Arizona State University’s W.P. Carey School of Business has a new report out on the top ten cities and states for job growth. ASU economist Dennis Hoffman will tell us more.
Ted Simons: ASU's W.P. Carey school of business is out with a new report on the top 10 cities and states for job growth. We found out how Arizona fared in the research from ASU economist Dennis Hoffman.
Ted Simons: Good to see you again.
Dennis Hoffman: Great to be here, Ted.
Ted Simons: Research, job growth numbers, first three quarters something along those lines.
Dennis Hoffman: Right. First of all, a little plug, this is Lee McFETERS effort at the university. Lee couldn't be here tonight. I have worked on it to some degree. Go to this web site, WPCAREY job growth and -- this web site will allow you come up. It allows you to rank major cities and job creation metrics.
Ted Simons: What are some of the metrics?
Dennis Hoffman: Non-farm jobs. That is the show case job number. You can look at goods producing, service-producing jobs, manufacturing jobs, construction jobs, government health care, the whole gamut. I'm happy to talk about some of those at least tonight.
Ted Simons: Let's talk about the rankings in general. What were some of the stronger areas, stronger cities, and some areas that you thought might have been stronger but weren't?
Dennis Hoffman: Well, the strong, no surprise in some degree, North Dakota, Texas, driven by oil and minerals. Nevada is back in the mix after a lot of years of being out of it. But the interesting thing to me is Utah, Oregon, Colorado, California, Washington are all ahead of us. New Mexico, our neighbor, of course, is down below us, but at this point in the business cycle, Ted, all -- almost all of the economists that I know were forecasting more robust job growth out of Arizona than what we are seeing. And, so, it is unfair to say that it's, you know, the nation is in the doldrums. We would be a different state if we were growing jobs in the high two percentage points --
Ted Simons: Nevada, Utah, Colorado, all three in the top 10. Very close by. Saw that Florida, Texas did well. West coast in general did well. What do we make of all of that?
Dennis Hoffman: Well, regional economists like to point toward the drivers of job growth and drivers of economic growth. We talk about the base industries in the state. Kind of the goods-producing, export oriented industries. And the fascinating thing, if you look at goods producing for Arizona, we're not 14th. We're 47th in the nation. We're near the bottom in terms -- we don't make things to ship out of this state. Part of that is construction. We're anemic in construction as well. And interestingly, during our heyday, you can look at goods producing and you can also look at history on this web site. You can pull up the last 20, 30 years and you can see how the rankings looked in particular years, and you will find that during the heyday of job growth in this state, we did okay in goods producing. Part of that is construction and, you know, our ability to manufacture aerospace and defense, and electronics manufacturing, and all of that is fragile right now.
Ted Simons: I did notice Arizona was number three in health care job growth.
Dennis Hoffman: Yes.
Ted Simons: Number five in financial activity.
Dennis Hoffman: Those are the bright spots. Those are the bright spots. Yes, indeed. So, and I -- I think it is fair to think of financial services as an export-oriented business. Exporting services there.
Ted Simons: Sure.
Dennis Hoffman: But and so that is a good thing. I think that is definitely a bright spot. But the interesting thing to me is to think about the fact that at this point of the construction and growth cycle, we're losing construction jobs. And people might argue that, hey, that must be the case around the nation. Nevada and Florida are creating jobs in construction at a 11% year-over-year. Utah, 8.7%. Colorado, almost 6%. California almost 6%. There are states that are actually generating construction jobs, and that's a sign, of course, of domestic -- or immigration or population growth in general, and/or the fact that their youth in these states are beginning to buy homes or they're moving in to apartments. This could be multi-family as well, and we have some things. You look around the city. You see some growth areas. But the numbers suggest just not as fast as some of our neighbors.
Ted Simons: We see the no income taxes crowd here with Florida and Texas. We see the big income tax crowd here with areas along the west coast. I don't know what kind of sense you can make of that. How do you look at these numbers in these states and say here is what Arizona should be doing?
Dennis Hoffman: Okay. So there is no one fiscal recipe from these data. I mean Colorado, Utah both have individual income taxes. Oregon is dominated by individual income tax. They're actually growing faster than Washington that has no individual income tax. And, look, taxes on the finest of margins matter. But they can't swamp some of these basics. What is holding us back. I would argue that our growth historically may have been fuelled, say, by my generation. Attracted by the population growth magnetism of an Arizona. It was very attractive over the last three, four decades to move here, to come, to prosper, to grow. Land of opportunity. Unfortunately, it must not be seen quite that way by today's generation.
Ted Simons: I was going to ask that. Are young people still seeing this as a -- I mean, Arizona, it was almost a cliché, you came out here, reinvent yourself, start a new life. All sorts -- are people just not seeing Arizona in that light?
Dennis Hoffman: Well, look, you know, I think it would be unfair for the two of us to just start in with the bash of the state. Woe is us. We're all down. I think there are fewer opportunities, and there are -- there is images that are being admitted by the state. And some of these are really subtle. You know, I have been here 36 years. We have always had dust storms in this state. But only recently do people take videos of them -- and put them on international media. To the people out east, that looks like the dust bowl of the 30s. As you know, all it does is delay our barbecue by about 30 minutes.
Ted Simons: We have about 30 seconds here. Are we looking at a new normal, new paradigms here?
Dennis Hoffman: I was unwilling to adopt that premise two years ago, and frankly my forecasts were wrong. I -- I had us in the Utah Colorado range right now. 3% job growth and above. Because I couldn't be convinced that we couldn't recover here. But now I'm of the belief that it is -- I've got to see it before I can believe it. And, so, what we need to do is develop a strategy to market the state, market it on its positive attributes, and there are a ton. We've got a tremendous potential, I think, in this state. But we've also got a market and develop and retain talented, young people. We have to produce them. And then retain them. In order to retain them, there has to be great job opportunities here.
Ted Simons: Yeah.
Dennis Hoffman: And I fear we're losing too many.
Ted Simons: Interesting study. WPCAREY job growth --
Dennis Hoffman: And job growth all one word, I bet if you put that in all one word probably all you need.
Ted Simons: Good to see you again.
Dennis Hoffman: Very good. Thanks.
Dennis Hoffman:Economist, W.P. Carey School of Business at Arizona State University;
