The state’s jobless rate is finally moving in the right direction. But the jobs coming back aren’t necessarily the high-paying ones the state lost.
New figures Thursday from the state Department of Administration put the state’s seasonally adjusted unemployment rate for October at 6.1 percent. That’s down two-tenths of a point from the prior month. It also follows four months of reports where the jobless rate rose.
But economist Jim Rounds said the job growth is not across-the-board.
“We are not getting to the point in this expansion where we’re going to start to transition into all the high-wage jobs that you would normally do when you’re this many years into an expansion,” said Rounds, a private economist who reviewed the state’s data. So we’re adding jobs at a moderate pace. And we’re adding jobs that are only with moderate wages.”
Total employment is up by more than 60,000 year over year, a 2.3 percent growth rate. But there are fewer people working in manufacturing now than a year earlier.
“I don’t think the economy is set up where we’re going to be getting those jobs back any time in the near future,” Rounds said. “And we may never get all the jobs back that we lost in manufacturing.”
Of particular note is that employment in the manufacture of computers and electronic parts is more than 5 percent lower now than last year, with the state shedding 1,900 jobs in that sector. He said that reflects a change in the Arizona economy.
“A disproportionate percentage of its jobs were in high tech industries,” he said, dominated by companies such as Motorola and Intel. “We didn’t produce a lot of little, value-added stuff. It was all the high-value electronics.”
But no more.
“We should have transitioned from semiconductor manufacturing and some of the stuff that was high tech 20 years ago but now can be outsourced pretty cheaply,” he said. “We didn’t get into that next level like some other states may have, like Colorado and others.”
Rounds said the future of Arizona manufacturing will be finding the kind of high tech jobs and products that can’t be made cheaper in China.
Elsewhere in the economy there was strong growth in private educational services, as well as in jobs in the state’s finance sector.
But construction employment gained just 100 jobs and still remains at half of what it was before the recession. Paul Shannon, director of the state’s labor market division, said he doesn’t foresee big change any time soon.
“Construction’s not coming back the way it was then,” he said. But that’s not necessarily a bad thing, he said.
At construction’s peak, nearly one job out of every 10 in this state was in the building sector, all part of the housing bubble that burst.
“I’m not sure it’s desirable for it to come back the way it was then,” Shannon said. Now, construction employment is just 5 percent of the state workforce.