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What’s Holding Back Economic Development in Arizona?
Posted on October 28, 2015 by Michael Bryan | 9 Comments
By Ed Dravo
Year after year, legislative session after legislative session passes without meaningful policies to address our economic problems. Once one of the leading states in economic growth we are now a perennial laggard. By growth I mean rising incomes and not a larger body count. If it’s larger numbers that moves you, Arizona has made the grade; that is until recently. Now more people are leaving the state than entering.
In a story written by Eric Toll for the Phoenix Business Journal two corporations employing over 3000 people earning double existing state wages passed on Arizona (Phoenix, specifically) as a place to relocate. The state made the semi-finals but failed when the selection committee passed their findings to senior management. Toll inquired off the record for the reasons for our being shunted out of the finals. Each company provided a different reason. Company A’s management committee felt uncomfortable moving to a state that re-elects someone like Arpaio (not because they wanted a more diverse culture as whitewashed in an AZ Republic editorial piece). Company B rejected us because management was afraid of raising their children in a place that repeatedly ranked alongside Mississippi and Alabama for public education. A third reason was the difficulty finding employees with training in sophisticated skill sets-read job training.
This was not the only bleak story about the Arizona economy in recent weeks: The paltry amount of venture capital raised is a big concern and NAICS, the organization ranking employment categories, has jettisoned Arizona’s listing as a high tech manufacturing state. That era pretty ended in the 90s when call centers were touted as great catches.
That elephant is named retirees. It’s their refusal to approve funding for things like education and infrastructure improvement. There is a common element that drives all the negative outcomes. It’s all important but invisible, the proverbial elephant in the room. This behavior became apparent long ago when Sun City retirees refused to pass bond issues funding primary schools in their districts, resulting in the need for legislative relief or children would be deprived of an education. This was hardly the concern of people who moved into the district to escape cold winters and financial responsibilities.
The retiree enclaves along the Colorado, Prescott Valley, Fountain Hills, N Scottsdale, westernmost Phoenix, and the I-10 corridor north and south of Tucson represent a formidable voting block. They routinely elect legislators who enliven the monologues of late night hosts for brazen acts of civic indifference if not outright hostility to the general public. According to Bill Hart with the Morrison Institute at ASU, retirees, anyone 65 or over, will increase to 30% or more of the overall population in twenty years. With their committed voting habits that translates to a 60% majority on issues they agree on.
What’s especially harmful about the retiree vote is nearly 40% are from out of state. Their community involvement ended when they severed their roots and moved to Arizona. The lack of community spirit is so weak in Arizona the Flinn Foundation study reveals community giving is twice as a low as the next lowest state in our economic peer group. In other words, out of 10 states if the 9th lowest charitable giving was $50 per person, Arizona gave $25. That’s one those numbers you hate repeating because it reflects on you.
And so does the Arizona Legislature, but on matters economic the state legislature has very little legislative authority in supporting business. The only public body engaged in economic development was the old Commerce Department, now the Arizona Commerce Authority, a quasi public/private organization with no authority. What the State of Arizona can do and doesn’t is provide the framework that businesses want to support their production. Things like an educated workforce, an interesting and reasonably cultured environment. People aren’t machines, they are programmed from their surroundings. Local support for cultural projects is a must in today’s marketplace to attract the talent that manages businesses. Opposition to those efforts undermines economic development.
Local efforts most frequently drive business initiatives and if the voting constituency in a district wants a return to a previous era are they going to sabotage economic advancement going forward. Economic stagnation as being practiced is a developmental strategy only beneficial for the RE industry and medical services
It’s not coincidental that as the elderly have increased as a percentage of Arizona’s overall population, educational attainment, per capita income and high tech employment levels have fallen. Our universities, a significant presence in a state our size, can’t retain graduates, most leave the state for jobs elsewhere while employers claim educational needs for skilled positions are unfilled.
Governor Ducey and other officials angling for higher office will not disappoint the retiree population. They will easily sacrifice the business community, public servants, and the general population because retirees votes are the currency that buys victories. But who wants a business model that thrives on social neglect?
Winter is nearly on us and soon Arctic winds will sweep through the empty plains of the Midwest, pushing the elderly south, continuing to depopulate that region. After two decades of reaping the elderly harvest, for Arizona to maintain the status quo it’s going to be harder and harder with fewer and fewer of the population left after each freeze. Could this be the wake up call to becoming committed to growing actual businesses and not vacationers that overstay their welcome?
Tucson and Phoenix must act as one to push against the political impediment of retirees and their elected reps. Already child services, primary education and the universities have been shortchanged by legislation aimed at shrinking public sponsorship of anything-period.
Phoenix’s retirement problem has been long in the making and is becoming Tucson’s. Seeing retirees as economic assets blindsides planners to the reality that retirees vote with the outlying districts in choking funding for anything that doesn’t prolong life; that’s prolong life, not improve life.
It doesn’t take very much imagination to see how advocating policies restricting retirees could be construed as demonizing parents, the very construct of society. What is possible is for everyone to realize how beggar-thy-neighbor attitudes can choke the lifeblood out of communities, something parents don’t want to happen and will work to ensure it doesn’t. That means advocates for business development not shy away from recognizing the problem and there be leaders who negotiate winning positions for all the parties in building and maintaining communities that have bright futures.
Advancing policies that will increase wages and economic output must start with recognizing political priorities. Where do our elected reps stand on making funding available for educational needs, especially at the university level when it comes to economic development and these reps must be held accountable if they don’t serve the interests of commercial businesses and the general population.
Ed Dravo is the principle of Dravo Financial LLC and former columnist for Financial World magazine. He now resides in Tucson, AZ.
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