While I was in Phoenix last week, the Census Bureau released news showing the biggest annual jump in median household income since 1967 and poverty falling the most in 50 years. Nationally, incomes jumped 5.2 percent from 2014 to last year, to $56,516. The numbers are adjusted for inflation. Thanks, Obama.
The data are more complicated for Phoenix and low-tax/light-regulation Arizona. Income statewide rose 2.8 percent to $51,492. Yet it was down 9.7 percent compared with 2007. Metropolitan Phoenix median household income increased 3.9 percent to $55,547.
In other words, the state and metro area trailed a nation that includes Alabama, Mississippi, and West Virginia. Phoenix was No. 25 among the largest metros, with Nashville and Birmingham in the lead in percentage increase.
Drilling down to the city level is even more sobering. Seattle, which is undertaking numerous progressive policies that would supposedly kill business, led the nation with a total increase of $9,374 to $80,349. Blue Portland jumped $6,268 to $60,892. Denver, another blue city, saw incomes rise $3,062 to $58,003. And Phoenix? Its income struggled up $523 to $48,452. (No, that's not a misprint).
If any comfort can be had, San Diego's median household income rose a mere $72 to $67,871. But metro Phoenix's underperforming is a serious problem. The city's poor showing is even more troubling, the "hole in the doughnut" effect. More than 23 percent of the city's residents are below the federal poverty line, compared with 13.5 percent nationally and 17.4 percent for Arizona. The state's poverty rate fell 0.9 percent from 2014 to 2015, but had risen 3.2 percent since 2007.
No, purchasing power doesn't cut it as an excuse. The conservative Tax Foundation used federal Bureau of Economic Analysis stats to calculate the real value of $100 in each state. Statewide in Arizona you get $103.73, but that's not much, and I wonder how much it translates to more expensive metro Phoenix. The bottom line is that Arizona's conservative policies have not yielded a strong economy, especially one required for such a populous state.
It's telling that California, with its reputation for regulations and taxes, added 63,000 jobs in August, 42 percent of the U.S. total. Arizona added 29,600, "entirely due to (sic) the start of the school year and all the state and local government workers that entails," according to the Arizona Republic's Ronald J. Hansen. "Perhaps more importantly, the state's 12-month job growth slowed to 2.1 percent with the August figures. That's more in line with the sluggish annual rates posted between 2012 and 2014." So-called "anti-business" California boasts booming Silicon Valley, San Francisco and LA. Arizona tries to get a few of its back-office crumbs.
This week, the federal Bureau of Economic Analysis said that gross domestic product for metro Phoenix grew 1.8 percent to approximately $198 billion in real dollars, ranking No. 163 among 382 metros nationally. The increase in real GDP for all metros was 2.5 percent.
"But people keep moving here!"
This chestnut is the last refuge to justify the status quo. Indeed, the state's population grew an estimated 6.8 percent from 2010 to last July. Still, this is far below the trend line of growth, even during the Great Depression. But set that aside.
First, added population means added costs in the great growth-machine Ponzi scheme. For example, backlogs in road repairs alone are estimated to cost drivers $1.5 billion a year in repairs and extra maintenance. The state is billions of dollars in the hole for the costs of growth in the 1980s, 1990s, 2000s — always kicking the can forward. Education, transit, parks, and infrastructure are all starved while the Real Estate Industrial Complex playerz make a killing. Impact fees are minimal or non-existent. With this tax and land-use structure, population growth doesn't pay for itself. It is a burdensome cost.
Second, what kind of people are moving here? The majority are retirees and poor Hispanics. Among the Anglos, most are here for the "good deal" on housing and sunshine, and sorting themselves in with the dominant conservative tribe. Few have lived in real cities and want to build, love, and sustain one. The Hispanics, while making the backbone of the labor force in the toughest jobs, have little path up thanks to poorly-funded schools. They also have yet to make their votes count to change things. Arizona and Phoenix don't get their share of talented high-skilled workers, especially young people — a reputation for intolerance and lack of urban bones can't be overcome by "cheap" and "sunshine." All these souls are individually precious to the Lord, but Phoenix is not attracting enough world-class talent or civic stewards for a city its size.
Third, Arizona has long since hit population overshoot, especially in single-family tract house sprawl. A terrible reckoning is coming. But even if it hadn't — or shifted to a dense, oasis model — the population growth data point is the wrong "metric." Where Arizona needs is growth in K-12 and university funding, graduation rates, new companies in advanced industries, real headquarters, patents, software engineers, trade connections, commuter and intercity rail, trees and foliage in central Phoenix, preservation of wilderness, research institutions, high-end federal projects, real downtowns, transit options, historic preservation, and cultural assets. This is the growth that counts.
Finally, remember that this Holy Growth has always been highly subsidized, from the U.S. Army and reclamation projects to defense industries, freeways, flood control, etc. And this is not even counting the externalities, the costs from air pollution, contamination of groundwater, destruction of wilderness, and greenhouse gases worsening climate change. Arizona is distorted (and degraded) by not being priced appropriately.
I was always told by the playerz, racketeers, and local-yokel experts that "people are going to come no matter what." If so, they would pay the taxes for raising Arizona. Problem solved.
Read the latest journalism on the Grand Canyon State's challenges on Rogue's Arizona's Continuing Crisis.