AZ job losses continue, but average weekly wage rises - East Valley Tribune: Arizona

AZ job losses continue, but average weekly wage rises

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Posted: Thursday, July 8, 2010 3:03 pm | Updated: 12:56 am, Fri Jul 9, 2010.

A new federal report suggests Arizonans - at least those who still have jobs - are making more money.

But there may be less there than meets the eye.

The Bureau of Labor Statistics says the number of Arizonans working at the end of last year was 154,100 fewer than the same time a year earlier. That 6 percent decline is not surprising, as other data from the Department of Commerce shows current employment down about 300,000 from its peak in December 2007.

But BLS found that the average weekly wage of those still working actually increased by 3.3 percent in the same period, to $876. And while what Arizonans are paid, on average, still trails the national average of $942 per week, the year-over-year increase at the national level was just 2.5 percent.

The situation was slightly better in the state's two urban areas.

Maricopa County posted a 3.4 percent annual increase in weekly wages, up to $923 per week.

There also was a 3.4 percent boost in wages in Pima County. But wages there still lag far behind both Maricopa County and the statewide average, at just $829 per week.

Economist Dan Anderson said, though, it would be wrong to assume that companies are giving raises to the people who are left.

Anderson, who works for the Arizona Board of Regents, said it's just one of those statistical things: When unemployment rises, so do average wages.

And he said the reverse will be true.

The key, Anderson explained, is who employers lay off when times are hard.

"They usually don't let go their most senior people," he said.

"They let go of the people who have the least amount of time with the employer,'' Anderson continued. "And the nature of the job is those are usually your lower-paid employees."

What happens, he said, is that when most of the folks being let go are below the average wage, then the average for those still being paid automatically rises. It's just math.

When the economy starts to improve, Anderson said, companies will start to hire again.

"Well, you don't hire them at the average or above the average of the people you have on," he said. "You hire them in at an entry-level wage, which is going to be below the average."

He said that explains why Arizona, where the recession has been longer and deeper than the rest of the country, is seeking larger average wage increases than the rest of the country.

"Those new people being hired in Iowa and in Georgia and other places like that are coming in at an entry-level wage," Anderson said.

"That is holding down the wage increases in those states that are doing some hiring," he said. "And in Arizona, where we continue to lose jobs, you're losing people below the average."

Anderson said some specific figures in the BLS report for Maricopa County bear that out. They show that the average wage for government employees has risen 6.6 percent in the one-year period.

He said it's doubtful that the average public employee has received such a large raise, saying the statistic is more a reflection of the 4 percent drop in the number of workers.

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