Despite the highs and lows of the Arizona job market — mostly caused by the Great Resignation and a pandemic — officials say the state’s economy and workforce pipeline continue to flourish.
“Job growth has been huge. We’ve attracted a number of different companies to the market and so job growth continues moving forward,” said Jennifer Mellor, chief innovation officer for the Greater Phoenix Chamber Foundation, speaking at the Feb. 3 at a State of the Workforce conference hosted by the Chamber Foundation. “Our average median income continues to increase with the diversification of new jobs,” she said, adding that “unfortunately, we still have a fairly significant poverty rate.”
The conference also featured economist Jim Rounds, president of the Rounds Consulting Group, Inc. The duo reviewed the current local labor market, potential skill shortages, and how employers and educators are working together to address a workforce shortfall.
The job market in Arizona had been booming over the past decade, with about 440,000 new jobs generated because of the state’s focus on industry diversification. Because of an emphasis on the leisure sector, real estate and other services, Arizona was hit hard by the recession in 2008. Organizations such as the Arizona Commerce Authority, chambers of commerce and other economic development groups have worked to diversify the job market to recover.
Arizona has seen tremendous growth in industries such as logistics, manufacturing and utilities, which have increased by 88% since the recession. A total of 112,000 jobs have been created just in the healthcare and social-support sectors alone. Real estate is one sector that has fueled the state’s economy, accounting for 15% of national GDP, adding $14 billion over the last few years and creating 9,000 Phoenix jobs.
In Arizona, specifically the metro Phoenix area, advanced business services such as finance and insurance have been rising at a fast pace, with 55,000 new jobs created, according to Mellor.
Within these growing industries, Maricopa County is predicted to add more than 500,000 new jobs over the next 10 years, many of them in the healthcare space, said Mellor. For example, Arizona has 1.5 times the number of outpatient care centers as the rest of the country.
Wages in Maricopa also have grown over the past year. Average annual salaries have risen from around $41,000 to $48,000, while the minimum wage has grown from $8 in 2016 to $12.80 in 2022. Maricopa County’s unemployment rate sits at 2.4%, the lowest it has seen.
COVID-19 was a major factor in individuals quitting their jobs or searching for new career paths; more people are retiring early; nurses have left the field because of burnout; and thousands of others chose to start their own businesses. In August 2021, Hiring Lab conducted a poll to determine why people were not actively looking for work. What they found was a widespread fear of becoming sick, childcare was too expensive, and many people have a working spouse.
“After looking at economic development and economic activity in the state for a lot of years, with its focus on economic reform planning during the Great Recession and during the economic downturn — all the different things that make the economy tick — my biggest concern is workforce. We need to catch up in terms of quality talent,” said Rounds.
Businesses, according to Rounds, must supply more of a quality pipeline of workers rather than just hiring bodies in order to develop quality talent. He also said there must be a return on investment in order to improve quality growth.
“We have to get more aggressive, but we can look out for taxpayers and spend more if we invest in the right places,” Rounds said.
