3: Unemployment Rate: January 2007 to February 2021 Unemployment Rate

-66,100

Decline in Employment February 2020 to February 2021

Source: Philadelphia Works Analysis of BLS, LAUS 5 State of the Labor Market | Overall Employment

In Philadelphia, service sectors, including hard-hit Food Service and Though year-over-year employment remains down across all Accommodation establishments, have been among the largest industries, these more recent patterns of growth indicate a contributors to recent employment growth. relatively strong recovery. As vaccination rates increase and the risk of serious infection falls, demand for service sector employment is In February 2021, Philadelphia employers added about 11,000 new likely to increase. jobs to their payrolls. More than half of these were in the Educational Services sector, while nearly one-third were in the For the most up-to-date employment information, visit the Data Leisure and Hospitality sector (Table 1). and Trends page of our website.

Table 1: Change in Employment by Industry Sector, February 2021

Source: Philadelphia Works Analysis of PA CWIA, Non-Farm Payroll 6 State of the Labor Market | Overall Employment

Private Industry

This Photo by Unknown Author is licensed under CC BY-NC-ND 7 State of the Labor Market | Private Industry: Q3 2020

Figure 4: Annual and Quarterly Change in Private Employment by Industry Sector: Q3 2020 Private Industry: Q3 2020

The COVID-19 pandemic and resulting economic crisis

have had uneven effects across Philadelphia’s economy. By industry, service sectors have seen the most sig- nificant overall job losses.

However, despite its year-over-year decline, Accom- modation and Food Service employment grew by about 8,000 jobs in the third quarter of 2020. Though we have seen more modest increases in recent months, the industry’s growth last summer indicates its potential to recover once social distancing measures are relaxed.

Similar patterns can be seen in other heavily affected sectors, such as Educational Services and Retail Trade. No industry sector experienced significant declines in the third quarter of 2020.

Federal QCEW data are released with a six-month delay. For more recent employment figures, visit the Current Labor Market Conditions page of our website.

Source: Philadelphia Works Analysis of BLS, QCEW 8 State of the Labor Market | Private Industry: Q3 2020

Table 2: Largest Employment Growth Over Previous Quarter: Q3 2020

Where the chart in Figure 4 shows high-level industry sectors, Table 2 and Table 3 show both employment growth and decline for more detailed sectors. The third quarter growth in Accommodation and Food Service employment, for example, is made up almost entirely of Food Service workers, further suggesting the industry’s potential for recovery.

Economic Base and Specialization

Philadelphia’s economy and labor force are anchored by key institutions in education and health care. By Table 3: Largest Employment Declines Over Previous Quarter: Q3 2020 industry, private-sector employment in Educational Services, Hospitals and Health Care, and Professional and Technical Services serve as the city’s economic base. Combined, these sectors employ nearly half of all Philadelphia workers (Table 4).

Compared to the United States overall, Philadelphia’s economy is heavily specialized in Educational Services, Air Transportation, Arts and Entertainment, and Social Assistance. These industry sectors employ more people in Philadelphia than would be expected based on the size of the city’s labor force and national patterns of employment (Table 5).

Source: Philadelphia Works Analysis of BLS, QCEW 9

State of the Labor Market | Private Industry: Q3 2020

Table 4: Top 10 Industry Sectors by Employment in Philadelphia: Q3 2020

Table 5: Top 10 Industry Sectors by Local Specialization in Philadelphia: Q3 2020

Source: Philadelphia Works Analysis of BLS, QCEW 10 State of the Labor Market | Private Industry: Q3 2020

Figure 5: Distribution of Philadelphia Businesses and Employment by More than 30% of Establishments with fewer than 5 Establishment Size, Q3 2020 employees are in the retail, food service, or accommodation sectors.

of all Employment is in 6% Businesses with Fewer In 2020, nearly 60% of all Philadelphia businesses em- than 5 Workers ployed fewer than 5 workers, making up 6% of the city’s total employment (Figure 5). During the third quarter of 2020, employment grew across businesses of most sizes. Those with fewer than 50 employees saw the most significant relative growth.

Figure 6: Percent Change in Philadelphia Employment by Establishment 58% Size Over Previous Quarter, Q3 2020 of Philadelphia Businesses Employ Fewer than 5 9% Workers 8%

7% 6% 6%

4%

1% 0% 1%

The Small Business Administration typically defines a small business as one with fewer than 500 employees.

Source: Philadelphia Works analysis of PA CWIA, Employment by Size Code 11 State of the Labor Market | Private Industry: Q3 2020

Occupational Employment

This Photo by Unknown Author is licensed under CC BY-SA 12 State of the Labor Market | Occupational Employment Estimates

Occupational Employment Estimates

By occupation, recent patterns of employment in Philadelphia have By wage and educational attainment, COVID impacts are ex- largely followed national trends. Figure 7 below depicts local and acerbating existing patterns of inequity. The vast majority of em- national employment change along horizontal and vertical axes and ployment losses occurring in 2020 were concentrated among low-skill overall local employment in the size of each bubble. As with Private and low-wage occupations (Figures 8 and 9). The figures reflected in Industry, COVID-19 is disproportionately affecting those in service- this section are derived from an economic model, based on industry oriented occupations. employment in the second quarter of 2020.

Figure 7: Percent Change in Employment for Occupations with at least 2,000 Workers in Philadelphia, December 2019 to June 2020 5%

Home Health Aides

0% Light Truck Drivers Fast Food Counter Workers -5%

Restaurant Supervisors % Change Nationally % Change -10% Bartenders, Servers, Dishwashers, and Cooks

-15% -20% -15% -10% -5% 0% 5% 10% 15% % Change in Philadelphia

Source: Philadelphia Works Analysis of data from EMIS, Inc. 13 State of the Labor Market | Occupational Employment Estimates

Table 6: Largest Occupations in Philadelphia, June 2020 Annual Annual SOC Occupation 2020 Jobs ▼ Change Change % 31-1128 Home Health and Personal Care Aides 35,100 1,050 3% 29-1141 Registered Nurses 27,200 -260 -1% 25-1099 Postsecondary Teachers 20,400 -330 -2% 43-9061 Office Clerks, General 18,700 -670 -3% 35-3023 Fast Food and Counter Workers 18,700 -2,230 -11% 43-4051 Customer Service Representatives 13,400 -330 -2% 41-2011 Cashiers 11,900 -780 -6% 41-2031 Retail Salespersons 11,700 -1,140 -9% 53-7062 Laborers and Freight, Stock, and Material Movers, Hand 11,300 -350 -3% 43-6014 Secretaries and Administrative Assistants, Except Legal, Medical, and Executive 10,700 -340 -3%

Table 7: Top Occupations with at least 2,000 Employees by Annual Rate of Decline, December 2019 to June 2020 Annual Annual SOC Occupation 2020 Jobs Change Change % ▲ 35-3011 Bartenders 3,300 -720 -18% 35-3031 Waiters and Waitresses 9,800 -2,100 -18% 35-9021 Dishwashers 2,400 -500 -17% 35-2014 Cooks, Restaurant 5,900 -1,170 -17% 35-9011 Dining Room and Cafeteria Attendants and Bartender Helpers 2,200 -400 -16% 35-1012 First-Line Supervisors of Food Preparation and Serving Workers 4,500 -650 -13% 35-3023 Fast Food and Counter Workers 18,700 -2,230 -11% 41-2031 Retail Salespersons 11,700 -1,140 -9% 53-3058 Passenger Vehicle Drivers, Except Bus Drivers, Transit and Intercity 4,200 -362 -8% 25-2011 Preschool Teachers, Except Special Education 2,400 -200 -8%

Source: Philadelphia Works Analysis of data from EMIS, Inc. 14 State of the Labor Market | Occupational Employment Estimates

Figure 8: Occupational Employment Change by Median Wage in

Philadelphia, December 2019 to June 2020

Less than $15 $15 to $30 $30 to $45 $45 to $60 $60 and Higher 0 84% -2,000 Of employment declines were concentrated among occupations in the bottom one-fifth of -4,000 the wage spectrum -6,000

-8,000 Change inEmployment Change -10,000 86% -12,000 Of employment declines were among Figure 9: Occupational Employment Change by Typical Degree Requirements occupations typically requiring a high school in Philadelphia, December 2019 to June 2020 diploma or no educational credential Master's Degree or Higher During the recovery from the Great Recession, Bachelor's Degree occupational growth in Philadelphia was highly

Some College or Associate's Degree bifurcated by wage and education. Gains were concentrated among low- and high-paying High School Diploma or Equivalent opportunities, following a national pattern of growing income inequality. The COVID recession Less than High School is having major impacts on low-skill and low- wage employment, exacerbating existing inequities.

Change in Employment

Source: Philadelphia Works Analysis of data from EMSI, Inc. and BLS, OES 15 State of the Labor Market | Occupational Employment Estimates

Employer Demand

This Photo by Unknown Author is licensed under CC BY-SA 16 State of the Labor Market | Employer Demand

Employer Demand

As a proxy for employer demand in Philadelphia, this section presents the characteristics of unique online job postings. While these data provide helpful insights, we must keep in mind 56,200 their limitations. First, postings are categorized by a computer program and are thus subject to Unique Job Postings this Quarter

error. Second, since these postings include only those published to online job boards, they potentially exclude demand not advertised online. This exclusion may further bias the characteristics presented here, as the types of employment opportunities advertised online are often inherently different from those that are not. +5,000 Figure 10: Monthly Job Postings in Philadelphia, Previous 24 Months Change in Total Postings Over Previous Quarter

Source: Philadelphia Works Analysis of Burning Glass, Labor Insight 17 State of the Labor Market | Employer Demand

Top Posting Employers Top In-Demand Certifications

Penn Medicine o Driver’s License o Deloitte Registered Nurse o First Aid CPR Thomas Jefferson University o Basic Life Saving (BLS) Comcast o Advanced Cardiac Life Support (ACLS) Health Care Service Corporation o CDL Class A University of Pennsylvania o Certified Public Accountant (CPA)

Children’s Hospital of Philadelphia IBM Top In-Demand Skills Temple University Health System o Customer Service o Scheduling Accenture o Microsoft Excel KPMG o Microsoft Office Allied Universal o Cleaning Aramark o Budgeting o Sales Einstein Healthcare Network

Specialized and Software Skills

Source: Philadelphia Works Analysis of Burning Glass, Labor Insight 18 State of the Labor Market | Employer Demand

Figure 11: Top Posted Occupations in Philadelphia, January to March 2021

Monthly job posting updates can be found on the At a Glance page of our website.

Source: Philadelphia Works Analysis of Burning Glass, Labor Insight 19 State of the Labor Market | Employer Demand

Figure 12: Top Posting Industries in Philadelphia, January to March 2021

Industry Spotlight Food Service and Drinking Places

Climbing three spots over the previous quarter, Food Service and Drinking Places posted more than 2,500 positions from January to March 2021. Waiters and Waitresses were the most commonly posted occupation, while Aramark was the top posting employer. Nearly 200 postings requested a ServSafe certification.

Source: Philadelphia Works Analysis of Burning Glass, Labor Insight and BLS, OES

Source: Philadelphia Works Analysis of Burning Glass, Labor Insight 20 State of the Labor Market | Employer Demand

Figure 13: Education and Experience Requirements Indicated by Job Postings in Philadelphia, January to March 2021

For online job postings indicating a minimum

level of education, about 70% requested a bachelor’s degree or higher.

Figure 13 displays job postings from the previous three months segmented by requested levels of education and experience. While a bachelor’s degree is requested for roughly half of all postings, an additional 20% request a master’s degree or higher. Note that these results include only postings that indicate a minimum level of education and therefore do not include those where no minimum education is required or requested.

Source: Philadelphia Works Analysis of Burning Glass, Labor Insight 21 State of the Labor Market | Employer Demand

Philadelphia’s Labor Force

This Photo by Unknown Author is licensed under CC BY-NC-ND 22 State of the Labor Market | Philadelphia’s Labor Force

Figure 14: Total Population and Labor Force Participation by Age and Binary Sex in Philadelphia’s Labor Force Philadelphia, 2019 Lighter shaded areas represent the population not participating in the labor force. While Philadelphia’s labor force has grown in recent years, employment outcomes vary by race, ethnicity, and educational attainment.

Using data available from the American Community Survey, this section presents the demographic char-

acteristics of Philadelphia’s workforce. These figures LaborParticipation Force represent individuals living in Philadelphia, regardless of where they work. Due to their lag, the most recent available data do not reflect the impacts of the COVID- 19 pandemic.

By age and binary sex, individuals between the ages of 25 and 34 make up the largest portions of Philadelphia’s population and labor force (Figure 14). For both men and women, labor force participation among these age cohorts is between 75% and 85%, higher than the overall rate of 62%.

Recent growth in the city’s labor force, as discussed in the previous section, has been driven by an increase in participation among women and an increase in population among individuals 25 to 34. Again, these figures represent Philadelphia residents and therefore do not capture workers commuting into the city, a demographic that is much more likely to be older.

Source: Philadelphia Works Analysis of U.S. Census Bureau, ACS 5-Year Estimates 23 State of the Labor Market | Philadelphia’s Labor Force

Figure 15: Rates of Unemployment and Labor Force Participation by Race and Ethnicity, 2019 70% 14%

60% 13% 65% 12% 61% 60% 12% 58% 50% 58% 10% 40% 47% 8% Labor Force Participation Rate Among 8% 30% 6% Black and African American 7%

Philadelphians in 2019 20% 5% 4% Uneployment Rate Uneployment

10% 2% Labor Force Participation Rate Participation Force Labor 0% 0% American Indian Asian Black or African Hispanic or White Residents of color are more American Latino likely to be out of the labor Labor Force Participation Unemployment force and unemployed. Figure 16: Rates of Unemployment and Labor Force Participation by Race, 2019

Among American Indian, Asian, Black and African American, and Hispanic or Latino Working Age residents, labor force participation was Population 58% 43% much lower and unemployment was much higher than for their white peers (Figure 15). Labor Force 8% 39% 8% 45%

In 2019, while Black and African American residents made up 58% of Philadelphia’s Employed 8% 37% 8% 47% working age population, they made up just 37% of the city’s employed population (Figure 16). Asian Black or African American Other Race or Multiracial White

Source: Philadelphia Works Analysis of U.S. Census Bureau, ACS 5-Year Estimates 24 State of the Labor Market | Philadelphia’s Labor Force

In 2020, during the COVID-19 employment crisis, Figure 17: State Unemployment Claims Relative to 2018 Labor Force Estimates by Black and African American Philadelphians were Race and Ethnicity, March to December 2020 much more likely to have filed initial claims for Initial Claims unemployment benefits and to have received Mar. 2020 to 48% 12% 33% benefits for a longer period than their peers. Feb. 2021 Making up approximately 40% of Philadelphia’s labor force in 2019, Black and African American Labor Force workers represented nearly half of all initial claims 2019 39% 13% 41% filed from March 2020 to February 2021 (Figure Estimates 17). During the last week of February, Black and Black Hispanic Pacific Islander or Asian White African American Philadelphians filed almost 60% of continued claims. Figure 18: State Unemployment Claims Relative to By geography, state unemployment claims were 2018 Labor Force Estimates by Census Tract, March concentrated in Philadelphia’s north and western to December 2020 neighborhoods (Figure 18). These areas, home to significant BIPOC populations, faced existing

employment barriers, concentrated poverty, and lower levels of educational attainment.

The COVID-19 Employment Crisis has d isproportionately affected Black and African American workers.

Source: Philadelphia Works Analysis of U.S. Census Bureau, ACS 5-Year Estimates; PA CWDS UC Claimants 25 State of the Labor Market | Philadelphia’s Labor Force

Figure 19: Rates of Unemployment and Labor Force Participation by Educational

By educational attainment, individuals Attainment, 2019 with less than a bachelor’s degree are 100% 20% more likely to be unemployed and less likely to participate in the labor force 80% 88% 16% 16% (Figure 19). For those with less than a 78% 60% 67% 12% high school diploma, employment 12% outcomes are significantly worse. 40% 49% 8% 7%

In 2019, 13% of Philadelphia’s working 20% 4% Rate Unemployment

age population lacked a high school 4% Labor Force Participation Rate Participation Force Labor diploma. The unemployment rate 0% 0% Less than High High School Diploma Some College or Bachelor's Degree or among these individuals stood at 16%, School Diploma or Equivalent Associate's Degree Higher compared to 12% for those with a high Labor Force Participation Unemployment school diploma, 7% for those with some college or an associate’s degree, and 4% Figure 20: Rates of Unemployment and Labor Force Participation by Educational for those with a bachelor’s degree or Attainment, 2019 higher (Figure 20).

Working Age 13% 31% 24% 32% Population 49% Labor Force 9% 28% 25% 38% Labor Force Participation Rate Among Employed 8% 27% 25% 40% Philadelphians with less than a High School Diploma in 2019 Less than High School Diploma High School Diploma or Equivalent Some College or Associate's Degree Bachelor's Degree or Higher

26 State of the Labor Market | Philadelphia’s Labor Force

Table 8: Most Common Degree and Certificate Completions in the Philadelphia MSA,

Academic Year 2019 Table 8 shows the most common Master's Total Associate Bachelor degrees awarded in the Philadelphia Degree Description Certificates Degrees or Completions Degrees Degrees region during the 2018-2019 academic Higher year. Business Administration 5,480 20 910 1,840 2,720

Note that these figures reflect only Registered Nursing 5,360 130 820 3,810 610 individuals attending post-secondary Liberal Arts and Sciences 3,780 0 3,040 680 50 educational institutions. Individuals Finance 2,600 0 0 2,040 560

completing occupational training Financial Planning and Services 2,480 2,340 0 60 80

through workforce, nonprofit, or Psychology 2,300 0 240 1,880 180 private institutions are not included. Biology/Biological Sciences 1,890 0 40 1,770 90 Marketing/Marketing Management 1,430 10 20 1,180 220 The top two programs, Accounting 1,410 20 10 1,100 280 Business Administration and Social Work 1,240 0 70 360 810 Business/Commerce 1,240 0 450 550 240 Registered Nurses each Computer and Information Sciences 1,210 10 160 740 310

account for approximately Law 1,080 0 0 0 1,080

5.5% of all degrees awarded. Health Services/Allied Health 1,060 0 590 470 10

Cosmetology/Cosmetologist 1,040 1,040 0 0 0

Mechanical Engineering 960 0 10 800 150

Medicine 920 0 0 0 920

Political Science and Government 910 0 10 850 50

Degree categories may not sum due to Medical/Clinical Assistant 890 860 20 0 0 rounding. Management Science 850 0 0 370 480

27 State of the Labor Market | Philadelphia’s Labor Force

Employment in Philadelphia is heavily Figure 21: Inflow-Outflow of Workers and Residents by Density of Employment in Philadelphia, 2018 concentrated around Center City, University City, and along the Broad Street corridor. 346,000 Philadelphia is intrinsically connected to its suburban neighbors. Nearly

half of all primary jobs in the city are held by workers that commute Live and Work in from outside the city limits. Philadelphia Meanwhile, prior to the COVID-19 pandemic, about one-fifth of Philadelphia’s resident workers lacked access to a vehicle. Combined with the city’s concentrated employment centers, access to job opportunities for many residents depends on the city’s public transportation system. 18% Of Resident Workers Have No Access to a Vehicle in 2019 25% Of Resident Workers Relied on 310,000 235,000 Public Transportation in 2019 Commute In Commute Out

Source: Philadelphia Works Analysis of U.S. Census Bureau, ACS 5-Year Estimates and LHED 28

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