Some Phoenix-Area Workers Surprised To Learn They Have 'High-Wage' Jobs
Since the Great Recession, many state and local governments have made business friendly policies and job creation top priorities. When politicians announce companies expanding or moving to the Valley, they often tout new "high-wage jobs." We begin our four-part series on jobs by trying to define what "high wage" means.
CAST YOUR VOTE: What do you consider a high-wage job?
Meet Jennifer Fernandez
Jennifer Fernandez works for a large credit card company in Phoenix.
“I do quality assurance so I just listen to phone calls all day,” she said.
In her mind, a high wage job should pay a certain annual salary.
“$70,000 to $90,000 and above,” she said.
Fernandez was surprised to learn some people regard her job as “high-wage.” She makes $45,000 a year.
“I don’t consider myself high wage,” she laughed.
Fernandez may not feel like a high-wage earner but she makes significantly more than the median income in Maricopa County. Median means the midpoint — half the people make more, half make less.RELATED: To hear an interview with KJZZ's Christina Estes on The Show, click here.
So, What's High-Wage?
The most current Census Bureau data used by the Arizona Department of Administration shows the 2015 median income for a person in metro Phoenix was $31,650. Fernandez makes about $13,000 more, but here’s where it gets confusing. The same state agency uses another source for the average individual wage. That was slightly more than $50,000 and that puts Fernandez below average. So, which figure is more accurate?
“In that sense, the median would probably be better. It’s more representative of what the typical person is making,” said Arizona State University Professor Tom Rex.
He’s been studying wage data for decades and says averages are almost always higher than medians. They’re also more widely available through numerous sources that rely on different data sets which provide various levels of accuracy.
“When it becomes really unfortunate is when somebody compares the average of this survey to the average of that survey,” he said. “That’s apples and oranges. You can’t do that folks.”
In the business world, they use different numbers, too. Chris Camacho is president and CEO of the Greater Phoenix Economic Council (GPEC).
“A high wage job in our market would be a wage that pays on average 125 percent of the county median which would be in the low to mid-40s,” he said.
Phoenix’s Economic Development Director Chris Mackay offered this definition: “Anything over $50,000 a year is considered kind of in our high wage strategy. But really kind of $70,000 and over is in our kind of in our target industry for high wages.”
What About Our Cost Of Living?
Maybe you’ve heard our cost of living is lower. It’s certainly cheaper than most of California, but what about the rest of the country?
Eric Figueroa works for the Bureau of Economic Analysis. His team crunches numbers across 16 categories to come up with regional price parities. It’s what you and I would consider the cost of living. The national average is 100.
“The regional price parities range from 118.8 in Hawaii as the highest price level in the country and then the state with the lowest is Mississippi at 86.2,” Figueroa said.
Arizona comes in at 96.2 and metro Phoenix at 97.2
“Phoenix’s price level is about three percent less than the national average,” said Figueroa.
How Does Our Income Growth Compare?
That’s based on the most recent data from 2015. His agency also examines incomes. It found metro Phoenix exceeded the national average for real personal income growth. What’s that mean?
“It’s the income across all of the people summed up into a single number,” said Figueroa.
So, the total income for metro Phoenix grew faster than the national average. Sounds good to most people, but here’s where it gets confusing again. Our per capita income grew slower. Per capita means per person.
“It really has to do with the extremely strong population growth in Phoenix,” Figueroa said. “So, even though the income in Phoenix is growing strongly relative to the U.S., with so many more people, when you make that division by the population, that adjustment to per capita, you end up with a slower rate of growth.
Maybe you’ve heard companies reporting record profits and Wall Street hitting new highs and wondered if big business is to blame for stagnant wages. Not necessarily, says Arizona State University Professor Bart Hobijn.
During the recession he said lower wage workers disproportionately lost their jobs.
“So it looks like the average wage goes up because we’re cutting out the people with the lower wages," Hobijn said.
And, now that lower wage jobs have returned, he said, “Part of what’s now reducing wage growth is that some of these people, which is good news, are finding jobs, getting jobs.”
Finding a new job is on Jennifer Fernandez’s to do list. She’s going back to school.
“Hopefully get into HR,” she said. “Human resources is always going to be needed because someone’s gotta hire somebody to work.”
The next time she’s hired, Fernandez hopes the job meets her definition of high-wage.
We set out to define a high-wage job and while we could not get a single definition that economists, economic development groups and workers agree on, we did learn some things that are important to keep in mind as you hear people talk about wages.
- Median incomes represent the midpoint and averages are almost always higher.
- Going back 10 years, the median individual income in Maricopa County has increased less than $3,000 while the average jumped $10,000.
“The difference between average wage growth and median wage growth is actually a reflection of inequality,” said ASU Professor Bart Hobihn. ”So if average wage growth is faster than median wage growth we have income inequality.”
Our series continues with a look at who’s collecting bigger paychecks today and who will see them in the future.