Working Families in The Valley of the Sun: March 2009

This report comes at a time of great flux in our local and national economy. The challenges that we face now hit working families when they are already vulnerable.

This report documents the growth we have experienced in Phoenix, the negative consequences of growth in low‐wage industries, and what tools we have at our disposal to foster positive economic development. While new residents have flocked to the region to soak up the sun and enjoy the beauty of the mountains, the cost of living has gone up, and our local economy has become dependent on development.

In this report, we focus on job quality, asking what kinds of jobs have been created in the midst of Phoenix’s phenomenal growth, and what is the impact of job quality on the long‐term sustainability of our regional economy?

New data reviewed in this report suggests that Phoenix’s economic growth is concentrated in low‐wage industries that fail to provide family‐supporting wages and benefits, leaving them especially vulnerable as the economy has foundered. Families of workers in these industries face multiple hurdles to self‐sufficiency. Wages did not keep up with the rising housing costs of much of the last eight years; many who were successful in purchasing their home now are in danger of losing them to foreclosure. Additionally, many employers in typically low‐wage industries fail to provide health insurance for their workers. Low‐wage workers and their families must choose to go without health care, pay exorbitant premiums out of their own paychecks, rely on public programs, or risk losing their homes. In any case, the costs to the taxpaying public are significant. Phoenix’s over‐dependence on growth as the fuel for our local economy has leb many unemployed, or in danger of losing their jobs, as the real estate market has contracted.

The current economic crisis that Phoenix has found itself in presents local leaders with an opportunity to institute bold new strategies to ensure that we build our region in a different way post‐recession. Oben discussions of development create false choices between uncontrolled growth and no growth at all. Instead, local leaders and residents have an exciting opportunity to implement development policies that generate growth to serve the community we want to build. Other communities have faced these same challenges, using local government to mold and shape economic development to deliver better returns for local residents. They focus growth in industries that tend to provide higher‐quality jobs and establish minimum development standards that ensure development contributes to raising the quality of life for everyone.

Phoenix finds itself at a crossroads; are we prepared to make fundamental changes to how we grow, or are we going to commit the same mistakes that lead us to where we are now? The conclusion of this report presents recommendations to make the most of the opportunities ahead.