Successes and Failures of Local Liberalism: Philadelphia as a Case Study

Guian A. McKee. The Problems of Jobs: Liberalism, Race and Deindustrialization in Philadelphia. Chicago: The University of Chicago Press, 2008.

This book describes how the movement fir economic equality and for creating more jobs grew as local movements during the post-New Deal period, even as they faltered as national movements. This book examines what happened locally in Philadelphia. There, political decision makers and neighborhood activists fought for job training, job retention, inner city economic development, and affirmative action programs. Racist existed as a problem.

The first plant the Philadelphia Industrial Corporation (PIDC) helped retain was the Stephen E. Witman and Son chocolate factory. It was planning to move to New Jersey until PIDC offered to assist in their staying in Philadelphia in a larger plant. PICK directed development towards an abandoned part of North Philadelphia that became an industrial park. The economic development politics of the New Deal and post-World War II liberalism on the national level were followed by the liberal economic development decisions at the local level. Smaller but separate policies were created and applied to both African Americans and Caucasians.

New Deal liberalism called for increasing public policy intervention in corporate behavior. The subsequent rise of local liberalism was pragmatic, sought empirical data in search of policy truths, supported policy experimentation that produced usable policy information, and was anti-communist. The anti-communist aspect of the movement was less prevalent in Philadelphia than it was nationally.

Philadelphia liberals, especially African Americans leaders, created policies that incorporated self-responsibility, state government programs, plus mainstream values blended with civil rights advocacy. Liberalism became a theory of local activism that guided local government in Philadelphia and other urban areas.

Racism was persistent in employment. African Americans were kept out of closed union shops. Apprentice programs drove African Americans towards lower paid and riskier jobs. African American females were funneled towards lower paid domestic service jobs.

Jobs increasingly shifted towards suburban employers, where it was more expensive than within the city to live. Mostly Caucasians could better afford to move to where these jobs were.

In 1951, a collation of reform liberal activists, unionists, African Americans, Democratic Party workers, and business groups obtained political power in Philadelphia. This was similar in composition to the New Deal coalition. Prior, Republicans had dominated most Philadelphia government administrations since the 1860s.

The national programs that fought poverty operated on the belief that jobs can be trained for and provided to poor people in a growing economy such that few changers were sought in the economic structure. These structural problems were fought at the local level. Local planning efforts plus drives to get more African Americans hired in construction jobs sought to create economic structural changes in Philadelphia.

The rising strength of the Democratic Party along with scandals among Republican officials led some Philadelphia business leadership, who were mostly Republican, to form the Greater Philadelphia Movement that sought to reform city government and encourage center city business development. They joined with local groups such as the Americans for Democratic Action and a reform group Citizens’ Council on City Planning, to elect reform liberal Democrats and successfully campaign to provide Philadelphia with a Home Rule Charter with a new system of government. This new form of governance consists of a strong Mayor, more civil service jobs, and increased responsibilities of the City Planning Commission.

Reform movements as in Philadelphia were successful in New York, Boston, St. Louis, and Cleveland.

The anti-communist hysteria that hit other localities was less an issue in Philadelphia. When a group of Philadelphians were arrested as communists, top Philadelphia law firms provided their legal defense.

The loss of manufacturing jobs hurt Philadelphia. An annual decline, with a one year exception, in manufacturing jobs saw a loss of 101,400 jobs from 1954 to 1964. This also reduced Philadelphia’s tax base which limited the ability to create liberal social policies.

In 1960 Philadelphia, racial minorities composed 22.4% of the labor force, 54.8% of the unskilled labor jobs, 78.-% of male domestic servant jobs, 14.4% of foremen and craftsmen jobs, 14.3% of sales and clerical jobs, 8.7% of male professional/technical jobs, and 6.2% of managerial/proprietor jobs.

In 1964, 9%, or 4,242, of Philadelphia businesses were owned by African Americans, of which 13 were manufacturing businesses and 14 were wholesalers.

Philadelphia shifted to a service economy. Economic forecasts warned that the continuing loss of manufacturing jobs would be continue over the long term. Commerce Director Walter Phillips proposed that the job flow to the suburbs could be reduced by turning vacant land into small factories. Land banking used proceeds from the sale of land for purchasing more land to be sold for industrial use. Philips met with opposition to his idea for a stronger industrial policy from real estate leaders, such as the politically powerful Democratic National Committeeman Albert Greenfield as well as questions regarding its legality from City Planning Commission Executive Director Edmund Bacon. This industrial policy was not adopted during the Administration of Maybe Joseph Clark. Yet the next Mayor Richardson Dilworth made industrial programs one of his priorities. A $78 million Eastwick project of industry with housing, commercial spaces, and community facilities designed to racially integrate 60,000 and create 20,000 jobs was the nations’ largest new renewal project at the time. The project though displaced 8,636 and took decades to reach its initial goals. Much social conflict arose.

Development Coordinator William Rafsky led programs that cleared blighted areas and built scattered clusters of new housing. Code enforcement was increased to prevent further deteriorations. Delinquent blight properties were seized and turned into playgrounds and parking lots.

Mayor Dilworth made Albert Greenfield the Chairman of the City Planning Commission. He and the Commission were then the champions of industrial policies the Commission had previously resisted. The business community was supportive, which was important to its operations.

Many new companies employing much smaller numbers of employers sprang into existence.

The city began offering low cost financing to its industrial base. It was discovered that much of Philadelphia’s base was small or medium sized family owned specialty producers who had good credit ratings, were profitable, but lacked the capital to modernize and remain competitive. Since state law did not allow PIDC to make loans, PICK connected lender to industrial borrowers. PIDC assumed the loan, making them tax free which permitted lower interest rates and smaller equity requirements for industrial borrowers.

PIDC loans went to numerous types of industries. It did not move to help to help the apparel or textile industries, and they went into sudden and massive declines. PIDC may have not helped on purpose as they may have determined these businesses could not be rescued.

Philadelphia lost almost 5,700 manufacturing and wholesaling jobs between 1963 and 1992. Efforts to stop the loss of jobs may have found some short term successes but the long term results were negative. On the positive side, an industrial base remained with 124 industrial firms employing 23, 035 in Philadelphia in 1999.

Many other cities pursued urban renewal over industrial financing, as Philadlephia chose. Most of the other cities concluded that their urban renewal efforts failed to achieve the desired goals. Boston came closest to Philadelphia’s model as Boston offered low interest financing through tax exempt revenue bonds.

James Tate, City Council President, became Mayor upon the resignation of Richard Dilworth to run unsuccessfully for Governor. Tate defeated Walter Phillips in the 1963 Democratic Primary and was elected to two terms as Mayor. Tate defeated Arlen Specter in 1967. Specter was supported by the Greater Philadelphia Movement. Tate was strongly supported by labor unions and African American voters. Tate favored Great Society programs, increased pay to city workers, increased taxes, and kept PICK as a major component of economic development policies.

The Philadelphia labor movement was less radicalized and had fewer strikes in the 1960s compared to New York, Chicago, and Detroit. Labor was a part of PIDC with labor leaders serving on the PIDC Board of Directors. PIDC was creating and saving jobs, even as it helped increase automation.

The PIDC tried to avoid racial issues and allowed separate efforts for Caucasians and African American communities. African Americans felt they were served less than were others. Merging the efforts happened in the 1970s, yet many opportunities to have been more effective had passed.

Mayor Tate’s merging job training, economic development, social services, and urban renewal goals and efforts reflected the goals and plans of the New Deal’s National Resources Planning Board.

Unemployment fell disproportionately on African Americans. Around 1964, African Americans composed 26% of the labor force but 43% of the jobless.

Philadelphia aimed more economic development efforts towards social welfare programs that turned the unemployed into tax-paying employees. This differed from other cities that put more of their economic development efforts towards improving downtown businesses.

There were four days of rioting in Philadelphia predominantly by African Americans during August, 1964. These riots were smaller than some riots in other cities. Mayor Tate took control of the city’s poverty programs. Tate in part wanted to keep power from his political opposition. Tate’s naming of Samuel Dash as the Executive Director of the Human Service Committee under the Welfare Committee evoked the ire of NAACP President Cecil B. Moore. Tate’s Mayor’s Program for the Elimination of Poverty lacked neighborhood actions and community involvement. It was denounced by Moore and the Americans for Democratic Action. Tate’s initial program fell apart.

Tate created the Philadelphia Anti-Poverty Action Committee (PAAC). He political ally Samuel Evans was named Chairman and Evan’s ally Charles Bowser was named Executive Director. Cecil Moore remained critical. Tate has a strong allegiance with the publicly elected but unpaid PPAC Community Action Council members. 118 of the 144 Council members, and 78 of their relatives, received jobs with either PAAC or city government.

Under Evans and Bowser, decisions were made without public hearings and few new programs were created. The Americans for Democratic Action and Republican City Committee held their own hearings. Community Action Council members were prohibited from being involved with these hearings. Evans argued the path to economic gains for African Americans was to follow the path that other ethnic groups had taken to become of the political power structure.

PAAC founded Head Start and the Opportunities Industrialization Centers job training programs that had successful results. Other successful programs included the Community Legal Services which provided legal services to poor people and Medicare Alert which went door to door explaining new Medicare benefits and how to apply for them.

Business loans to people under set incomes were created as Economic Opportunity Loans. The maximum such loan could be was $25,000. By comparison, the maximum Small Business Administration loan then was $350,000.

PAAC failed to coordinate anti-poverty programs with economic development programs. The PAAC functioned primarily as a patronage organization of supporters of Mayor Tate.

The Opportunities Industrialization Centers (OIC), organized by Rev. Leon H. Sullivan, grew by 1962 intro 100 centers in six countries that provided job training to over 100,000.

Rev. Sullivan also led ministers and others in organizing a boycott of companies that discriminated in hiring and promotions. As a result, 300 businesses agreed to change their practices. OIC delved into the social problems that was causing economic problems to racial minorities, which is something PIDC failed to do.

The OIC resulted from a combination of Federal liberalism and mainstream self-reliance traditionalism. It began with a $50,000 Federal grant, followed by other Federal grants. $458,000 was granted for a pre-training feeder program, then $2,988,152 was granted for day care and nursery programs, and eventually over $14 million over a six year period was sent from the Federal government to OIC. The Ford Foundation assisted. OIC offered numerous employment courses. At first, ti trained 300 students and developed a waiting list of 6,000. Pre-training was developed to assist those who couldn’t get into the courses. Pre-training included how to look for a job, grooming, hygiene, how to complete job applications, etc. 57% of the early trainees were women.

OIC discovered it was not reaching those who most needed their services. Recruiters went into housing projects, bars, barbershops, beauty parlors, pool halls, etc. to inform people about their job training programs. Local radio stations provided announcements. OIC information was sent out with welfare checks. In 1966, 81% of OIC students did not have a high school diploma.

OIC attracted industry specialists as teachers. Textbooks and equipment were often lacking. OIC claimed to have a good record placing those completing its courses into jobs related to their newly learned skills. Its 579 graduates from Feb. 15-Oct. 31, 1965 resulted, by Jan. 1966, with 507 in jobs related to their courses, 52 in jobs in other areas, and 20 unemployed.

The Nixon Administration created the Comprehensive Employment and Training Act (CETA) in 1973. CETA required job training programs to be connected to a local manpower council. This forced OIC to be accountable to another agency. The feeder program was eliminated as “unnecessary”. CETA was disallowed OIC practice of payment cash allowances to participants. CETA funds were also used for patronage jobs on behalf of Mayor Frank Rizzo.

The OIC fell into financial troubles. It owed $520,000 to its employee pension fund and owed $420,000 in unpaid local property and school taxes. This led to a staff reduction from 400 to 233 from 1987 to 1980. Due to a weak economy, OIC placed 321 of 900 graduates into jobs.

The Reagan Administration eliminated CETA. Over half of OIC local offices folded.

The Philadelphia Urban Coalition was created as a collation between minority groups and white liberals. It supported a proposal to provide $2.8 billion in emergency jobs offered by then Senator Joseph Clark that President Johnson opposed. Charles Bowser was hired as Executive Director. The Urban Coalition was more aggressive in fighting racial discrimination cases than had the PIDC.

There has been resentment from some employers and unions that minorities were required to be hired to achieve minority representation. Often the added minorities lacked some qualifications for work. Bowser worked with the Building Trades, who had been openly resistant to minority hiring practices, to train more minorities to have union journeymen skills.

In 1969, an Assistant U.S. Labor Secretary observed that some contracted in Philadelphia demonstrated they complied with minority hiring requirements by moving the same African Americans by motorcycle from site to site ahead of Federal inspectors.

The Urban Coalition fought for low public transit fares to industrial parks and suburbs, where jobs were increasing in number. This campaign failed. The Coalition complained that mass transit spending emphasized the needs of wealthier suburban riders.

Within the Nixon Administration, there was a concern for civil rights from Labor Department leaders, especially Assistant Secretary Arthur Fletcher and Secretary George Schultz. It was also the desire to Domestic Policy Advisor John Ehrlichman to turn two political enemies, labor unions and civil rights groups, against each other. This led to requiring contractors to make good faith efforts to reach minority hiring goals. Liberal groups, such as the New Democratic Coalition, joined several civil rights groups and African American jobs advocacy groups in support of these efforts. Ben Stahl, AFL-CIO Human Resources Development Institute Director, argued that efforts should focus on fighting decreases in Federal construction as only increasing the number of jobs could lead to hiring more minority employees. Philadelphia contractors failed to meet the goals set for them. Ben Stahl concluded that “I would still have to say that no new minority worker has been put to work as a result” of the plan required in Philadelphia.

The Philadelphia Plan on increasing minority employment in the building trades made gradual changes. By September, 1973, 33.8% (929 of 2,752) workers in six trades were of racial minorities.

The Model Cities housing plan reached out to include participatory planning. 12 community activists were put on a Task Force. Community groups did not trust the plans. Implementing the goals of improved housing proved troublesome. Model Cities became a political organization controlled by Mayor Tate and then Mayor Rizzo.

The abuse of favoritism in contracts and hiring led HUD to threaten to half funding Model Cities.

Racial tensions increased followed a demonstration of 3,500 mostly African American students in support of schools teaching African American history and culture. Police Commissioner Frank Rizzo is said to have told police to use force. Police ran into the crowds, hitting protestors, and violence erupted. 15 protestors were hospitalized and about as many required medical attention. 27 pedestrians were injured by fleeing demonstrators. 12 police officers were hurt.

Work is a traditional value embraced by conservatives. Liberals have been less successful demonstrating their commitment to work. Job creation efforts should be evaluated for their impact on social issues. Economic development needs to help neighborhoods as well as businesses A local industrial policy will require Federal help. Philadelphia local liberalism made some economic strides but failed on housing, employment, education, and region-wide integration.