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: Good evening and welcome to "Arizona Horizon." I'm Ted Simons. ASU's w.p. carey school of business is out with a new report on the top ten cities and states for job growth. Here to tell us how Arizona fared in the research is ASU economist Dennis Hoffman.
Dennis Hoffman: Great to be here.
Ted Simons: Job growth numbers, first three quarters, something along those lines?
Dennis Hoffman: First, a little plug, this is Lee McFeeder's effort at the University, and Lee couldn't be here tonight. I worked with him on it to some degree, but I invite people to go to this website, and it's very simple. Wpcarey, all one word, no dots, and jobgrowth, all one word, and throw those in a search engine and this website will pop up, it will allow you to rank states and major cities on all sorts of different types of job creation metrics.
Ted Simons: And what are some of those?
Dennis Hoffman: Well, non farm jobs, that's the showcase job number. But, you can also look at goods producing service producing jobs, manufacturing jobs, construction jobs, government, health care and the whole gamut, so I'm happy to talk about those tonight.
Ted Simons: Let's talk about the rankings in general. What were some of the stronger areas, stronger cities, and what were some of the 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. And, and, and 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 and, and at this point, in the business cycle 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's unfair to say that the nation is in the doldrums. We would, we would be a very different state, I think, today if we were growing jobs in the high two percentage points or three percentage points like many of our western neighbors are.
Ted Simons: And I saw Nevada, Utah, Colorado, and all three of those in the top ten, and they are very close by. And also saw that Florida and Texas did well, the west coast, in general, did well. And, and what do we make of all of that?
Dennis Hoffman: Regional economists, like to point towards the drivers of job growth and drivers of economic growth, and we talk about the base industries in the state, 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. 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, you also look at history on this website, too, by the way. You can pull up the last 20, 30 years, and you can see how the rankings looked, and in particular years and you will find during the heyday of job growth in the state, we did ok in goods producing. Part of that is construction and, and our ability to manufacture aerospace and defense and electronics' manufacturing, and all of that is fragile right now.
Ted Simons: And I did notice that Arizona was number three in health care job growth. Number five in financial activity job growth, so those are the bright spots.
Dennis Hoffman: Those are the bright spots, yes, indeed and, and so, and I think that it's fair to think of financial services as an export oriented business. We're exporting services there. But, and so that is a good thing, and I think that that is, 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 must be the case around the nation. Nevada and Florida are creating jobs in construction at 11%. Year over year and, and Utah, 8.7%. Colorado, almost 6%, and California, almost 6%. There are states that are actually generating construction. That's a sign, of course, of, of domestic net immigration, or population growth in general, and/or the fact that their youth in these states are beginning to buy homes, or they are moving into apartments. This could be multi-family, as well, and we have some things, and you look around the city, and you see some growth areas, but the numbers suggest, just not as fast as the neighbors.
Ted Simons: We see the no income taxes crowd here with Florida and Texas, and 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 and the states and say, here's what Arizona should be doing?
Dennis Hoffman: Ok, so, there is no one fiscal recipe from the state. Colorado. Utah. Both have individual income taxes. Oregon is, is dominated by individual income tax, and they are growing faster than Washington, that has no, no individual income tax. And, and look, taxes on finest of margins matter, but they cannot swap some of these basics, so what's holding us back. I argue our growth, historically, may have been fueled, say, by my generation, attracted by the population growth magnetism of, of an Arizona. It was very attractive over the last three or 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: Arizona, it was almost a cliché, you came out here and you could reinvent yourself and start a new life, are people not seeing Arizona in that light?
Dennis Hoffman: Well, I think it would be unfair for the two of us to start in with the bash of the state, oh, woe is us and we are all down, and I think that there are fewer opportunities, and there is images that, that are being admitted by the state, and some of these are really subtle. I've been here 36 years, and we have always had dust storms in this state. But only, recently, do people take videos of them --
Ted Simons: Of the haboobs.
Dennis Hoffman: And put them out on international media to the people out east that looks like the dust bowl of the 1930s, when, in fact, as you well know, all it does is delay our barbecue by 30 minutes.
Ted Simons: Listen, before you go, we have got 30 seconds left here, and are we looking at, at a new normal? Are we looking at new paradigms here?
Dennis Hoffman: I was unwilling to adopt that premise two years ago, and frankly, my forecasts were wrong. I had us in the Utah, Colorado range right now, 3% job growth and above, and because I could not be convinced that we could not recover here, but, now I'm of the belief I have got to see it before I can believe it, so, what, what we need to do is to develop a strategy to, to market the state, market it on its positive attributes, and there are a ton. We have got a tremendous potential, I think, in this state, and we have also got to market and develop and retain talented young people. We have got to produce them and retain them. In order to retain them, there has to be great job opportunities here, and I fear that we are losing too many.
Ted Simons: It's an interesting study, and google wpcarey.
Dennis Hoffman: And job growth, all one word, and that's probably all you need.
Ted Simons: Good to see you again, and thanks.
Dennis Hoffman:Economist, W.P. Carey School of Business at Arizona State University;
