Workers in the Philadelphia metropolitan area are facing an affordability crisis. Prices are generally higher than the national average, but hourly pay hasn't kept up. Many workers are turning to flexible work as a way to make ends meet, as well as to learn new skills and try out new roles.
Key takeaways
- Hourly pay for flexible workers in the Philadelphia area is almost $10 higher than the state minimum wage.
- Unemployment is higher in the Philadelphia metropolitan area than in the nation as a whole, and employment in leisure and hospitality has yet to recover to its pre-pandemic level.
- Job openings have decreased markedly in retail trade and arts, entertainment, and recreation, but flexible work is very much in demand in these areas.
- Shorter commutes and public transportation have helped to insulate workers in the area for high gas prices.
The Philadelphia metropolitan area includes parts of New Jersey, Delaware, Maryland, and of course Pennsylvania – where workers have faced the same $7.25 minimum wage for 13 years. That minimum is far from the going rate for hourly work, however. Flexible workers on the Instawork platform are receiving much higher wages, averaging $17.03 in July and still expected to rise:
Of the four states, New Jersey has the highest minimum wage at $13, still much lower than the living wage calculated by MIT and Instawork hourly pay.
For a realtime pulse of the Philadelphia metropolitan area, including pay rates, demographics, and demand for flexible work, please visit our local labor market page.
Labor Market Focus
In this Labor Market Focus, we take a broader view of the labor market's development in the past and where it may be going next.
Philadelphia has been hit hard by the Covid-19 pandemic, but unemployment in the area had already been higher than the national average for several years:
Until the pandemic, the leisure and hospitality sector had been growing as a share of total non-farm employment in the Philadelphia area. It is yet to fully recover. Meanwhile, the trade and transportation sector, another one where Instawork is very active, experienced a small amount of growth in employment during the pandemic:
The changes in these sectors reflect shifting demand from consumers for good delivered to the home versus services offered outside the home. Breaking the sectors down into their component industries, we can see more recent data showing how job openings have evolved nationally in sectors important to the Philadelphia area over the past year:
IndustryJob openings in June 2021 (thousands)Job openings in June 2022 (thousands)Percent change YoYWholesale trade273289+5.8%Retail trade1,080842-22%Transportation, warehousing, and utilities502520+3.6%Arts, entertainment, and recreation206147-29%Accommodation and food services1,2671,304+2.9%
Source: Bureau of Labor Statistics
Retail trade and arts, entertainment, and recreation have the slackest labor markets right now, while there are more slightly more positions open in the other industries. Yet businesses are still hiring flexible workers in these areas, suggesting that they are taking a wait-and-see approach to demand for their goods and services. Shifts for entry-level warehouse associates in retail and event servers at venues are among the most in-demand on our platform in the Philadelphia area.
Also on the plus side, workers in the Philadelphia area have access to a fairly comprehensive mass transit system, and large employers are located fairly close to dense population centers. Commutes for flexible workers on our platform have been among the shortest in the nation. As a result, high gas prices haven't been as much as a burden as in other regions.
The potential effects of an economic downturn
Looking forward, an economic downturn could make it harder for Philadelphia's workers to close the gap between prices and their pay. Businesses will face less pressure to raise pay, while inflation may stick around for a while longer. Moreover, the long-term trend of higher unemployment in the area may not be going away anytime soon.
We expect the demand for flexible work to stay strong, however, as businesses fine-tune their staffing to mirror the economic cycle. Long-term trends also suggest steady growth in the major industries we serve. Transportation and warehousing grew by about 2.5% per year (adjusted for inflation) in Philadelphia between 2002 and 2019, while leisure and hospitality grew by 1.5%. We expect to offer more and more Philadelphians and their neighbors a way to earn the extra income they need during what may be an increasingly difficult time.
These links offer more information:
Instawork local labor market resources
Bureau of Labor Statistics Economic Summary
Philadelphia Works Quarterly Labor Market Report
For a realtime pulse of the Philadelphia metropolitan area, including pay rates, demographics, and demand for flexible work, please visit our local labor market page.
Realtime metrics
These metrics, derived from data aggregated across the Instawork platform, compare the two weeks starting 7/28/2022 to the previous two weeks. To control for the overall growth of the Instawork marketplace, only shifts involving businesses that booked shifts in both periods are included:
- $0.00 change in hourly pay
- 1.4% point drop in share of short-notice shifts
- 0.5 hours rise in hours per existing worker
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