Fierce competition for workers is one of the top issues today in Arizona. Many people may be surprised to hear that anything related to the state’s economic situation is on a list of pressing issues. Arizona’s economy is and remains robust, the state is finding it difficult to supply workers in demand by industry. The result is a new but deep threat to our economic future. Businesses’ inability to find and retain the workers they need, where they will need them, may in fact be the spear that unexpectedly pierces the state’s prosperity.

The March 2006 responses to a statewide representative telephone survey show that a majority of Arizonans see science and technology research as a source of high-paying jobs and are every bit as interested in science and technology as leaders are. Arizonans "get" the benefits of a science and technology-based future and the power of science and technology to spawn desirable employment opportunities. Some cautions emerge as well, but even so, most Arizonans look to science and technology as integral to a bright economic future.

The purpose of this brief report is to provide information about Arizona’s system of workforce development, the Workforce Investment Act of 1998 (WIA), how the Act has been implemented in the greater Phoenix area and the program’s relevance to business. It is an update of a previous brief on the subject from February 2000. Prepared by Morrison Institute for Public Policy at the request of Greater Phoenix Leadership, the information contained in this report is intended for a business audience.

With unemployment up, consumer spending down, and governments facing revenue shortfalls, Arizona must become more competitive than ever before. AZ Workforce: Latinos, Youth and the Future, produced as part of the ASU Office of Public Affairs’ César E. Chávez Leadership Lecture, examines the “unfinished business” of Arizona’s workforce. The report notes reasons why the workforce remains a critical issue: A skilled workforce is critical to expanding the state’s economy. Arizonans must have the skills employers need. Arizona ranks 17th on Milken Institute’s State Science and Technology Index overall, but 33rd among states on the Human Capital Index; Demographic shifts have put workforce issues front and center. Aging and minority growth in light of enduring disparities make Arizona’s current workforce a priority; and, Arizona’s employers will have to look harder at homegrown workers. Conservatively speaking, for everyK-12 student another Arizonan needs help with skills. For example, more than 430,000 Arizonans do not speak English well, while more than 600,000 Arizonans did not finish high school. AZ Workforce looks at big picture facts and figures about the state’s 3-million-strong workforce. By 2030, Arizona may have more than 10 million residents. A key part of the big picture is that the generation replacing older workers has less education than today’s mature workforce.

Because of the urgency of workforce issues and the desire to begin a statewide discussion about workforce goals and choices, the Governor’s Council on Workforce Policy wanted to understand if, and how, program governance and organization are hampering progress and what changes might be beneficial. The council asked Morrison Institute for Public Policy (School of Public Affairs, College of Public Programs, Arizona State University) to: (1) Explore the strengths and weaknesses of the organization of Arizona’s workforce system, particularly at the state level (2) Review how other states have revamped their systems and connected workforce and economic development (3) Recommend options for improving Arizona’s system During the second half of 2003, Morrison Institute for Public Policy talked with more than 60 workforce professionals, business people, and workforce board members across Arizona either individually or in small groups, researched other states’ approaches through interviews with officials in other states and national organizations, analyzed responses to an online survey of selected local workforce investment board members, and reviewed a wide variety of materials on economic, workforce, and community development. This report is the first of many steps for Arizona to reflect and act on workforce development governance and its system, because as Thurgood Marshall said, "You can’t stand still. You must move, and if you don’t move, they will run over you."