Four Reasons Philadelphia Isn’t Detroit

The Motor City declared bankruptcy on Thursday. But Philadelphia won’t be the next domino to fall. Here’s why.

That didn’t take long. I’d barely just heard the news Thursday afternoon that Detroit had declared bankruptcy — the biggest municipal bankruptcy in American history — when a challenge to me arrived fresh from the Twittersphere:

“Rafalito,” you may gather, is the nom de twit of a rural Pennsylvanian a Philly resident who didn’t much care for my column, earlier this month, proposing that Philadelphia secede from a state that doesn’t realize the benefits we bring to it. Detroit’s bankruptcy, he concluded, provided a trump card in our ongoing debate.

Except it didn’t. Philadelphia isn’t Detroit.

Oh, sure, lots of people look at the cities and think they’re seeing double. Both cities had thriving, union-driven manufacturing bases that crumbled away; both have municipal debt problems, and both have an extraordinary levels of poverty. What’s more, both traditionally suffer from municipal leadership that veers between merely ineffective to devastatingly corrupt. Observers here and around the country have been linking the two cities for years — some, like Daily News columnist Stu Bykofsky, have even eyed Detroit’s ruins with a bit of perverse envy.

“Ideas like that are born of a desperation that has not yet gripped Philadelphia,” Stu wrote in 2011, giving his approval to Detroit’s consideration of urban farms to replace empty neighborhoods. “Maybe it should.” Gotta love it when your metro columnists root for the destruction of the town they write about.

But again: Philadelphia — for all its problems — isn’t Detroit. That’s not to say we won’t someday declare bankruptcy, only that the conditions that pushed Detroit over the edge aren’t even close to present here at the moment. A few quick reasons why:

The bond ratings agencies think we’re managing our finances adequately. That’s probably a surprise, given what we know about the pension problems squeezing Philadelphia’s budget. But it’s true: Standard & Poor’s last month upgraded Philadelphia’s general obligation debt from B+++ (half-decent) to A- (decent) for the first time since 1979.

We were never a one-horse town. Detroit, once it became a car-production town, was pretty much only a car-production town — and when the American auto industry largely cratered over the last decade, Detroit lacked the resiliency to survive.

Philadelphia, meanwhile, had a more diverse base of manufacturing (and, for that matter, still does). We had textiles and the Navy shipyard and even machine-making manufacturers — and while most of that stuff is gone today, it disappeared in stages, meaning Philadelphia has never taken the roundhouse knockout blow Detroit has during the last decade.

And S&P? Part of the reason it upgraded the city’s bonds is because of the diversity of rising economic sectors here, including health care, higher education, and services. We aren’t perfect, but we’re diverse, and that’s made us better able to weather the really bad times.

We’re growing. Thanks to births and an influx of international migration, Philadelphia’s population has grown six years in a row. Detroit, meanwhile, saw its population decline from 1.8 million in 1950 to barely a third of that today. And that makes a difference: When you’re trying to run a city built for three times as many people as it actually holds, finding the money to maintain services can be difficult, if not impossible.

Philadelphia’s population also peaked in 1950, and did decline for most of the decades thereafter. But never at the same rate as Detroit — just (!!) a quarter of the population, not two-thirds — not even close. It makes a huge difference, sustainability-wise.

We’re living in a bigger ecosystem. Detroit is situated within 100 miles of just two other “major” cities — Toledo (which maybe doesn’t count) and Cleveland (which does, jokes aside). Meanwhile Philadelphia counts four major cities in that proximity — Newark, Jersey City, New York, and Baltimore—with Washington D.C. just 123 miles away.

It makes a difference. Go down to 30th Street Station any weekday morning, and you’ll find hundreds of Philadelphians waiting to get on a train to New York. They live here and work there, and yes, that means Philadelphia is something of a bedroom community — we’re cheaper than Manhattan! — but it also means we’re not as isolated from, say, New York’s relative economic success. It’s a cushion, and inter-city rivalries aside, we should embrace it.

We’ve got our problems. The murder rate is unacceptable in Philadelphia, the schools must be fixed, and the pension crisis isn’t going away. But by dint of a number of factors — some of them, admittedly, involving luck — this city isn’t in nearly as dire a situation as Detroit. Don’t let anybody tell you otherwise.

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  • Dan

    All true but Philadelphia has benefitted from a good real estate market and lots of college students. When city workers collect pensions and college gets more expensive we are in a heap of trouble. Even the city admits DROP is underfunded, SEPTA will demand raises and get them by hiking fares and there are only so many taxes you can raise. Take sway the economic impact of the college kids and stop calling them permanent residents then let’s compare we are close to Detroit. Give it 5 10 years tops until a crisis.

    • seandl

      Ohhh..So close Dan till you got to SEPTA, then you went off the rails.

      SEPTA has never raised the fares due to Union labor. Hell the fare increases only happen due to inflation and the lack of funding SEPTA gets to run the system..

  • CREDetroit

    As a detroiter, I agree with you….but don’t count on not being in the same boat pretty soon….that pension problem will eat you alive….and that problem has a higher growth rate tun your revenues. Its only a matter of time.