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May 25, 2015


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Growth for the sake of growth is the ideology of the cancer cell.
Edward Abbey

But Arizona has continually cut taxes and spending while keeping workers' wages down. How can these charts be true?

Economics isn't science, and science isn't God. Only God can decide.

God Bless Arizona! God Bless The Republican Party!

Couple of things:

1. The boom was bigger in Phoenix than the other cities, so an arbitrary comparison to the boom maximum employment is a little awkward. Bigger boom, harder to recover, at least when compared to the boom.

2. San Diego is a mess, especially the entire Metropolitan area (away from the ocean)

3. Check this out:

Total US manufacturing jobs have decreased about 46% from 1998 to 2012 wherein your data shows they've decreased about 43% in the geographic area.

So, it's better than the national average.
Sometimes comparisons are helpful.

4. Does your data include Scottsdale and Chandler?

Don't get me wrong- the economy here is far from perfect. It might even be fair to say that is has recovered a tad bit more slowly that others- but that might be primarily because the boom was boomier.

In terms of weekly earnings, Seattle looks like about $1250 per week, Denver is $1000, and Phx looks like $850.

Denver and Phoenix are almost a push in term of cost of living but Seattle is about 20% higher than either:


The data are for the entire metro metropolitan area, including Scottsdale and Chandler.

It looks like in includes all of Maricopa and Pinal counties, and probably even the reservations:


Do the other MSA's have similar areas that might tend to pull down the numbers?

Sure, Tacoma pulls down Seattle.

But wealthy enclaves do well in some of the most benighted places in the world. What does that prove?

Phoenix is punching below its weight, facing new challenges without a realistic strategy, and, sure, some folks are doing fine. The more ominous feature for the future, even if one drains the moral issues away, is how many are not.

Back to the day job.

Does Tacoma pull down Seattle as much as the reservations pull down Phoenix? Or as much as some of the other AZ rural areas included in the Phx MSA??

That's always a problem with comparing MSA's- the compositions of the population are rarely the same and there is no data to give you a sense of the standard deviations.

There could actually be a higher percentage of people doing "OK or better" in the Phx MSA than in the Seattle MSA. You can't just assume that both areas have identical (or even similar) numbers pulling those numbers down.

BTW, comparing the hourly earnings without comparing the costs of living is a little incomplete.


See a trend?

There's some good data in the current Phoenix Business newspaper that discusses a new program called Velocity.

It does a much better job of showing the ways Phoenix has changed in the last 30 years or so.

The following ranking is for cost-of-living adjusted per capital incomes. It’s a little dusty (2012 vintage data) but I think the relative ranking and approximate differences are valid. The data is for Metros, not cities.
San Fran-Oak, CA $52,105 1
San Jose, CA $51,095 3
Houston, TX $48,053 7
Seattle, WA $47,290 10
Denver, CO $46,337 13
Kansas Ci, MO-KS $45,802 15
Oklaho City, OK $44,543 20
Dallas-Ft Wh, TX $43,327 23
Sacramento, CA $41,371 35
Austin, TX $41,339 36
Portland, OR-WA $40,706 39
San Diego, CA $39,657 43
San Antonio, TX $39,436 44
Salt Lake Ci, UT $38,705 46
Los Angeles, CA $37,192 48
Phoenix, AZ $36,155 49
Las Vegas, NV $35,053 51
Rside-Sn Brdino, CA $28,472 52

Comes from this, which I have previously posted.


I’ll admit, that being “per capita” counts everybody – children and the elderly included.

I'm going to break down my replies into chunks dealing with related issues. Some will have to wait until I go off mobile and can access PDF files for research.

First, total employment and job growth:

Interestingly, chart #3 shows that since the end of the Great Recession, the Phoenix and Seattle metro areas have an identical number of total employees and have grown them at an identical rate.

As for Phoenix's failure to recover pre-recession employment totals, chart #3 also shows that Phoenix lost not only more employees but also a greater percentage of its employees than any of the other five metro areas compared. (This is easily visually confirmed by comparing the employment graph line for each metro area within the gray shaded area representing the recession period: Phoenix's is much longer and with a much sharper downward slope than any of the other metros.)

Chart #8 shows us the reason for this: a loss of more than 100,000 construction jobs from the Phoenix metro area alone, of which 80,000 have yet to be replaced (more on that in the next comment).

Chart #2 shows that total employment for the Phoenix metro area remains behind the pre-recession peak by roughly 30,000 jobs.

Taken together and properly interpreted, the charts actually show that Phoenix has done better at replacing lost jobs than any of the other five metros compared: it simply lost a lot more jobs during the recession, both in absolute terms and as a percentage of total employment.

Second installment: Phoenix area construction jobs, housing, and the traditional growth model:

Chart #7 shows single family housing starts in Phoenix flatlining at a low level since 2010. Phoenix built a great deal of housing, ahead of the demand curve and on spec, during the housing boom. Until that is absorbed and other structural factors improve, construction jobs will continue to grow slowly.

That's why 80 percent of construction jobs lost in the Phoenix metro area have yet to be replaced. The hoards of Mexican roofers, framers and construction laborers have gone to Texas, which largely avoided the housing crash (in part because of tighter regulations governing leveraged house-flipping).

The good news is that having left, those now surplus construction workers don't contribute to the unemployment rate, which is one reason why as of March 2015, Phoenix's had dropped to just 4.8 percent, which is pretty good.

As for when construction might pick up, chart #6 is really quite encouraging, not ominous. It shows the Case-Shiller home price index for Phoenix higher than at any time since 1990, except for the three year spike from 2005 to 2008 (which was unhealthy and an unsustainable bubble anyway). So a lot of the slack has tightened in the Phoenix housing market.

Still, it could be years before single family housing construction becomes a strong part of the Phoenix metro economy again. I'd watch for several things: high multi-unit (apartment) occupancy rates (which have already occurred); an increase in net migration (which the state is in the initial stages of); and the passage of enough years which, under Arizona law, allow home foreclosures and other recession related credit problems to drop off the credit records of mortgage loan applicants. (Seven years?)

Somehow the posts seem to fail to see that it is not the number of jobs; it is the type and the pay for those jobs that have been retained or added.
Note the names in the Seattle area; Microsoft, Amazon, Boeing and many many more.
Note those in Phoenix or even the Metro area; Motorola (gone), Honeywell (sort of gone) America West (gone) the locally owned banks that had large support staffs (gone), regional banks who consolidated operations in other locations, and no companies absorbed the workforce or provided jobs. Ramada (gone); too much gone and not enough here here.

First things first, Richard.

Third installment: Comparing weekly average earnings:

Chart #5 compares weekly average earnings (aka weekly average wages) for the Phoenix, Denver, and Seattle metro areas.

Obviously, local wages reflect not only technical job specifications but also specifics local to each market such as cost of living.

But the biggest single cost of living item factored in by employers competing for workers, are employee housing costs, since housing is the single largest and most obvious cost considered by employees considering moving to or away from a locality.

A weekly wage that would be attractive in Seattle wouldn't be attractive in San Francisco even for an identical job. Given a choice between the same salary in Frisco and Seattle, many employees would opt to move to Seattle; so Frisco has to pay more just to retain the same talent.

In 2014 Business Insider published a study comparing, for 25 major metro areas, the annual salary necessary to purchase an "average home".

The figure for Phoenix is $32,812; for Denver it's $48,123; and for Seattle it's $59,130. You can read about methodology below:


The point is that Denver's housing cost is 147 percent that of Phoenix; and Seattle's is 180 percent that of Phoenix.

You can't compare local wage differences without accounting for local wage market differences based on local cost differences.

If this fails to move you, go to the Bureau of Labor Standards (BLS) website and compare local weekly earnings for specific jobs, such as mechanical and electrical engineers, software programmers and systems analysts, and any other strictly comparable job titles for wage earning employees, for Phoenix, Denver, and Seattle.

That way you're not comparing average wages for composite job markets that aren't comparable because there are differences in the mix of jobs available: you're comparing specific job titles. So when you find that those same wage differentials persist for the same jobs, it isn't because one locale has better jobs than the other locale. This will be as true for menial jobs as for good jobs.

Postscript to Part Three:

Wage pressures from the bottom up are another often overlooked component of average weekly wage differences between different locales.

The minimum wage in Phoenix is $8.05 per hour; in Washington State it's $9.47 per hour; and in Seattle it's $15.00 per hour.

Those wage differentials don't just affect the comparatively small fraction of workers making the bare minimum; they act as a floor to wages which push the rest of the wage scale upward.

The guy who was already making $9.47 or $15.00 per hour doesn't want to keep making that when the minimum wage is raised to match his old salary: if he was making two dollars more than minimum before he wants to maintain that difference; so his wages have to be increased too, even though he isn't technically affected by the rise in minimum wage. So too for the guy above him.

All of that can push up "average" weekly wages.

Also note that Maricopa County average weekly earnings typically run close to the U.S. average. Here's a none too favorable BLS report from 2Q 2014 (it's tough to get more up to date info without accessing a PDF file):

"Average weekly wages in both of Arizona’s two large counties were below the national average of $940 per week. Maricopa County’s $931 average weekly wage placed near the top third among the 339 large U.S. counties, ranking 115 th ... Santa Clara, Calif., held the top position with an average weekly wage of $1,886. San Mateo, Calif. was second at $1,740, followed by New York, N.Y. ($1,732) and San Francisco, Calif. ($1,593)."

Per capita income figures (such as those used by wkg) are simply misleading.

Something like 40 percent of Phoenix is Hispanic, and of all the major cities it's the youngest Hispanic demographic in the nation (i.e. the one with the largest percentage of Hispanics 18 or under). Those kids under 18 don't earn incomes for the most part but they are included in per capita income calculations, so they just drag the average down.

Similarly, as of 2013, 27 percent of Arizona's population was 55 or older (no idea if the figure for Phoenix is different). Retirees tend to make less (being unemployed) so they drag down the per capita income figure too.

The funny thing is that all of those old Whites and child Hispanics tend to somewhat offset each other in aggregate "average age" statistics for residents.

Also note that having 27 percent of AZ residents retirement age can put a crimp in median household income figures too.


Several of the big brain thinkers on this blog are the type of person who would walk up to an ex-construction worker, who is now working part time at a Circle K, and comment "well, it looks like things are going OK with you. Can I show you my charts?"

And as they left the Circle K with the charts shoved up their ass, they still wouldn't have a clue why the worker was mad.

Clueless doesn't begin to describe them.

Glad to see there is finally someone to blame for
Arizona's terrible state. God.
Same God that has been running amok and is a terrible business manager that has been performing decapitations since Adam and Eve arrived.

And our governor's response-try to take this to the voters and I will sic the dark money men on you.WTF-Is this guy on another planet.We have major problems here and now and cannot afford 4 more years of business as usual.Watching "The Roosevelts" as I read this and couldnt help but wonder why we aren't willing to try anything-even if it's wrong.R we really the frog in the pot that slowly gets boiled to death?

I'd like to see "Common cents" banned for trolling. I know he works hard to be as irrelevant, off base and provocative as possible, but these astoundingly self satisfied sermons fail to add value even as the ravings of a "character". So please hand him his walking papers. Gratuitous and perverse personal attacks on me make me angry.

P.S. If "Common cents" were sincere in his remarks, they would still be as fatuous but they would at least have the virtue of genuine passion. They are instead the work of a very cold and beady-eyed viper, attempting to sow anger and resentment. Very well: be careful what you wish for.

Curious that the commenter in question capitalizes his first name but not his last; just the opposite of someone else I know. Curious that his provocations are laced with laughably insecure anti-intellectualisms (big brain thinkers! charts!); and this too reminds me of someone else.

Recently posting under yet a third online name, this same individual used some familiar idioms, too (experience on the ground vs. boots on the ground) in his invariable pose as a Man Of Experience. (Lacking coherent counterarguments, his only recourse is to invoke a vague, unprovable, but supposedly all-important concreteness, while using haughty language to puff himself up; much like the Wizard of Oz, or a small hissing wall lizard.)

He then had the audacity to post a follow-up comment to himself (using his regular screen name) in a pretence of distancing himself. It was as though one deception wasn't enough to satisfy his perverse tastes: no, he had to double down and wrap his first fraud in a second. Oh, how very clever is this Dog who looks in the mirror and, seeing his name tag in reverse, says "I must be God!". He even gives out poisoned apples, just like the Disney character. Mirror, mirror on the wall...ever the vain one!

I suppose at this point it is superfluous to mention the oddly consistent juxtapositions of these comments, first by the one screen name and then by another?

Emil dear, . . there are times I wish that YOU would drop the pontificating. Trolling is essentially harmless; but just look at what Obama's pontificating has wrought.

Emil ease up. No need to be angry. I really enjoy this site and it's the only one I come too. No need for book burning or banning. Sounds very dictoral and somewhat arrogrant I read everything that's posted here regardless of trolling, whatever that is. Most of what you post i find of interest but even on occasion i nod off while trying to absorb what you post. And i really enjoy it when folks like GOP brain trust showup. And since I post as little c cal and big L Lash
am I in the boat with Common cents. Who cares how someone spells their name. Most posters don't even use their real name. So if you are finding anger here maybe you should give that some introspection. Take a break maybe go to a quiet place on the Ocean or somewhere where the silence roars.

Dudas. Rather than tell me what Obama didn't do, specifically tell me how it would have been better with Romney or McCain.
PS, you been to Frog Mountain lately. I hear it has the blues?

Some people on here need to take a "chill pill". I personally enjoy reading some of the biased nonsense that appears. It just proves the axiom that it is better to keep one's mouth shut and appear to be a fool than it is to open it and confirm it
Peace to all.
"In Vino Veritas" as Doc said.

I am tired of being the victim of vicious personal attacks simply because I disagree with something, or take an active interest in something, or write well, or think well, or enjoy myself. I am tired of interesting examinations of issues being disrupted that way. It happens virtually every thread I become involved in, lately. It is not harmless, it is not interesting, and it is going to stop. The irrational hostility is going to stop, and the cowardly false premises with which the defectives seek to conceal and justify that irrational hostility is going to stop.

The blog manager needs to take a more active hand sorting the grain from the chaff. He needs to get the dogs on a leash, instead of allowing them to bite and threaten the guests and to cover everything with the stink of their stale piss. If he allows the blog to go to the dogs, that is where it will go. There are already very few active contributors offering anything of substance. Quality over quantity is fine, even preferable, but now the quality is threatened too. Enough. I will not be subjected to PERSONAL attacks in this fashion.

It looks to me that INPHX was the person who was making the point that things are more OK than the stats are showing.

It appears that Mr. Cents is directing his/her comments at persons who are pushing the everything is OK scenario.

The only way I can see Emil taking the comments personally is if he identifies himself with the description , big brain thinkers. If so, that's one healthy ego you have there.

Personally, once I saw , big brain thinkers, I knew in an instant the message wasn't for me.

I do have a comment that is not supported by any data, but it is 100 percent correct: things are not OK.

Gentlemen, you can't fight in here! This is the War Room.


what I'm suggesting is that metro Phoenix and Arizona might be dragged down more by reservations and rural areas than the other MSA's are.

I don't know that that is true, but I suspect it is. And if it is, by definition, it make the comparisons of averages misleading.

The same could be true on the top end; if there are a lot more super wealthy people in Seattle, it might make the average misleading (same if there are more very wealthy people in the Phoenix MSA).

I suspect a couple of things are true:

1. There are more "knowledge" workers per capita in the Seattle MSA than there are in Phoenix.

2. Wages are higher in Seattle than in Phoenix for the "average worker".

3. The cost of living in Seattle is a lot more that Phoenix. And you typically have to pay a 25% or so marginal income tax rate before you can really get even; I don't think any of the cost of living indices take that into account.


Love the reference to one of the greatest movies ever made. My dad would laugh until he cried when Dr. Strangelove's arm would attack him and he would try to fight it off.

I wish time allowed me to interact more, but usually I have to let the column speak for itself.

INPHX, the population of the Salt River rez is 9,357, according to the always reliable Wikipedia. The Gila River was 11,712, per the Arizona Rural Policy Institute at NAU.

In other words, tiny slices in a metropolitan area of nearly 4.5 million.

Also, the Salt River Indian Community has become wealthy thanks to casinos and development.

The last time I took a deep dive, Arizona had one of the most "urbanized" populations of any state, which makes sense when you consider how municipalities have historically controlled water. In 2010, the urban population was nearly 90 percent of the state total, vs., say, 39 percent in Vermont. The West is the most highly urbanized region.

The Phoenix MSA may have 14,500 square miles, but the population is relatively concentrated. Little of it is rural in meaningful sense of the word.

Phoenix is a big metro area that largely underperforms its peers in critical measures of quality and competitiveness. And it is competing in this arena whether it likes it or not. The powers that be, and many average residents, continue to be in denial. Indeed, there was more acceptance of how this held back the entire metro and state in the 2000s than now.

Why is Seattle a peer of Phoenix? A better peer group might be San Antonio, Oklahoma City and Sacramento.

I recall a Maricopa County manager during the boom 1990's comparing Phoenix to Seattle. To me, it was ridiculous then and now. Take away the real estate game, and it's nothing but a crying game for Phoenix.

Do we need charts to support the obvious.

Any meaningful benchmarking needs to be among similar sized MSAs. Phoenix is 12th. Seattle 15th. San Francisco 11th. San Antonio is way down at 25.

Phoenix can say, hey, we're better than Fresno! That's an old game. Or, until recently, consider bodies and housing starts as metrics of a quality economy. That's not what I'm writing about on this site.


The Phoenix MSA includes Pinal County (you knew that--didn't you?).

The Phoenix Metropolitan Area – often referred to as the Valley of the Sun, the Salt River Valley or Metro Phoenix – is a metropolitan area, centered on the city of Phoenix, that includes much of the central part of the U.S. State of Arizona. The United States Census Bureau designates the area as the Phoenix-Mesa-Glendale Metropolitan Statistical Area (MSA), defining it as Maricopa and Pinal counties.

Pinal county is about 400K ,or a little less than 10$ of the total. It also includes several more reservations that you outlined.

It's median household income is $ 35,856 (the Phoenix MSA is just over $50K) and the poverty rate is 17%.

BTW- been out to the Salt River Indian reservation lately? Even with the wealth you allege, it ain't exactly Paradise Valley. Matter of fact, freakin' Eloy still laughs at them.

I really don't even know what we're arguing about here. Phoenix is a low cost, low tax, low wage option. Seattle isn't. Neither is San Franscico. Or London. Both of which probably laugh at Seattle.

Lots of "very serious people" want to make Phoenix look or act more like Seattle. I think that's a foolish, risky proposition, and I'd hate to see funds committed to that goal. Cause there's a real good chance that it just won't work.

Rolls Royce doesn't build an econobox and there's no $300K Hyundai.


As I've said before, there will be small victories at the margins. But planting trees downtown ain't going to turn it into Pike Street Market.

And while I'm at it, passenger fares covered about 16% of operating expenses for light rail.


Page 11.

And a least $113M in operating subsidies for 2014.

And a billion 2 in the ground.

Of course, there's been so much development along the line.........

Thanks, guys. Nice work.

Comment wasn't directed at you Emil. However, I will grant your wish and self deport. Giving you a coronary is not worth it. Consider me gone.

I forbid self-deportation.

I'm the sheriff here and keep the peace. I saw nothing in Common Cents' post that was out of bounds.

People make points in different ways. Some with learned research. Others with pithy, brief remarks. Both ends of that spectrum and everything in between are welcome. More than that, it's needed.

If someone goes out of bounds, they will know it -- from me.

Just an opinion. I don't believe the metro area will ever fully recover from the loss of 100,000+ electronic/ aerospace jobs.

The reverberations of that loss travel through our community to this day.

I can see why Emil would be especially agitated with some trollish behavior. He goes out of his way to base his arguments and points of view in absolute fact. He spends his time researching before posting and it shows. He takes this blog very seriously. That being said, we need a few moments of comedic relief now and then. After all, Rogue delves into weighty material.

I admit to having my brief history of run-ins with Emil a few years ago. Then something happened: I had to complete real university research and pay for the privilege. I started to mind the world around me. Being a cheerleader was easier than digesting some depressing data. I then realized that if the data were used to inform change agents it could lead to positive outcomes. Even for a place like Phoenix.

All I can write to Emil is to not take those comments he finds offensive to heart. I think I speak for the majority of readers here when I say that your data and well-researched posts are appreciated and needed.

well said Phxsunfan

In Arizona (and Phoenix) Republicans dominate, so it's easy--and often accurate--to "blame everything on Republicans." As a Republican, I make no excuses for us. We need a "Goldilocks" approach to tax policy and tax structure. Taxes that are too low are just as counterproductive as taxes that are too high.

Moreover, I think Jon has successfully made the point in previous posts that the whole image of the "self-sufficient, independent Westerner" is in many ways a chimera. From Roosevelt Dam through the CAP, Arizona needed the Feds to help make it happen.

However, I suspect that even if the Democrats were in charge, things would not be much better. At some point ideology--of the right or left--is trumped (Poor choice of words these days) by genuine "buy-in" by stakeholders. Ours have mostly vanished. Most of the Bimsons (Valley National Bank) were Republicans. Other stakeholders were Democrats. Goldwater and Rhodes were Republicans; Hayden and Udall were Democrats (albeit fairly conservative ones compared to today's Dems if you ask me) Anyway, it didn't matter--Arizona came first--they all worked together.

Yes, Arizona has always had its "dark side" as Jon has been quick to point out. But, at one time, it had real stakeholders who were "invested"--emotionally, and culturally as well as financially--in the community. They both set the tone for everyone setting a vision and working together as well as kept the politicians on both sides of the aisle from going too far off the deep end.

Think of it this way: On a personal level most of us who have been around for awhile find ourselves saying things like, "Such and such (family quarrel, scandal, etc.) would never have happened if (e.g. "mother") were still around."

That's where Arizona is, today. For Joe Arpaio to happen, for example, stakeholders like the Bimsons and their contemporaries had to be gone. They would never have put up with such foolishness. Yes, I know the "good old days" weren't all that great, but with all their faults--e.g. portions of the community that weren't at the table--stuff WORKED! For better or worse, things got done.

Compared with Seattle, Twin Cities, lots of other metros, Phoenix lacks stakeholders and the corporate headquarters that provide them. Right or left, sufficiently investing in our education and infrastructure in ways that will make our state and community competitive and attractive to new corps. or old ones looking to relocate is a key element of turning things around.

Yo, what's with all the "reservations bringing down the average" talk?

I happen to be a member of the Salt River Community, and I have good knowledge of numbers relevant to this post. Also, while I'm only in my mid-forties, I can remember when the reservations were dramatically different places that once could have actually caused a negative deviation in local economic figures (my grandmother was enrolled in Gila, and I have lived good parts of my life on both reservations).

The current average annual salary for employees of the Salt River tribal government and its enterprises is just about $45,000. Employees of the Community also receive a benefits package roughly equal to 30% of their salary. While the salary number is not overly impressive, it doesn't appear to be significantly lower than the Phoenix metro average.

Additionally, when I was a tribal bureaucrat I was once asked by a former tribal president to essentially "solve" an issue with average household incomes on the reservation. They had become too high to qualify the tribe for a number of federal programs. At the time, my charge was to improve the quality of life for Community members, so that was a little disappointing to say the least. I also went to a college that currently offers free tuition to students who come from households that make less than $100,000 a year. It's a great offering, but as I promoted my alma mater to more youth of both the Salt River and Gila River tribes, I learned most of the households, when you add multiple individual salaries with multiple individual gaming per capita incomes, did not even qualify.

Trust me, I'm not blind to the persistent social and economic issues on the reservations, but I am also fairly certain those locales are not significantly responsible for "pulling down" the regional economic numbers.

Finally, I was always taught not to laugh at other people and their misfortunes - even those from Eloy.

Thanks for all the information Rogue, and now that I have a name to post under, I may just try to contribute a bit to the discussion.

Thanks for these important and needed facts, Hands Closed. You are welcome any time.

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