High growth of low-end jobs forecast for Arizona

That outlook is part of the Arizona Department of Administration’s forecast for 2.2 percent job growth this year, which is slightly better than the 2.1 percent figure Arizona posted for the past three years.

And for 2016, economist Aruna Murthy predicts 2.4 percent job growth statewide.

In both years, the Phoenix metro area, which includes Maricopa and Pinal counties, will get more than its per capita share, adding 95,400 jobs. By contrast, Pima County will have just 12,300 new jobs over the same period, with the other 12,000 jobs spread around the 12 remaining counties.

But the real telling numbers are in where those jobs will be.

The state’s leisure and hospitality industry — largely restaurants and bars — is expected to grow the fastest of all sectors, at 3.9 percent this year and 4.1 percent in 2016.

Murthy, the state’s director of economic analysis, predicts jobs in health care will grow almost equally fast, driven by more people moving here and needing more doctors, nurses, hospitals and the support staff. And that sector of the economy will add 29,900 jobs over the two-year period.

But the bottom line is that it’s those jobs near the bottom of the pay scale that are growing the fastest.

Murthy puts food preparation and service at the top of job growth from 2013 through 2016, adding 7,232 new jobs. That’s followed by customer service representatives, at 6,977. Below them are retail jobs and waiters, with the higher-paying category of registered nurses in fifth place.

Looking at it from another perspective, Murthy figures close to 125,000 of the jobs to be created this year and next will require nothing more than a high school diploma, with almost 59,000 of those not even requiring that.

Overall, she figures that comes out to 71.8 percent of new jobs.

So why go to college?

“People study to make a difference in their life and to get a job which pays more,” Murthy said.

But not necessarily here.

“If those types of jobs are not being created in Arizona, studying will at least allow them to be mobile and get a job elsewhere, where previously they could have found a job locally,” she said.

Murthy said it’s not entirely a bleak forecast for Arizona college grads.

“There are a lot of entry-level positions,” she said. “But once you reach midcareer, there may be limited options.”

And the trend lines are not good.

The leisure and hospitality industry made up just 10.2 of all jobs in 2000.

That figure grew to 10.6 percent of total Arizona employment by 2010 and 11.1 percent last year. And by 2016, 11.4 percent of all jobs in the state will be in that sector.

By contrast, manufacturing, with its higher-paying jobs, was 9.4 percent of the economy in 2000; it now is just 6 percent.

And those trends are reflected in the fact that wages in Arizona are not keeping pace.

Murthy said per-capita income in Arizona was $36,850 in 2007. Now, in inflation-adjusted dollars, the figure is just $34,648.

She said some of that is because Arizona has a higher percentage of both elderly and very young residents than some other states, people who are not in the job market but whose presence affects that per-capita figure. But the high percentage of lower-paying jobs does make a difference.

“There’s a higher share of those jobs in the state of Arizona,” Murthy said. “That’s the reality, unfortunately.”

Until Arizona attracts large new employers with high-paying jobs, the earnings figures are not going to go up, she said.

Daniel Scarpinato, press aide to Gov. Doug Ducey, called Thursday’s report good news.

“The governor is glad to see more job growth,” he said. “Growth in jobs is a good thing, because for too long we saw the opposite.”

Scarpinato did not dispute that the big growth so far has been at the bottom of the pay scale, but said Ducey is doing something about that by “creating the atmosphere” for companies to expand.

To do that, Ducey is pushing a budget that embraces more than $200 million in previously approved tax cuts that have yet to take effect, while increasing state aid to public schools by just $11 million. And he wants to cut $75 million from state universities while asking for more than $50 million for new prisons.