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Arizona not deficient in high-wage jobs


July 20, 2006

The proportion of high-wage jobs in Arizona is nearly identical to the national average, according to an analysis of federal government employment data by the Center for Competitiveness and Prosperity Research, a unit of the W. P. Carey School of Business at ASU. Approximately 15 percent of all jobs in the United States pay high wages, defined as at least 50 percent more than the overall average wage.

“In only 16 states was the proportion of high-wage jobs in 2004 higher than the national average, but several highly populous states were in this group,” says Tom R. Rex, associate director of the Center. “The highest proportions largely were in states along the Atlantic Coast from Massachusetts to Virginia, but California, Colorado and Minnesota also were among the top 10. Arizona ranked 17th — in the middle of a group of ‘competitor' states, but near the bottom of a group of ‘new economy' states.

“Arizona is one of the states in which the high-wage end of the employment distribution provides a more favorable impression of its job quality than that based on all employment,” Rex adds. “Thus, Arizona's subpar job quality is not due to a scarcity of high-wage jobs, but instead results from lesser job quality in the remainder of the employment distribution.”

In particular, Arizona has an above-average share of very low-paying jobs that serve tourists and seasonal residents. It also has a high proportion of workers employed by temporary help agencies, most of whom earn below-average wages. In contrast, the state has a below-average share of moderately well-paying manufacturing jobs.

“The low overall average wage in Arizona primarily results from factors other than job quality,” Rex says. “The average wage in Arizona is less than the U.S. average in the vast majority of industries and occupations, both high- and low-paying.”

Rex says that most of the industries and occupations that pay high wages could be considered to be part of the knowledge economy. Science and technology are significant features in close to half of the high-wage jobs.

Nationally, high-wage jobs are highly concentrated in a minority of industrial sectors, especially in the professional, scientific and technical services sector. By occupational group, many high-wage jobs are in the management group. The industries with the greatest number of high-wage jobs are offices of physicians, corporate and regional managing offices, and offices of lawyers. The occupations with the most high-wage employment are general and operations managers and accountants and auditors.

Among the high-wage industries, semiconductor manufacturing is by far the largest in Arizona relative to the U.S. average. Other high-paying industries that are relatively large in Arizona include manufacturing of search and navigation instruments, manufacturing of aircraft engines, wholesale trade of electronics goods, management consulting, real estate credit, credit card issuing, and land subdivision. In contrast, Arizona has relatively little employment in corporate and regional managing offices, research and development, offices of lawyers, and health insurance carriers.

By high-wage occupation, Arizona has relatively many working as wholesale trade representatives for scientific and technical products, electrical engineers, electronics engineers, and management analysts. Relatively few work as general and operations managers and computer systems analysts.

Nationally, the number of high-wage jobs decreased between 2001 and 2004, while the number of other jobs increased slightly. However, the average wage of high-wage positions rose more between 2001 and 2004 than the average of other jobs.

In Arizona, the high-wage share of total employment fell slightly more between 2001 and 2004 than the U.S. average. However, the average wage of these high-wage jobs rose a little more in Arizona than nationally.

W. P. CAREY SCHOOL OF BUSINESS

The Center for Business Research is part of the L. William Seidman Research Institute in the W. P. Carey School of Business at Arizona State University. The Seidman Institute is an affiliation of six research centers that serves as a link between the local, state, national and international business communities and the creative and intellectual resources of the nationally ranked W. P. Carey School of Business. For more information, please visit wpcarey.asu.edu < http://www.wpcarey.asu.edu > .