Back in the 2000s, Phoenix was always at or near the top of the Milken Institute's list of best-performing cities. The local-yokel boosters made much of this. In reality, the metric was based on job growth and Phoenix looked pretty good, powered by the housing boom.
What a difference does the housing crash, Great Recession, and better measurements make. A few years ago, Milken retooled its survey. Now Milken uses a wide variety of yardsticks to present a more accurate and comprehensive look at how metropolitan areas are doing. In the new 2016 Best Performing Cities, metro Phoenix comes in at 46th.
Going deeper, Phoenix's five-year job growth ranked 40th; five-year wage and salary growth 63rd; short-term growth 76th; five-year high-tech GDP growth 56th (one-year was 110th); high-tech location quotient 56th, and the number of highly concentrated tech industries 63rd. It's not a pretty picture, especially when we're talking about the sixth-largest city and 13th most populous metropolitan area
At the top were Silicon Valley, Provo-Orem, Utah, Austin, San Francisco and Dallas. Among other Western peers was Seattle No. 10, Denver No. 13, and Portland No. 14. Blue "socialist" California won six of the top 25 spots among major metros. By comparison, Tucson was No. 155. Among small metros, Prescott was No. 33, Flagstaff 81, and Yuma 146. Bend, Ore., led the small metros.
Milken's emphasis on high-tech is important because this has been the sweet spot of the long recovery from the Great Recession. Cities at the headwaters of talent, innovation, and tech headquarters have done very well. For example, the hottest residential real-estate market is not in the Sun Belt but Seattle.
Another area of high performance in today's economy has been the "back to the city" phenomenon, with companies moving to vibrant downtowns to attract talented millennials and others who want a car-free lifestyle and the choices of a dense, lively city. While downtown Phoenix has made more progress, it has largely missed this gravy train. Most economic activity, and most of it low-end, is in the suburbs.
Phoenix continues to play its old game — largely without the Cold War tech industries that helped diversify the economy in the decades after World War II. Add population, build tract houses, put up spec commercial and industrial space, sell sunshine. It's not a path to prosperity or success for such a large metropolitan area. Particularly one sitting at ground zero for climate change. Even the occasional headline about "another" Silicon Valley company setting up shop "in the Valley" reveals a back-office operation seeking cheap, low-skilled workers.
So much for the performance of low-tax, little-regulation Duceynomics.
Even by Phoenix-centered metrics, the bird falls short. In the latest Emerging Trends in Real Estate, another gold-standard survey, the top cities are Austin, Dallas, Portland, Seattle, and Los Angeles. Places with, you know, real economies to support real estate. Phoenix comes in a middling 21st (Tucson 62nd).
The devastation of the housing crash was so severe that it took until 2015 for Phoenix to recover to its pre-recession peak in jobs. But there's a big difference: Job growth has been much more restrained than in previous expansions. Only about 20,000 worked in construction as of October, compared with a peak of 33,800 in the go-go years of the 2000s.
This is the recovery. All Phoenix got was a lousy T-shirt.