Arizona is one of the states in which the high-wage end of the employment distribution provides a more favorable impression of its job quality than that based on all employment. Thus, Arizona’s subpar job quality is not due to a scarcity of high-wage jobs, but instead results from lesser job quality in the remainder of the employment distribution. In particular, Arizona has an above-average share of very low-paying jobs that serve tourists and seasonal residents. In turn, the low overall average wage in Arizona — 7 percent less than the U.S. average — primarily results from factors other than job quality. The average wage in Arizona is less than the U.S. average in the vast majority of industries and occupations, both high- and low-paying.

Tourism is one of 12 industry clusters widely considered to be driving the Arizona economy according to the Governor’s Strategic Partnership for Economic Development (GSPED). The term "cluster" refers to a geographic concentration of interdependent companies, suppliers, products, labor pool, and institutions that together constitute an important competitive advantage for a region. In northern Arizona, tourism ranks as the predominant industry cluster. This paper provides a profile of the tourism cluster in Coconino County, with special focus on the Flagstaff area. It examines the cluster’s composition, relative size and importance to the regional economy. It addresses the cluster’s dynamics and requirements for growth. It reviews important national and worldwide trends affecting tourism in Arizona, as well as the special characteristics of gateway communities. And, finally, it presents a menu of actions to choose from for strengthening the cluster in both Flagstaff and Coconino County.