At the close of World War II both the United States and the Philadelphia region were known for their manufacturing prowess. Yet both already had seen manufacturing's share of employment begin to decline. Although in 1950 manufacturing held a larger job share in the Philadelphia region than in the nation as a whole, improvements in communication and transportation, technological shifts, differences in labor costs, and other factors allowed production to relocate elsewhere and soon caused the economic paths of the region and the nation to diverge. By the late 1980s, manufacturing in both the city and suburbs of the Philadelphia region fell below its role in the nation.1 Since that time, the gap between the region's and the nation's industrial profiles has continued to widen. The changes in Philadelphia resemble those experienced by other older metropolitan regions as manufacturing there faced similar challenges and managers continued to seek new markets and lower-cost sites in the United States and abroad.
This chapter explores some of the implications of these changes for the metropolitan economy and their consequences for regional workers'earnings and economic prospects. It begins with a brief overview of the structure of the regional economy, showing that greater Philadelphia duplicates many national trends: the decline of manufacturing and the rise of economic activities based upon education, health care, biomedicine and tourism. Then we look at the geographic patterns created by these economic shifts, especially the growing spatial diffusion of the metropolitan economy, as decentralized and often private decision making has trumped coordinated governmental efforts to shape