If you’re having trouble keeping up with the Joneses in other states, you’re not alone. Arizona’s wages aren’t growing like they should, and state legislators might be to blame.
Tuesday, the Arizona Daily Star reported that Arizona’s per capita income grew only 4.8 percent since 2005 to $31,458. That might not seem too bad until you consider the national average – a growth of 5.2 percent to $36,276.
Arizona is one of the fastest-growing states in the country, and low living costs, a growing biotech sector and a warm climate have been responsible for drawing thousands of young workers to the Grand Canyon state. So it’s surely unsettling that our wage growth is lagging behind the national average.
State officials will give plenty of excuses. A spokesman for the Arizona Department of Commerce told the Star that the explosion in “”lower-paying jobs”” like construction and retail jobs have dragged down the income numbers as developers rush to build housing in Arizona.
That might be true, but state officials – from Gov. Janet Napolitano to individual legislators – would do well to take a more forward-looking view. As usual, though, Napolitano is already there, and legislators have to play some catch-up.
It’s conventional wisdom that higher education will produce more robust income growth, and the numbers bear that out. According to a recent report from the U.S. Census Bureau, a person with a bachelor’s degree will earn approximately $1 million more than a person with only a high school diploma.
Taken in that light, it would behoove Arizona to increase its dismal funding for higher education. By bettering retention rates, attracting top-shelf professors and (ultimately) graduating more students, Arizona’s work force will be better educated and better paid, which would bode well for the state’s tax rolls.
Napolitano, for her part, recognizes this need. In her 2008-2009 budget request, the governor asked for a $6.3 million increase to the Arizona Financial Aid Trust and $29.8 million to improve retention and graduation rates. It remains to be seen whether legislators will play along, but if they have any interest in improving wage growth, they should invest in Arizona’s universities.
Of course, the argument for increased higher education funding rests on the assumption that graduating students will remain in Arizona and pay back the state’s investment in the form of productivity and taxes. Sadly, that’s often not the case at any of the three state universities.
While state legislators might put the blame on flighty college graduates, the problem is Arizona itself. In a recent study entitled “”The Young and the Restless in a Knowledge Economy,”” researchers found that between 1990 and 2000, the likelihood that young workers would live in a neighborhood closer to a thriving downtown increased in every one of the nation’s 50 largest metropolitan areas.
With its sprawling suburbs and clogged, snaking highways, Phoenix just doesn’t represent what young workers want. Neither does Tucson, with its lack of a definable “”downtown.””
Napolitano seems to have recognized this trend, writing in a press release yesterday that she “”issued an Executive Order directing the Arizona Department of Transportation to look at transportation alternatives besides freeways,”” something that will likely lead to a more vibrant downtown Phoenix (and a more attractive location for young workers).
Arizona stands at an important crossroad. Napolitano seems to realize it, but it’s time for growth-minded legislators to follow suit.
Opinions Art
Editorials are determined by the Wildcat opinions board and written by one of its members. They are Justyn Dillingham, Allison Hornick, Damion LeeNatali, Stan Molever, Nicole Santa Cruz and Matt Stone.
