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Are Philadelphians Really as Bad Off as They Think They Are?

March 27, 2008 By:
Ben G. Frank, JE Feature
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With gas prices at the pump out of sight, with a housing slump and a rising number of foreclosures, with economic growth slowed, unemployment heading upwards, and the "R" word on the lips of many -- well, some worry may be warranted.

But Philadelphians go overboard in pessimism, it appears. They seem to echo poet Robert Lowell, who once said, "If we see light at the end of the tunnel, it's the light of the oncoming train."

Or as defined by Miriam-Webster's online dictionary, pessimism: "an inclination to emphasize adverse aspects, conditions, and possibilities or to expect the worst possible outcome."

Pessimism seems to reign in Philly. The city and area have the distinction of being No. 2 in the nation on the list of most pessimistic cities. San Francisco is numero uno.

Those were survey findings from the Federal Reserve and Hudson Highland Group, Inc.

But from an economic standpoint, compared to other areas in the United States, per capita, the Philadelphia region has been steady and "has not been declining," according to Timothy Schiller, senior economic analyst at the Federal Reserve Bank of Philadelphia.

"No economic reason to be so high in a pessimistic attitude. Must be the sports teams," he declared.

Sport enthusiasts can look at the quick fade of the Phillies in the playoffs last fall, and the poor showing of the Eagles and be downhearted. Yet, the 76ers and the Flyers look like they'll go on, at least to the playoffs.

Same with economics. The region is the fifth largest metro area in the country with a per capita income 17 percent above the national average and is way up there in education, health and social services. Moreover, the economy here is "diverse and less volatile than other parts of the nation," stresses Schiller.

Economically, Philly-metro is typical of New England metropolitan regions, though here, it is the growing demand for education and health services that prevents a cyclical decline, according to Schiller. The "eds and the meds," as they are so fondly called in Philadelphia, help stabilize the economy.

The city is not into high-tech nor is it a large financial sector like New York. Less important here, too, is what is called manufacturing and hospitality, though, Schiller notes, it's "nice" to see that hotel construction is up and tourism improved.

Why the Doom and Gloom?
So why the pessimism when economic wisdom tells us that even disruptive events like the Great Depression would not cause more than a temporary deviation from the long-term "trend-line" of world economic growth -- and we are nowhere near a depression.

Phil Hopkins, vice president of research at Select Philadelphia, whose mission it is to market Greater Philadelphia to the rest of the world in order to attract investment and companies to the area, agrees that Philadelphians are "unduly pessimistic." Various aspects of the economy here are "solid and steady" and "the growth-rate is pretty decent," he argues.

Hopkins points out that one of the real competitive advantages of the area is that the workforce, while it may be down in attitude, is above the national average when it comes to persons having a bachelor's or advanced degree: Thirty-two percent of people in the workforce here have a bachelor's compared to 27 percent in the nation.

The city, he continued, sits in the middle of an enormous market, with 26.4 million people working within 200 miles of the downtown area.

Even in the area of employment, things are not that bad compared to other parts of the nation. Unemployment in the Greater Philadelphia area, according to the Bureau of Labor Statistics in December, was 4.06 percent compared to 4.8 for the country. "The unemployment rate in the region has been consistently below the U.S. figure in recent years," stresses Hopkins.

Moreover, Karen Reivich, research associate in the department of psychology at the University of Pennsylvania, points out that pessimists are at greater risk health-wise, especially in the areas of mental-health and cardiovascular functions.

The author of the book Resilience Factor (www. wishfulthinking.com) notes that an optimist in difficult economic times will concentrate on what he or she can do -- "how to improve the situation for myself."

"I've got a great job; I've got to continue to do it well and enjoy it." A pessimist, explains Reivich, generally believes that he or she has no control over anything.

Pessimistic? Not the people at Select Philadelphia. Actually, Hopkins believes if there is a melancholy view of life regarding the city's economic and business future, it must stem from "echoes of the past."

So, how will Philadelphians who are pessimistic discern the return of a growing economy when it happens, as it must eventually?

If you're an optimist, you'll see the light at the end of the tunnel, not the train.


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