To promote greater equity in Philadelphia, addressing the challenges faced by minority-owned businesses in the upcoming 2023 mayoral election is crucial. To gain a comprehensive understanding of the current state of these businesses, we utilized the Small Business Equity Toolkit to compare Philadelphia's performance with 14 peer cities. The toolkit offers data for 105 U.S. cities, including the largest 100 cities and five cities selected based on ongoing partnerships. The toolkit identifies seven groups with fifteen cities by examining Census-designated “Economic Places” and using ten variables to capture key socio-economic factors.

The peer cities cohort for Philadelphia includes Atlanta, Baltimore, Baton Rouge, Birmingham, Buffalo, Cincinnati, Cleveland, Dayton, Detroit, Memphis, Milwaukee, Newark, New Orleans, and St. Petersburg. We evaluated Philadelphia's performance in terms of median income, business per capita, average annual sales, and average wages using this cohort. Table 1 displays the results and main insights, include:

• Among these cities, Philadelphia ranks fifth in median income, surpassed only by Atlanta, St. Petersburg, and Baltimore.
• Philadelphia's ranking in businesses per capita is second to last, coming in at 14th place, with only Detroit ranking lower.
• Philadelphia ranks 10th in average annual sales when compared to the peer cities cohort.
• In terms of average wages, Philadelphia ranks 7th among the peer cities cohort for minority-owned businesses.

The SBET also offers interactive tools, such as graph 1, that provide crucial metrics on minority-owned businesses in Philadelphia. According to the data, only 5.4% of businesses operating within the city limits are black-owned, and 3.2% are Latino-owned. For further information, please visit the toolkit here.

Figure 1: SBET's interactive overview for Philadelphia

These percentages differ from those obtained at the metro level. While less specific, having data at the metro level allows us to disaggregate by sector and make comparisons between employer and non-employer firms. The attached deck on this page displays this data using the 2018-2020 ABS and the 2021 ACS, and the main insights include:

• With 576K businesses Philadelphia is the ninth-largest metro area in the country in terms of the number of businesses.
• Philadelphia ranks 12th among metros with more minority-owned firms. Here one of every four businesses are minority-owned. Out of these, 8% are Asian-owned, 12% are Black-owned, and 5% are Latino-owned.
• There are significant racial, ethnic, and gender disparities in business ownership in Philadelphia when measured on a per-resident basis. Black-owned employer firms have the biggest gaps, with only 2 Black-owned firms per 1,000 Black residents, while there are 22 white-owned firms per 1,000 white residents.
• However, employer firms represent only 20% of all firms in Philadelphia, with Black-owned firms having the highest gap. In Philadelphia, there are four white-owned nonemployer firms for every white-owned employer firm, while there are 23 nonemployer Black-owned businesses for every Black-owned employer firm. This ratio is striking but in line with national numbers, where 95% of all Black businesses are nonemployer firms, representing a significant opportunity to grow Black wealth.
• In terms of sectoral breakdown, the top five non-minority industries in Philadelphia, based on the number of businesses, are high-wage industries. However, for minorities, only one top industry is high-wage.
• Even when comparing the same sectors, wages are higher for nonminority businesses. For professional services, the average annual wage among minority-owned businesses is 20% lower than among nonminority-owned businesses.
• Consistent with national trends, business-to-business-oriented sectors provide the highest wages for minority employer businesses. Among these sectors, professional services stands out as the best-paid industry accessible for Black and Asian-American entrepreneurs.

The data obtained through the Small Business Equity Toolkit and the ABS and ACS reports shed light on the current state of minority-owned businesses in Philadelphia. While the city performs well in terms of median income, it lags behind in businesses per capita and average annual sales compared to its peer cities cohort. The data also reveals significant disparities in business ownership based on race, ethnicity, and gender, with Black-owned firms having the lowest numbers and highest gaps compared to white-owned firms. It is crucial for policymakers to address these challenges and promote greater equity in the upcoming 2023 mayoral election by creating policies that support and uplift minority-owned businesses.