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.

Does H20 = Growth in Arizona? That is how many people view the water-growth equation -- any introduction of "new" water supplies inevitably stimulates population growth and economic activity. However, the report by Morrison Institute for Public Policy, Growth on the Coconino Plateau, offers some surprisingly contrary conclusions. Completed on behalf of Arizona Department of Water Resources and the Coconino Plateau Watershed, this document is relevant for all regions of rural Arizona. Among the findings: - Some rural areas in the West have constructed major water supply projects only to see most of their towns languish, not prosper. - New water infrastructure in growing rural counties hasn't affected the size so much as the pattern of new development. - Leapfrog sprawl into unincorporated areas has been discouraged in regions where cities and towns hold control over the distribution of new water supplies. Bottom line, water won't automatically produce population growth. But planning for water - how it is supplied and governed - does offer a useful tool for managing future growth. Moreover, it can provide some measure of protection for the environment. We believe this report has important application well beyond northern Arizona. By providing original research and analysis on the water-growth equation, this report helps resolve one of Arizona's most critical issues. As a result, public policy discussions in the future will be able to focus on the state's most important growth drivers and how they can be managed.