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.

Per capita earnings in Arizona has been lower than the national average for decades. The 2011 differential of 19 percent is the largest on record; the typical differential has been between 10 and 15 percent. Thus, for residents who have spent some or all of their working life in the state, the state’s historically low per capita earnings help to explain the state’s below-average per capita property income.