Our View: State growing quickly: If only wages and jobs kept up

December 29, 2018

Arizona’s population growth is noteworthy. It’s the fourth-fasted growing state both in terms of percentage and people, a testament to the state’s attractiveness.

It’s also noteworthy that people don’t come to the state for great jobs. Wages are lower and the unemployment rate higher than many states. Some experts say low wages and higher jobless rates are due to the incoming population adding to the workforce while employers are not adding jobs.

Nah. Arizona’s low wages and higher unemployment are a tale as old as air conditioning. It’s the story of a state economy based on tourism that pays its wages in sunshine.

Arizona has made some significant economic strides in recent years by bringing major corporations to the state. It needs to do that and more of it. The non-tourism bedrock of the state’s historic economy is not keeping pace. Agriculture, in particular, is threatened by water shortages.

Tourism is a wonderful thing and it’s a byproduct of the natural gifts of Arizona. Sweeping vistas, grand mountains, warm winters, etc. Arizona needs to be much, much more than that if it wants to enjoy the economic successes of other states.

It may not need an Apple or Google headquarters, but it does need more large businesses. It especially needs more of that activity outside of Phoenix and Tucson. It’s not like the state has nothing to sell outside of the metro areas; the same quality of an environment that attracts visitors can translate into strong quality of life features for companies.

Yet it take more than nice scenery. It take a strong workforce. It take strong infrastructure including transportation. It takes a strong workforce, or did we mention that already?

The state’s voters decided, unwisely in our view, to socialistically increase wages in Arizona. The new minimum wage in Arizona goes to $11 on Jan. 1 and then to $12 a year later. This sounds attractive to someone making less in a neighboring state, perhaps, but it is still minimum wage.

One of the major problems with a voter-ordered minimum wage increase is that it doesn’t come from economic growth. The extra cost to businesses can be significant and is forcing many toward automation of low-end jobs.

So the state’s minimum wage attracts a low-skill workforce hoping to land an $11 per hour job only to find that those jobs are unavailable. There’s the conundrum of high population growth and low wage growth explained in one sentence that’s at least partially true. Arizona can’t rest on its growth laurels. It needs high-quality education including a broad and accessible university system to prepare people for a new economy. It needs better infrastructure, including basic roadways.

It needs to break the cycle of dependence upon tourism and construction as the real drivers of the economy.

— Today’s News-Herald

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