Arizona's Secret Growth Industry

Last week, the U.S. Department of Labor released employment data for all 50 states. Arizona has done reasonably well since March 2011, adding 47,000 non-farm jobs. That’s a growth rate of around 2 percent and puts Arizona among the top 10 states.

The Arizona Republic mentioned these numbers in their annual employment survey of the largest companies in the state and concluded that large employers were helping lead the state into a recovery. The Arizona Department of Administration reported that the biggest absolute job gain was in the leisure and hospitality industry (10,700 new jobs).

But digging deeper into the employment data reveals that Wal-Mart and tourism aren’t the state’s real growth industries.

In percentage terms, the fastest-growing industry was specialty contractors. Tied for second place were the securities and commodities industry and the state public education system, which includes the state universities.

Top Five Industries by Employment Growth

Source: Author’s calculations based on data from U.S. Department of Labor

It’s worth noting that the biggest employer in the state is not Wal-Mart, as the Arizona Republic concludes. The biggest employer in Arizona is the government.

State government as a whole has more than twice as many employees as Wal-Mart in Arizona, and total state and local public education employees outnumber Wal-Mart employees by more than 6 to 1.

The growth in the ranks of public education employees means more resources go to government. Unfortunately, there has been little in the way of an honest appraisal of whether those additional resources will add more value for taxpayers or students. In the meantime, policymakers should recognize that until we have real limits on the growth of government, government will continue to compete with private industries for the title of “top growth industry.”

Learn more:

Arizona Department of Administration: Job Gains Across All Sectors (PDF)

Arizona Republic: Arizona’s Big Companies Boost Jobs Recovery