DECADES ARIZONA INDICATORS WHAT THE TRENDS TELL US Economy DECADES VOLUME 1 / ISSUE 3 JANUARY 2010 arizonaindicators.org Prosperity Trends By Tom Rex Associate Director, Center for Competitiveness and Prosperity Research W. P. Carey School of Business Arizona State University Q: What were the most interesting and important trends in Arizona’s economy that occurred in the previous decade? What is the significance of these trends and what insights can we apply to the new decade? A: The biggest economic trend in Arizona over the last decade has been the flat line on various measures of prosperity relative to the national average. Arizona always has been below the national average on measures such as the average wage, earnings per employee, and per capita personal income. However, Arizona compares less favorably now than it did in the 1970s and early 1980s. From the mid-1980s into the early 1990s, the prosperity of Arizonans fell considerably versus the rest of the nation. During the 1990s, Arizonans regained a bit of the ground lost, but since then have made no further progress. Incomes in Arizona are particularly far below the national average, and the poverty rate is consistently higher than average. Many factors contribute to the low incomes, with subpar job quality and low workforce participation rates—even among the prime working-age population—among the major factors. Ultimately, economic development is about prosperity. Aggregate growth, at which Arizona typically is among the national leaders, does nothing to improve the economic well-being of Arizona residents. To realize advances in living standards, Arizona must improve the quality of its workforce, then create higher-quality jobs. Many Arizonans have limited educational attainments and workforce skills, which leave them at a competitive disadvantage when looking for a job. Earnings Per Employee in Arizona as a Percentage of the National Average Last Updated: 9/21/2010 95% 90% Source: U. S. Department of Commerce, Bureau of Economic Analysis 08 06 20 04 20 02 20 00 20 98 20 96 19 94 19 92 19 90 19 88 19 86 19 84 19 82 19 80 19 78 19 76 19 74 19 19 19 19 80% 72 85% 70 Percentage of the National Average 100% Arizona Indicators is an online information resource and analysis tool that centralizes data about the state and its communities. Arizona Indicators presents interactive visualizations, clear data descriptions, and public opinion data in a broad range of content areas. This project is made possible by generous support from the Arizona Community Foundation and Arizona State University. For more information, contact Andrea Whitsett at (602) 496-0217 or andrea.whitsett@asu.edu. Arizona Indicators is a project of Morrison Institute for Public Policy. 411 N Central Ave Suite 900 Phoenix, Arizona 85004-0692 (602) 496-0900 Main (602) 496-0964 Fax MorrisonInstitute.asu.edu