The quality of jobs in the United States became a national concern in the 1980s after a long period of losses of relatively high-paying manufacturing jobs and gains of frequently low-paying service jobs. National job quality remains a concern today, as witnessed by the debate in the 2004 presidential campaign. The overall average wage is a measure of prosperity or well-being, but is not in itself a measure of job quality since job quality is just one of several factors — including cost of living, productivity, and desirability of an area — that affect the overall average wage. Little information on these factors is available by state. Adjusting for job quality reduces the state-by-state variation in wages. However, even after adjusting for job quality, the average wage still varies substantially by state.

The long-term trend toward lower-quality jobs in the United States continued between 2001 and 2004. Industrial job quality fell 1.6 percent nationally between 2001 and 2004. The decrease in occupational job quality was not quite as great at 0.9 percent. Thus, overall U.S. job quality dropped 2.5 percent during the three years, causing the U.S. average wage to be 2.5 percent less than it otherwise would have been. Arizona’s job quality fell between 2001 and 2004 at a pace worse than the national average. Relative to the national average, the industrial and occupational job mixes each slipped a bit more than 0.3 percent during the three years, for an overall decline of 0.7 percent. In Arizona, job quality in 2004 was 2.0 percent below the national average, but Arizona ranked 23rd among all states.

Available data on the cost of living indicate that living costs in Arizona are close to the national average — thus, the state’s lower-than-average wages are not offset by low living costs. No productivity data exist for Arizona. Worker productivity in Arizona could be below the national average due to lesser investments in physical or human capital, which would result in lower wages. Labor market supply and demand factors are a likely cause of the low wages in Arizona. A substantial number of people seem willing to move to Arizona and accept a substandard wage in exchange for perceived qualitative advantages to living in Arizona, primarily climate.

The best way to evaluate job quality would be to analyze a dataset that presents both occupational and industrial data, but the only dataset of this nature available by state comes from the decennial census. It is severely limited by small sample size, the latest data are for 1999, and the 1999 data are not consistent with the 1989 data. Thus, the initial work by the Seidman Institute on job quality ("Job Quality in Arizona," March 2005) presented data on Arizona job quality from several sources of either industrial or occupational data. "Job Quality in Arizona Compared to All States" (June 2005), is an extension of the March 2005 report. Arizona’s job quality in the latest year and its change over time is compared to the national
average and is ranked among the 51 “states” (including the District of Columbia).

The research for this report was conducted in two phases. The first phase analyzed the change in national job quality using multiple datasets, going back as far as 1970. In addition, the level and change in job quality was estimated for one state (Arizona). Some inconsistencies in the measurement of job quality exist across datasets. Complete results of this analysis, with a strong focus on Arizona data, are available in the report "Job Quality in Arizona". The second phase analyzed data for all states but was limited to two datasets, one presenting industrial data, the other occupational data. Because of the limited availability of state data by occupation, the time period analyzed was restricted to the years 2000 and 2003. The level of job quality in 2003 and the change between 2000 and 2003 are presented. The findings of the second phase, initially reported in "Job Quality in Arizona Compared to All States", are included in the current report, excluding detail provided for Arizona in the original report. Additional national and regional analyses are included in the current report.

The best way to evaluate job quality would be to analyze a dataset that presents both occupational and industrial data, but the only dataset of this nature available by state comes from the decennial census. It is severely limited by small sample size, the latest data are for 1999, and the 1999 data are not consistent with the 1989 data. Thus, the initial work by the Seidman Institute on job quality ("Job Quality in Arizona", March 2005, presented data on Arizona job quality from several sources of either industrial or occupational data. "Job Quality in Arizona Compared to All States" is an extension of the March 2005 report. Arizona’s job quality in the latest year and its change over time is compared to the national average and is ranked among the 51 “states” (including the District of Columbia).

Raising Arizona was the challenge of the 20th century. Sustaining Arizona is now the challenge of the 21st. A crucial part of that task is not just understanding today’s knowledge economy, but mastering it.
If the state makes this fundamental transition, the brief history of Arizona’s future will read simply: They succeeded in the second stage. Human capital took its rightful place as a chief component of competitiveness. As a result, the story will go, Arizona moved into the top ranks of economic leadership after years in the second tier. Equity and prosperity resulted too. Most important, the state was ready for the next stage of competition. This happy ending for Arizona, of course, has been envisioned repeatedly over time. And in fact, a variety of human capital policies and programs to achieve it are in place. However, many would say that human capital is an area of unfinished business for Arizona. The Arizona Minority Education Policy Analysis Center (AMEPAC) developed "To Learn and Earn" to highlight the issues and asked Morrison Institute for Public Policy at Arizona State University to support the effort with research and analysis. In turn, AMEPAC will present the issues to Arizona stakeholders for their feedback. This process will kick off a multi-partner series of policy action projects. The first results will be presented in November 2009 at the next human capital conference presented by the Arizona Commission for Postsecondary Education.

This research study clearly articulates the critical need for industry to work in conjunction with educators in order to develop an emphasis on STEM (Science, Technology, Engineering and Math) in our schools systems. This partnership is essential for creating a competitive global workforce in Arizona. Aggressive action must be taken now, to fuel the growth of our economy with a properly educated workforce that will improve our standard of living. Changing our culture to celebrate innovation requires a comprehensive plan and collaboration between business, academia and our government. We have an obligation to our children and our country to support this initiative with our time, funds and energy.