Arizona to keep adding jobs for rest of decade - East Valley Tribune: Business

Arizona to keep adding jobs for rest of decade

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Posted: Thursday, September 20, 2012 5:43 pm

State economists say Arizona will continue to add jobs for the balance of the decade.

But for a lot of them, the main qualification may be the ability to say, “May I help you?”

The projection comes from the state Department of Administration as it announced Arizona added about 9,000 private sector jobs between July and August. But that wasn’t enough to move the seasonally adjusted unemployment rate needle off of 8.3 percent.

Aruna Murthy, the agency’s director of economic analysis, said the state has managed to post year-over-year gains in employment exceeding 2 percent for the past three months, faster than the national average. And she said Arizona’s private sector employment has been on the rise for six months.

But Murthy said nearly three-fourths of the jobs Arizona will create between now and the end of the decade will be positions that require only a high school education — or even less. The result, she said, is that a large percentage of all Arizona college graduates will leave the state to find work elsewhere.

Dan Anderson, economist at the Board of Regents, said the post-graduate retention figure is in the neighborhood of 75 percent, at least for students who were Arizona residents when they entered college. But close to 30 percent of students are from somewhere else and are more likely to leave once they have a degree.

The August unemployment numbers had some particularly bright spots.

Jobs in retail trade are up by 1,000 over July and 7,300 over the same time a year earlier. Murthy said some of this hiring was likely fueled by stores bringing on extra help for back-to-school sales.

And she said the financial sector also did well.

“This we think is the refinancing activity that’s going on, maybe contributing to some of that,” she said, as Arizonans take advantage of sharply lower home mortgage rates. Murthy also said there are more people working in the field of renting and leasing homes and apartments.

“That could be all the investor activity that’s happening in Arizona with regards to real estate,” she said, as the people who snatched up foreclosed homes at bargain-basement prices now work to find tenants.

But long term, Murthy said the real growth will be in the service trades, the jobs where a college education is not required — and the jobs that pay less than the median wage.

The biggest demand will be in that retail sales area. Murthy figured the state will need 22,692 new workers between 2010 and 2020, plus another 28,332 to replace those who move on or find work elsewhere.

But 2010 wage figures for Arizona, the most recent available, show those jobs pay a median of just $10.12 an hour. That extrapolates out to slightly more than $21,000 a year — assuming the jobs are available year-round.

By contrast, the median wage for the entire state is $15.89 an hour, or about $33,000 a year.

Cashiers also will be in big demand — at $9.19 an hour — along with waiters and waitresses whose median wage is $8.69.

And that beats what those in food preparation, including the fast-food industry are paid, by 25 cents an hour.

Murthy’s analysis comes the same day the U.S. Census Bureau released data on median household income for all the states.

That report says the figure of $48,108 for Arizona for 2010 slid by 2.9 percent last year, to $46,709. That rate of decline is more than twice as much as the national average of 1.3 percent.

And a separate Census Bureau report showed that the number of people in Arizona living in poverty jumped half a percentage point between 2010 and 2011, to slightly more than 1.2 million. That represents 19 percent of the state, compared with 15.1 percent nationally.

Still, Murthy said that 2-plus percent annual job growth is nothing to sneeze at, given how much faster it is than the rest of the country as a whole.

“I always try to think, ‘It could be worse,’” she said.

``We at least have jobs,” Murthy continued, even if they don’t pay the best. “It’s a low-wage state, nothing to deny there.”

Anderson agreed with Murthy that wages in Arizona are low, at least in part because of the jobs we have here. The key, he said, is figuring out how to attract major manufacturers to Arizona along with their better-paying jobs.

One of the problems, Anderson said, is that for years Arizona made its pitch to companies as being a low-cost place to do business, including low wages. He said that kind of approach not only runs counter to the idea of creating more high-wage jobs but probably no longer works.

“When you’re in an international economy, when you’re competing against other countries whose incomes are extremely low compared to us, that’s not a very good marketing approach,” Anderson said. “Let’s compete on quality, let’s compete on innovation, let’s compete on thoughts and those products that are high value.”

Murthy said there are some industries with higher wages that are thriving in Arizona, like aerospace giant Honeywell.

“They hire quite qualified, well-educated people,” she said. But Murthy said they just don’t have enough of those jobs to offset all those lower-wage positions.

Murthy said there’s another factor at work in depressed wages: People desperate for jobs will take what they can get, even if they are overqualified — and even if it doesn’t pay very much.

“If it comes to a fine line of feeding your family ... if it were me I would take a job for a low pay until I can find something better,” she said.

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