Arizona’s economy, population growth ranked above national average
PHOENIX — Arizona’s economy is doing well, according to prominent economist Dr. Christopher Thornberg.
Thornberg said at the Alliance Bank of Arizona 2018 Economic Forum in Phoenix on Thursday that Arizona’s gross state product grew 3.1 percent from the second quarter of 2016 to the second quarter of 2017.
“Whether you’re looking at employment, income, output — the state’s growing faster than the U.S. overall,” he said.
The U.S. gross domestic product, in comparison, grew 2.8 percent in that same period.
“That’s driven — in part — by good fundamentals on the ground,” Thornberg said. “It’s also driven by the fact that people are moving here.”
From 2016 to 2017, Arizona’s population increased by 1.6 percent — the nation’s growth was 0.7 percent.
In fact, Arizona was the 9th-fastest growing state in that period.
Thornberg said that growth is a good thing — to a point.
“The bulk of people moving to Arizona are 55-plus,” he said. “Compare that to a place like Colorado, which also has massive imports of people. But, that group is 25 to 40.
“(The 55-plus people are) going to retire. And, if you’re thinking about…Arizona in the next 15 years, then, you start to worry, because the millennials are the managers in 20 years.”
Thornberg said appealing to millennials can be a strong growth point for Arizona.
“Why aren’t we viewed as a great place for millennials? I don’t think Denver is that much more interesting than Phoenix. It’s beautiful here — lots of things to do, great outdoor activities.”
Another issue that kept coming up, Thornberg said, was the shrinking U.S. labor pool, which is due, in part, to smaller family sizes starting with Baby Boomers.
“Every time one person retires, you’re only bringing in one person,” he said. “You just don’t have the potential growth in the labor force necessary to feed the growing economy.”
In fact, he said, southwest agriculture and construction companies were in deep trouble because they cannot find enough qualified and skilled workers.
Undocumented immigrants – who provided cheap labor in the southwest and California farms for years – are shying away from going to work, thanks to the political climate in Washington, D.C.
As a result, Thornberg said, farms were having a lot of trouble executing daily practices, like harvesting produce.
“So, how do you fill those jobs?” he said. “One: Raise retirement ages. Or, two: Increase immigration. Of course, the (national) conversation is the complete opposite: They want to shrink immigration.
“That conversation is couched in this idea that we need less family-based and more skills-based (immigration). But that debate’s not even part of the question. The question is: Do we need a million people or two million per year? The answer is 2 million, rather than 1 million.
“And (the federal government wants) to go 1 million to half a million. We’re moving in the wrong direction.”
The bottom line?
“Arizona is doing great,” Thornberg said.
“The broader questions that face Arizona are the same questions that face the entire United States: What are we going to do about the lack of workers? What are we going to do about Boomers retiring – and the stress that will put on the federal budget? What are we going to do about rising healthcare costs?
“There are so many big issues that we need to deal with as a nation…instead of debating this, we’re instead transfixed by the day-to-day soap opera that is called the Trump administration.
“We cannot allow ourselves to be distracted; we have to focus on the bigger picture.”