“It’s not a short-term thing. This ripple effect of the economic and health crisis that we’re in right now will last for some time.”

In a special on inequality in America, former Philadelphia Mayor and Wharton alumnus Michael Nutter joined Wharton Business Daily host Dan Loney to reflect on his eight years in office and the challenges local governments across the U.S. may soon face. Nutter provided perspective on how national anti-racism protests and the COVID-19 pandemic have impacted residents in Philadelphia, particularly in communities of color.

Interview Highlights

Systemic racism and the disproportionate effects of COVID-19 brought us to a boiling point.

“Today, all across the country, the corporate community, philanthropic community, nonprofit community, cities, and police departments are making some of the most astounding and outstanding statements of solidarity with George Floyd’s family and what happened in that instance. People’s stomachs have been turned. They’re sickened by what they’ve seen. Now the question is, what actions will be taken?”

“All of this is happening in the midst of [the pandemic]. We’ve been, at least in Pennsylvania, Philadelphia, and other parts of the country, literally locked in our houses. Suddenly out of nowhere, 40 million plus people have filed for unemployment. I can assure you in parts of West Philadelphia, South Philadelphia, North Philadelphia, and other parts of the city, that number is double if not triple, especially for Black people, Latino people, [and] people of color. We’re at an inflection point.”

COVID-19 has exacerbated Philadelphia’s deep struggle with poverty.

“I’ve always known that, unfortunately, Philadelphia has the highest poverty rate of the 10 largest cities in the [U.S.] and we have consistently had that high rate for a long period of time. It’s been more than 20 percent for 40 years. Our poverty in Philadelphia is deep. It is entrenched. It is intergenerational and long-lasting.”

“Into my second term, we developed what we call now Shared Prosperity Philadelphia, which was our plan to reduce poverty. I think one of our failings or deficiencies was not working on this issue earlier in my tenure consolidating the various agencies, getting a better grasp on where money was coming from and what it was for, and making a better use of those dollars.”

The federal government’s failure to provide support for local governments put livelihoods at risk.

“The federal government took pause. They [implemented] the Paycheck Protection Program, [the CARES Act], they did a couple of other things and then suddenly said, ‘Oh, we need to wait to see the impact of all the things that they’ve done.’ What did you think the impact was going to be? It’s devastating. That’s a failure on the federal government’s part, there’s no question about it.” 

“When you [are] unemployed, it doesn’t matter what your political party is. When you need to pay your mortgage, your rent,  your car note, or help pay for your kid’s education, this is not a Democrat or Republican thing. Americans are hurting. It is an abdication of responsibility by the Congress and the President to not provide immediate support for city and state governments on the ground.”

The pandemic will have lasting effects on Philadelphia.

“I’m sure [Philadelphia] and all the other cities spent money during fiscal year 2020 that was not budgeted for a pandemic, so they’ve already spent money that they didn’t have. People stopped paying taxes [or] couldn’t pay because their businesses have been closed for all of or most of the first quarter of the year and almost all of the second quarter of the year. That affects the City’s operations as well as the School District because 55 percent of the real estate tax goes to public education, [and schools] were also closed.”

“Then you have people out of work filing unemployment. Maybe they get it, maybe they don’t. As a government, you’re going to continue to spend. The City has had to put out a second budget, which is going through the process now, and this will have a ripple effect into the next fiscal year and possibly beyond. […] It’s not a short-term thing. This ripple effect of the economic and health crisis that we’re in right now will last for some time, and the remnants of it will last for a significant amount of time.”

Gloria Yuen

Posted: June 26, 2020

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