M.B.A. Veteran Business and Economics teacher at a number of community colleges and in the for profit sector.
The Big Picture
Arizona has a population of 6.9 million, which makes it the 14th most populous state in the union. Arizona's gross domestic product (GDP) of $303 billion is larger than some major countries, like New Zeland. But Arizona's GDP only ranks 21st among the states, making it a bit of an underachiever given its population rank. This becomes more noticeable in the personal income data. The per capita personal income in Arizona is only $40,243, compared to $49,571 in the U.S. as a whole, putting Arizona in 42nd place among the 50 states.
Let's recap these figures (and some others) in a table. Data is for year-end 2016, except for the unemployment rate, which is for June 2017:
|Per capita income||$40,243||42|
There are many reasons why that per capita income figure is so low. Many Arizonans work in retail and home health care, which are occupations that do not pay well. The other is just plain demographics. Arizona is a mecca for retirees from other parts of the country, so it has a higher percentage of residents over the age of 65 than in the rest of the U.S. It also has a higher percentage under the age of 18. Both of those groups are below average when it comes to income.
The good news is that in 2016 Arizona added jobs at a faster rate than the U.S. as a whole. That is a trend that can pick up the state's low ranking in the unemployment rate. Let's take a closer look at the industries that provide the jobs for Arizonans.
Where Arizonans Work
Here is a table showing the top sectors for non-farm jobs in Arizona. Data is for year-end 2016:
|Sector||Number Employed (in thousands)||% Growth in Jobs|
|Trade Transportation and Utilities||519.6||1.7|
|Education and Health care||417.3||2.7|
|Professional and Business services||416.7||2.6|
|Leisure and Hospitality||319.2||5.0|
Let's look at these in greater detail.
Trade, Transportation, and Utilities
This sector covers retailing jobs, which are traditionally low in both pay and benefits. The largest private employer in Arizona is Wal-Mart! This sector has a low rate of job growth as all brick and mortar retailers are under siege as Americans increasingly embrace online shopping.
This sector also includes some bright spots, especially solar power! With over 300 bright and sunny days a year and favorable tax treatment, Arizona leads the nation in solar power related jobs per capita. This can help offset some of the jobs lost as retailers cut back operations.
Education and Health Care
With a high percentage of seniors in the population mix, you can expect health care to continue as a leading provider of jobs in Arizona. Arizona also has a vibrant educational sector featuring the University of Arizona, Arizona State University, and the University of Phoenix. Many of those under-18's will need a place to go to college, and they shouldn't have to leave the state to find one!
Professional and Business Services.
This is a broad sector that includes many good paying occupations. It includes independent professionals like lawyers, accountants, and architects. It also includes business managers and supervisors, as well as people supporting businesses through research and development, marketing, and human resources.
This sector also provides the infrastructure needed by the business community. A growing piece of this sector in Arizona is data centers. Servers for computing like dry weather and companies building server farms find plenty of dry in Arizona since the climate is so arid.
The government sector in Arizona includes more than just state and local government areas with low job growth. The military has a major presence here with all branches of service represented (except the Navy). The interesting and fun part is that the wide open spaces in Arizona make it appealing for testing out new military technology. The Marine Corps Air Station in Yuma is a testing center for new military aircraft. The world's largest unmanned aircraft testing center is located at Ft. Huachuca and it supports more than 20 programs of instruction. Arizona's wide open spaces are also useful for munitions and weapons testing by the U.S. Army.
Leisure and Hospitality
While this sector doesn't create many high paying jobs, it does create a lot of jobs. Millions of people from around the world come to vacation in Arizona each year. A warm and dry climate year round is a big reason, but so is the Grand Canyon, an attraction that draws tourists from around the world.
Agriculture and Mining
While the traditional industries of agriculture and mining don't produce the number of jobs they used to, they do make a significant contribution to the state and to the nation. Arizona ranks 2nd in the production of head lettuce, cauliflower, and broccoli. 90% of the green leafy vegetables that appear in your grocery store during the winter months come from Arizona!
There are 27 major mines in Arizona providing direct mining jobs that pay in excess of $100,000 per year. The major mineral is copper and Arizona provides 65% of all copper mined in the U.S.
Overall, Arizona ranks 21st among the states in gross domestic product (GDP). Major job sectors include trade, transportation, and utilities, which feature a large number of retail jobs. Wal-Mart is the leading private employer in the state. Education, health care, and business services are other employment leaders. The government sector features a number of military installations that perform aircraft and weapons testing. Tourist attractions thrive in the year-round warm climate and the Grand Canyon is located in the state. This makes the leisure and hospitality industry an important job provider in Arizona. Traditional industries like agriculture and mining allow Arizona to be a national leader in the production of green, leafy vegetables and copper.
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