Horizon, Host: Ted Simons

February 26, 2009


Host: Ted Simons

Arizona Jobs Report

  |   Video
  • Arizona Department of Commerce economist Dennis Doby talks about the unemployment figures for January.
Guests:
  • Dennis Doby - Economist, Arizona Department of Commerce
Category: Business/Economy

View Transcript
Ted Simons
>> Good evening and welcome to "Horizon." I’m Ted Simons. the Arizona department of commerce is out with new jobless numbers from January for the state. the new unemployment number is 7%, up from 6.6% in December. January saw the largest losses in trade, transportation and utilities. I’ll talk to the economist who releases those numbers for the state, but first, Mike Sauceda tells us about services available for the unemployed.

Mike Sauceda
>> After years of virtual full employment, the layoffs have hit hard in Arizona. Janelle Powell was one of those who recently lost her job and has been out of work for two months. But she is getting help polishing up her interviewing skills and her resume at the Maricopa work force connections Gilbert one stop career center which she says has boosted her confidence.

Janelle Powell
>> when I first stepped in here I said I’m going to go find a job and I’m ok. when I stepped into the first course, I said I better not go an interview , I’m going to make a fool of myself. but now after going through the center's courses and workshops and job fairs, I’ve practiced a lot and they even give you a course on interviewing techniques and I feel more comfortable and more job ready to go out there. if I was called today and had an interview tonight, I would feel more prepared than I was a couple weeks ago.

Mike Sauceda
>> Patrick Burkhart works in work force development for Maricopa county he talks about what the center has to offer.

Patrick Burkhart
>> helping individual, job seekers understand what their aptitudes are. these are all free services by the way. federal dollars pay for these services. help people understand what their skills are and interests are and where they're best suited to compete.

Patrick Burkhart
>> there really are two levels of training that we offer training in the centers themselves and offer things such as resume reviews and how to prepare the resume and how to apply online. and how to understand the job market. those kinds of soft skill training we do right here on-site. we also have training dollars available and we'll have much more in that regard when the stimulus money comes to Arizona. to actually support people to go to community colleges for certificate programs or to private providers for specific training skills or to enroll in apprenticeship programs. those are the kinds of technical skills, job skills, workforce skill opportunities that we offer.

Mike Sauceda
>> Burkhart says if you think you're going to get laid off, get ready.



Patrick Burkhart
>> people should realize they need a plan in advance if they're suspecting or fearful they may be losing their positions. we want to begin to work with them as soon as possible and they should come here to the career center even before they're laid off so that they have a plan in place. so they're not waiting until the last minute. not waiting until the pink slip arrives but they're searching for new positions knowing that their position is vulnerable.

Mike Sauceda
>> Burkhart says the number of clients have gone up. The Gilbert center is seeing up to 1,000 people a day. The number for unemployment claims have also gone up but there could be good news around the corner.

Pat Harrington
>> the highest we have seen is 13,500 claims in a week. just to put that into context, in December of 2007, January of 2008, we were at about 3,500 or 4,000 claims per week. so that 13,000 number is three times what we are used to seeing in normal times. we've seen those sort of level off here over the last couple of months. keeping my fingers crossed that that turns out to be the case. because if that's true, then it should give us an opportunity to try and catch up and be more timely on the claims that we've received.

Mike Sauceda
>> the department of economic security has hired more people to deal with the flood of unemployment claims but some claims are still taking a lot of time.

Pat Harrington
>> we've done well in terms of hiring staff. we've increased our staff pretty dramatically, more than 100% in the unemployment insurance benefits program over May of last year. so about seven months, we are up from 106 to well over 200 now. and adding even more. over all if you look at all of our claims, we're able to do just less than half within about 30 days and that's our expectation, which means just over half are not being produced during that expected period of time. and they take either, you know, four weeks or five weeks or six weeks or perhaps longer.

Mike Sauceda
>> for those living off unemployment and looking for a job, there's help like the unemployment center in Gilbert. They are there to help people like Alan Torgerson who was in sales and marketing before the economy turned bad.

Alan Torgerson
>> I would say its just the way that the resumes are different today and the way that companies look at resumes and the things they look for in a resume are a lot different from what they were back the first time I was looking for a job and what I’ve learned here is how to structure those things so they can meet the demands of the marketplace today. I think it’s always a challenge and you have to make sure that you’re always feeding yourself with the right information at the right time and it's easy to get down on yourself, so what you've got to be able to do is go someplace where you can get positive feedback to keep you going. this is a great source for doing that, absolutely.

Ted Simons
>> here now to give us the lowdown on Arizona’s new jobless figures is Dennis Doby, an economist with the Arizona department of commerce. good to have you on the show. thanks for joining us.


Dennis Doby
>> thanks for inviting me.

Ted Simons
>> biggest 12-month job loss in Arizona history, huh?

Dennis Doby
>> in numerical terms but in not percentage terms . but the 155,400 jobs lost over the year was the largest we've seen.

Ted Simons
>> and we're at 7% right now. does that 7% number surprise you a little bit?

Dennis Doby
>> the 7% is a little surprising. but when you look at the numbers, one of the things you have to look at is it counts those actively looking for work and doesn't count discouraged workers or marginally attached workers. if those were counted the number would be significantly higher than the officially seasonally adjusted rate.

Ted Simons
>> and I want to get to, in a second, how these numbers are calculated exactly but back to the raw figures. construction, obviously the hardest hit?

Dennis Doby
>> yes, it's been down for over two years and its still continuing to decline, 17 months of over the month declines, two years of over the year losses.

Ted Simons
>> 17 months, straight months?

Dennis Doby
>> yes.

Ted Simons
>> retail down as well?

Dennis Doby
>> retail have been significantly impacted in the last four to five months and it is one of the industries showing the greater and over the month and over the year losses.

Ted Simons
>> I know in January you often see retail slow a bit because of the post-holiday situation. Worse even than usual?

Dennis Doby
>> Yes what we’re seeing in January, is the normal seasonal losses, coupled with the cyclical losses which shows greater numbers. Over the month we lost $74,400, that’s the largest number we've lost in December to January in -- for as long as we track the numbers.

Ted Simons
>> oh gosh, professional and business services look like they were hit hard as well?


Dennis Doby
>> a lot of that is employment agencies, that includes the temporary help agencies and there's seasonal declines there as well but the economy is just sour right now.

Ted Simons
>> restaurants, I know that tourism is usually strong here in Arizona, even when recession time comes around. how are we looking with tourism, restaurants, these things?

Dennis Doby
>> leisure and hospitality is one of the industries that held up for quite a long period of time. Up until recently the last three to four months, when things seemed to have fallen apart, in Arizona and nationally, leisure and hospitality got hit and their showing both over the months and over the year losses now.

Ted Simons
>> is there anything out there that-- I’m not going to ask for job gains, but anything not lose a whole lot?

Dennis Doby
>> well, if you look at December to January, there was no published sector that gained jobs and there were three that were flat and those were air transportation, aerospace and utilities.

Ted Simons
>> all right. so there is something we can look at that and say, at least they're doing ok.

Dennis Doby
>> and they're still over the year growth in health services employment.

Ted Simons
>> there we go, all right. I want to get to how these numbers are calculated, because again 6.9 was revised down to 6.6 for December and its now 7%. there's some folks who say we can go much higher. how do you know who is looking for work and who's employed and who's not?

Dennis Doby
>> the official unemployment rate is based on what we call the current population survey, its a survey of households conducted by the members of the bureau of census. they go to the household and do an interview and then follow-ups over the phone. they're in for four months, out for eight, and then in for four and then move on to a new group. and those numbers from the household -- the survey of about 60,000 nationwide, about a thousand in Arizona -- those represent the numbers that we provide on a monthly basis.

Ted Simons
>> so 1,000 households in Arizona provide the numbers, that could make for some volatile numbers.

Dennis Doby
>> on a monthly basis, it can be fairly volatile and it can swing around a lot. That’s why we do our annual benchmarking process. which is why we don't have the substate numbers yet but they'll be released on a flow rate as the benchmarking is complete and it's designed to be accurate on an annual average basis. the monthly numbers have significant volatility when they're preliminarily released numbers .

Ted Simons
>> say a man is a handyman and has a job for the next three days, is he counted as employed?

Dennis Doby
>> as long as they answer they're employed during the reference week, which the week of the twelfth then yes they are considered employwed.

Ted Simons
>> and even full time, part time, doesn’t’ matter?

Dennis Doby
>> that’s correct.

Ted Simons
>> what about people looking for jobs or not looking for jobs? How does that factor into the equation?

Dennis Doby
>> well, the survey is based on people actively looking for work in the last four weeks. if they said they've done some active job search in that four-week period, they would be included. if they say they were discouraged, and gave up looking for work they would not be included in the total civilian employment rate.

Ted Simons
>> 6.6 to 7, what are you looking at the next three, six, nine months?

Dennis Doby
>> national forecasters I keep hearing saying about mid 9% range. what we're seeing the national rate 7.6 percent rate. The Arizona rate usually climbs to match or equal but we’re expecting the national rate to continue trending upwards. I would expect that we might see both nationally and in Arizona, it top 8 percent sometime here in 2009.

Ted Simons
>> so when were at 7, and we just went from 6.6 to 7, you’re saying it go from 7 to topping 8 sometime in 2009. That pretty strong stuff

Dennis Doby
>> we went from 6 percent in September to 7 percent in January in just a four month time period.

Ted Simons
>> thank you for the numbers. we appreciate it.

Dennis Doby
>> no problem.

Health Care Cuts

  |   Video
  • Arizona's health care system is enduring severe budget cuts made by the state legislature. Arizona Hospital and Health Care Association President John Rivers discusses the impact of the cuts.
Guests:
  • John Rivers - President, Arizona Hospital and Health Care Association
Category: Medical/Health

View Transcript
Ted Simons
>> Arizona hospitals, like so many other groups, are feeling the pain of state budget cuts. one example is a $7 million cut to a residency program for doctors. because there are two-to-one federal matching funds, the cut ballooned to $21 million. that could make Arizona’s doctor shortage even worse. here to talk about how budget cuts are affecting hospitals is John Rivers, C.E.O. of the Arizona hospital and healthcare association. John nice to have you here.

John Rivers
>> nice to be here.

Ted Simons
>> let's talk about budget cuts in particular. an overview, how are they affecting hospitals?

John Rivers
>> predominantly in three ways. first we have cuts to the disproportionate share programs. these are hospitals that take care of large numbers of low income and uninsured people. safety net hospitals. so they've been affected by budget cuts. the secondary, you talked about graduate medical education. that's how we fund our training programs for doctors in the future. those have been cut. and then the third area affects predominantly rural hospitals because access like every other state agency was given a lump sum budget reduction and taken out of the hide as they have little choice to of our rural hospitals.

Ted Simons
>> so the payment freeze regarding access, explain what that is and how much that's affecting you guys.

John Rivers
>> a payment freeze says we're not going to pay you any more for taking care of the patients you took care of last year. that was a $49 million hit in fiscal 2009 on top of another $64 million hit we took in the recently passed FY '09. so those are the global numbers even in the healthcare field, and that's real money.

Ted Simons
>> and that also includes federal matching funds correct?

John Rivers
>> yes, this is what a lot of people don't understand about our Medicaid program called access works. think of it as a 401k plan. you put a dollar into it, and your employer puts in $3. that's the way our state Medicaid program is funded. in this case, it's the federal government. The reverse is also true if you take a dollar out of the 401k program and your employer takes $3 out at the same time, it works the same way under our state's access program. the incentive is to put as much money as you can to strengthen the economy of the state, not to take as much money out as you can.

Ted Simons
>> and you have a two-to-one match on that residency program.

John Rivers
>> it's a two-to-one match under the old formula, but the increase in federal Medicaid funding has changed that to a three-to-one match. everything is three-to-one instead of two-to-one now.

Ted Simons
>> federal stimulus, what do you know about money coming into Arizona, and how will the money affect hospitals, in particular, and healthcare in general?

John Rivers
>> well how it should effect hospitals and how it will effect hospitals may not be the same thing. the global math is that there's about $4 billion in -- $4 billion, that's billion with a B -- that's coming into Arizona over roughly a two-year period. that affords the legislature a huge opportunity not to make vital cuts in essentially healthcare services that are -- that are there for the people who need them most. even though the state may be in a recession, people still need healthcare services.

Ted Simons
>> with that in mind, talk about the ramifications of these cuts and the economy as well. which is playing a major factor in all of this? it sounds to me that those of us that pay will be paying more.

John Rivers
>> there is no question that the burden shifts, we call it the hidden healthcare tax, the burden for paying for those who can't afford healthcare is shifted on the back of those who are already paying for healthcare and in most cases they are paying more than they need to. so every time the government under-pays for one of their patients, a Medicare or Medicaid or access patient, some of that cost is going to get shifted to private paid patients.

Ted Simons
>> how else are hospitals responding or planning to respond?

John Rivers
>> well, it's very difficult. we're making this case to the legislature right now. and because hospitals contrary to popular opinion are not recession proof, we tend to be resistant, but not recession proof. and that's because right now, we find that people are cutting back on -- finding volumes are down. elective surgeries are down. if it's an out of pocket expense, people are deferring it. people who show up for healthcare services don't have insurance. so we're definitely affected by the current recession, philanthropy is down. it's almost a perfect storm of economic pressure that’s on hospitals right now.

Ted Simons
>> you said you are talking to law makers right now, what are you hearing back from the legislators?

John Rivers
>> they understand this issue. it's not like they can't figure out the math. we go back to the 401k example, is pretty evident. they see it, they understand it. I think they're sympathetic to the arguments about strengthening the healthcare safety net. not shredding it. their problem is a math problem. they have an awful problem they're trying to solve and they're sensitive and understand the issues we've raised. they want to help and it remains to be seen if they can find the financial resources to do it.

Red Simons
>> are they more sensitive now than they might have been before the '09 budget was submitted?

John Rivers
>> I think they understand it better now. the fy '09 budget was put together in a hurry. we understand the time pressure that it caused them to pass it quickly in the first place. I don't know if I’d say they're more sensitive to it, but they understand the problem a lot better now than they did three or four weeks ago.

Ted Simons
>> thanks for joining us. we appreciate it.

John Rivers
>> you're welcome.

Renewable Energy Tax Credit Bill

  |   Video
  • The President and CEO of the Greater Phoenix Economic Council talks about a bill recently introduced by state lawmakers that offers economic incentives to renewable energy companies that move their headquarters or manufacturing facilities to Arizona.
Guests:
  • Barry Broome - President, Greater Phoenix Economic Council
Category: Sustainability

View Transcript
Ted Simons
>> state lawmakers have introduced a bill that offers economic incentives to renewable energy companies that move their headquarters to Arizona, its an effort to create high paying jobs, stimulate the economy, and make Arizona a leader in renewable energy. earlier I talked about the renewable energy tax credit bill with Barry Broome, president and C.E.O. of the greater phoenix economic council.

Ted Simons
>>could this be described as a stimulus bill?

Barry Broome
>> well I wouldn’t want to refer to it as stimulus because I think part of the business plan of Arizona is understanding how each of these industries we have a chance to compete on need to be effected through a state policy. so there's a tremendous amount of pent up capital and interest in this technology. I think it will have a run rate faster than the traditional economy, so from that standpoint, I think it will stimulate but it's a business plan for Arizona’s future for the next 25, 30 years.

Ted Simons
>> what kind of renewable energy firms are targeted by this bill?

Barry Broome
>> the bill targets all firms. it could be biomass, fuel cells, wind technology or even wave technology. a lot of them are going to be intensive engineering and manufacturing components. so a lot of these have big materials connections to it. obviously, there's one renewable that's part of the future of Arizona and that's solar. due to the propensity for sun here in Arizona, solar is 40% more efficient in our state than typical states and our proximity to California within the next five years gives Arizona a chance to be an export player in technology to a place like California, plus service our own energy needs.

Ted Simons
>> what jobs are we talking about here? manufacturing, headquarter jobs, both?

Barry Broome
>> yeah, both. believe it or not, solar cells are a similar technology to semiconductor and when people think of Arizona having a advantage because of the sun, that's really a consumer issue. when you hear of the concentrated solar power investment, a farm out in rural Arizona, the permanent job impact on a project like that, might only be 85 jobs but the materials connected to this industry is very much an engineering play, very similar to semiconductor. So Arizona is one of the number two markets in the US in supplying semiconductor talent to the community college talent is important to this industry and it feeds into the workforce as well as the obvious of having the sun.

>> as far as attracting firms, looking mostly right now because of the nature of the beast at international firms?

Barry Broome
>> you know, the breakthrough in solar has occurred in Japan, Spain and Germany. what makes this exciting to us, Japan and Germany are the number two investors from a foreign market in Arizona year and year out. especially Japan, solar has reached parity with traditional power costs. so Germany is targets united states and target California as a place to do business and I think that puts Arizona in an excellent position. plus California, a place of great innovation, silicon valley is going to lead the united states in solar technology. California’s cost of doing business really makes Arizona a natural for this industry to gestate. there's competition for this industry. new Mexico, Colorado, Washington and Oregon have made greater advances towards this technology than Arizona.

Ted Simons
>> and this bill in particular, how will this put us on a par or even ahead of the other states you just mentioned? what does it do, and compared to what has already been done?

Barry Broome
>> I think it's important to understand what the role is of a state strategy or state incentive. it isn't to replace overall competition. the reason Arizona is poised to succeed, the vision of Tucson electric power, our universities and a nice job by our legislators of keeping government small and keeping the cost of business competitive. what an incentive does is, it give a company a chance to evaluate your state with other states that have similar capabilities. Arizona has an identical workforce to Oregon. New Mexico and Texas have similar sun patterns to Arizona and we all have the ability to service California, and so this would be a 10% investment tax credit on capital. like the house bill number 2614 that recently passed, it will re-classify real-estate personal property taxes for 10 years and probably put Arizona in the top three in the nation and I think it will guarantee that Arizona will be one of the five states that solar clusters.

Ted Simons
>>I know it also has a requirement as far as salary is concerned and in terms of health care? Talk about that.

Barry Broome
>> one of the problems right now in Arizona’s budget is we're home to a lot of working poor. we have a lot of people that work full time that cannot afford healthcare. this budget gets out of control because of things like access. We look at Arizona’s economy, we create a lot of jobs in small business and healthcare is now becoming out of reach for small businesses to provide in their employees and in order to get this incentive, a company has to provide a traditional healthcare plan and plus it needs to pay 125% of the average of Arizona’s current state median wage.

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