Arizona continues efforts to lure high-paying jobs

May 25, 2012

Arizona lost more than 300,000 jobs during the recession, and estimates suggest the state has gained only about a quarter of them back. KJZZ’s Mark Brodie and Devin Browne look at what kinds of jobs are filling the gap.

MARK BRODIE: From last April to this one, the state added 46,000 jobs.

DEVIN BROWNE: Which probably sounds like a lot -- and it is. But since the state lost so many jobs during the recession, 46,000 is still something like a really solid start. Federal numbers show we’re still closer to the bottom of 2010, than we are to the crest of 2007.

BRODIE: The industries leading the slow but steady recovery are health care, construction, and leisure and hospitality.

BROWNE: And, many of the new jobs pay less than $40,000 a year. And, a lot of them are temporary.

BRODIE: The average salary in Arizona is slightly more than $43,000 a year. Three of the fastest growing industries in the state - those around five percent growth or more - pay less than that. Some less than half. Jobs that pay more, like manufacturing and financial services? Their growth is hovering around one percent.

BROWNE: One person these trends don’t bother? 24-year-old Graham Doyle, a college student studying hospitality and working full time at a Scottsdale sushi restaurant.

GRAHAM DOYLE: You know the hospitality industry out here just always seems to be booming, they’re always building new bars, new hotels, stuff like that, new casinos, so hopefully that’ll be an option for me always.

BRODIE: Most economists share at least a little of Doyle’s affinity for the state’s job growth in the hospitality industry -- you know, any job is better than no job.

BROWNE: But there are a few reasons economists aren’t over-the-top excited about job growth in this sector. One, low-paying jobs means that these workers have less money to spend. And, two, a workforce that’s mainly filled with low-paying and low-skilled jobs means it’s often less attractive to other industries and businesses. This is not just an Arizona issue. Here’s Stephen Brown, an economist at the University of Nevada, Las Vegas.

STEPHEN BROWN: We’ve had that problem in Las Vegas quite a bit, where basically other industries kind of say, ‘well, you don’t have that educated a workforce’ and they bypass us when they’re thinking of where they want to locate. So there is a possibility that being dependent on tourism kind of crowds out other industries.

BRODIE: Brown says tourism is a big deal in Arizona, but that the state doesn’t rely on it as much as a place like Las Vegas.  And, economists also point out lawyers, accountants and health care workers have also been getting hired in large numbers in Arizona recently.

BROWNE: Still, the hospitality industry is one of the leading job creators right now, and so it’s something economists and politicians are paying attention to. And, that sort of brings us to the big questions: are these the kinds of jobs that will help the economy get healthier? And, if not, what kinds of jobs will, and how do we get them?

BRODIE: Some of Arizona’s elected leaders think the answer is bringing in out of state companies. They see it as a sort of economic aspirin. Governor Brewer is leading a trade delegation to Germany and France, and last month, Phoenix Mayor Greg Stanton did the same to Silicon Valley. The goal of these trips? Convince companies to move or expand here, and create jobs along the way.

BROWNE: This is something Tony Lydon knows all about. He works at firm that, among other things, helps companies find space to operate. Lydon says the state’s main selling points are that it’s near major population centers, there aren’t many natural disasters here, and we still have some infrastructure left over from the time Phoenix was heavily involved with the defense industry.

TONY LYDON: We have a very strong history there, with lots of experience and people that are really talented in those areas. So, those types of sectors, aerospace, military and the like, and a lot of that translates into other types of manufacturing.

BROWNE: But some economists say courting these companies to move here is often easier said than done. That’s in part because there’s more competition for these high paying, high skill jobs now than there used to be.

BRODIE: And, states and cities are also more aggressive with incentives like tax breaks than they used to be. Here’s economist Jim Rounds.

JIM ROUNDS: Yes, it’s not the best situation, but there really aren’t that many communities that are only adding $80,000 a year jobs.

BRODIE: Economists say that makes things even more competitive, and often pits Arizona against cities in Texas, like Austin, as well as those in Southern California and elsewhere in the region for businesses - and their jobs.

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