Leaders Worry too Much about Arizona's Growth

Posted on May 31, 2002 | Type: In the News
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Arizona's corporate and political leaders may be worrying needlessly about the relationship between the state's rapid growth and its economic future.

 

That's because the state's continued growth over the past decade is evidence that business opportunities and a desirable quality of life are readily available, said Robert Franciosi, director of Urban Growth and Economic Development Studies at the Goldwater Institute.

 

"We're still a young growing state, and it's a mistake to think that we're in any sort of crisis and that we need a ramping-up of government programs to take us out of the situation we're in," Franciosi said.

 

In a new report the institute is releasing in early June, Franciosi said he finds "very little evidence to suggest that Arizona's growth has been bad for the economic health of the state." He bases his conclusion on several factors:

 

  • Arizona exceeds the nation in the growth rate of residents with college and advanced degrees. In 1990, the total was more than 624,000. By 2000, that total had increased to more than 936,000, based on new federal census reports.
  • Arizona's economy is not overly unbalanced compared to the rest of the nation, even though the construction industry's output is larger in Arizona than in the nation as a whole, and manufacturing's share is smaller.

Census reports show Arizona grew by nearly 1.5 million resident from 1990, when it had more than 3.6 million residents, to more than 5.1 million in 2000. That is a growth rate of 40 percent.

 

Franciosi said his other conclusions warrant further study. For example, Arizona exceeds the nation in the growth rate of residents without a high school diploma. What is unknown is whether this is because of the education system, the labor market, or the state's proximity to Mexico.

 

In 1990, Arizona had about 491,000 residents without a high school diploma. By 2000, that number had increased to nearly 587,000. Although the numbers are large, the 20 percent increase over 10 years is about half the region's 40 percent population growth, which could be interpreted as a positive sign, Franciosi said.

 

He said he expected the number to have dropped, as it has in many states. Increases in high-school dropouts between 1999 and 2000 were found in Arizona, California, Colorado, Nevada, Texas, Alaska and New Mexico.

 

A finding that Franciosi said isn't surprising is Arizona's per-capita personal income, which-at $24,911-is 89 percent of the national average.

 

"People are willing to be paid less to come to work in a place where it doesn't snow," he said. "For some reason, people just don't like cold winters."

 

Franciosi added that he hopes his report will spark debate and more research into the findings.

 

"I'd like to go on and solve some of the questions it raises, like what affects the type of people who come here, and why do we have this increase in people without high school degrees," he said.

 

Other research could focus on how the economy of Arizona's rural areas, which are dependent on tourism, agriculture, mining or government, could be made more diversified. One suggestion is to promote Internet-based employment.

 

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