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November 7, 2013

Host: Steve Goldstein

Arizona Employment Projection

  |   Video
  • A report was released today on future job growth in Arizona, and it predicts a two-percent growth rate. Arizona Board of Regents economist Dan Anderson will discuss the jobs forecast.
  • Dan Anderson - Economist, Arizona Board of Regents
Category: Business/Economy   |   Keywords: job growth, increase, economy,

View Transcript
Steve Goldstein: A report released today predicts a two percent plus job growth rate over the remainder of the year and into next. The report predicts a full jobs recovery to prerecession levels, is three to five years away. Here to talk about that is Arizona Board of Regents Economist Dan Anderson. Welcome.

Dan Anderson: Steve.

Steve Goldstein: What is with this recovery the idea that we are going to have to wait another year or two?

Dan Anderson: I think the jobs are not coming back faster because the national economy is slower in recovering, and the national economy is slower because we don't have the kind of international growth, the kind of fiscal strength stamina going on to drive it forward. In previous recoveries we have had situations where we recovered the jobs lost in a recession, and maybe in a year, 18 months, two years at the most, and we were back to the level we were at before, and we continued to grow along. And I can remember times, back in the 90's or so, when we were creating 100 to 150 thousand jobs a year. Our forecast now, looked to be, you know, 50 thousand, maybe or so, maybe a bit less than that this year. And next year, coming up around 60 thousand jobs, and given the tremendous decline that we had, you know, from 2008 to the present, Arizona's recovered less than half of the jobs that were lost. So, it's going to take a while, even when we are creating jobs at 50 to 60 thousand a year, to dig ourselves out of that hole, just to get us back to where we were before the recession began.

Steve Goldstein: And in recent recoveries, Arizona has always been faster to recover even if the recession had hit the state harder. What are we doing about job diversity, we talk about there is too much reliance on construction, real estate, and are we getting beyond that?

Dan Anderson: I think we are getting beyond it, it is difficult, we've been there before so many times, and it's hard to get out of that mode. And we're being almost forced into doing that because, of course, people haven't been able to leave where they were. They cannot leave Illinois or leave California because they are under water in their homes, and they cannot sell it. And so, they are, basically, stuck where they are, and we are not creating very many jobs, so there is very little pushing people out of where they are, and there is very little pulling people in here. The fortunate piece is that when you take a look at job creation, it's not just one sector. It’s not just construction that's growing or manufacturing. We're seeing job creation in most sectors. Some areas are going to grow more rapidly than others, most definitely. But, it's not -- it's not just one sector that's driving our economy, so, we're getting some of that diversification, and I know in economic development circles, they are really trying to bring in a lot more businesses, and I think that there are plenty of opportunities.

Steve Goldstein: How big of a deal going with economic development do you think that the Apple expansion to Mesa is?

Dan Anderson: I think that it's indicative of a bigger thing, and that is that we're getting more diversification, that really domestic producers are beginning to say, there are opportunities within the United States to bring manufacturing in, to make the components here, instead of it's everything has to be exported to the middle east, or to the far east or other places, so we're beginning to do some of that development here, and when you take a look at the balance sheets of businesses, they are virtually a wash in cash. They have plenty of resources to make the investment. And one of the concerns is how confident are they in the economic health and the decisions being made in this country to allow them to make wise decisions here, to invest their money, to create those jobs. And probably the biggest problem that I think a business faces is uncertainty when they don't know what the future is going to bring. It's very -- it's very risky for them to make those long-term investment decisions.

Steve Goldstein: We have heard so much about uncertainty, tied to the Affordable Care Act, people worried about that, and uncertainty always seems to be part the business environment. So why does uncertainty seem to be so much more dramatic now?

Dan Anderson: I think that there is more uncertainty. I think that there are questions at the national level, about what the fiscal authorities are going to be doing, and I think that there is less uncertainty on the monetary side, you know, the Federal reserve has signaled clearly that they are going to keep an easy monetary policy, and when we saw them kind of indicate that they might be starting to tighten up, boy, did the market react to that quickly. And so I think there are some places where there has been, you know, improvement, but I think particular at the national level where you don't really know what the federal government will be doing, and what the directions are going to be, and all of that conflict creates uncertainty in businesses, basically, want to stand on the sidelines, and until they are confident that things are, are clearer and they know what's going to happen.

Steve Goldstein: As economist for the Board of Regents, you know about the importance of higher education driving Arizona's economy. We talk about this often. So, how much does education in the state, K-12 and higher education, have to improve for it to affect the economy in a positive way?

Dan Anderson: Well, I think that it's a big deal, and I think that really, we do have to have, if we are going to really move our state forward, we need to have something that is valuable to employers, and I think the greatest value that we can have is an educated workforce who can be productive, and really help businesses be more efficient. And it's not just a matter of people filling, you know, low level, low skilled positions, I think that businesses are looking for people who are really, can be very productive who can learn because the jobs are changing all the time. And we're getting more and more businesses that more high tech oriented. They need people with those educational skills.

Steve Goldstein: What industries are you watching closely that may help Arizona's recovery and when the next recession comes for us to get out of the recession faster?

Dan Anderson: Well, there are a number of sectors. Clearly, business services is one of the big areas, and I think that health services is another significant growth area, and manufacturing, particularly, a high tech manufacturing, we have got a lot going on, in a number of sectors, and high tech business services. Financial services, and I think again, there is a wide array of, of areas in which we're seeing growth, much of it is here, and we're seeing lots of opportunities in Tucson, and in Prescott, and in Yuma and other places, as well.

Steve Goldstein: Dan, finally, I'm a big admirer of economists, I interview them all the time and respect them. When we look at this idea of the job recovery, we heard about 2015. Now we’re hearing 2016, 2017. How much can we trust what's coming, not to cap on economists, but how should we know, how should we measure what we really know? What are the factors that those of us who are laypeople should be looking at to see if the economy is really in recovery mode?

Dan Anderson: I think that people, obviously, they look at their own individual situations first, and how well am I doing and how well are my neighbors and how well are my friends doing, and then on broader scale we start to take a look at, at the state's budget picture, how healthy is the state's budget? What kinds investments is the state putting back into the system, and how is that improving? And finally, what do we see in the way of business expansion? We need to, to have not only the existing businesses here, and growing, but we need to be attracting other businesses. We're clearly a growth area, and Arizona still has the advantages it has had for decades and decades. But I don't think that we're going to see the kind of rapid growth that maybe we saw in previous decades. A slower, more predictable growth I think is advantageous for us.

Arizona Town Hall

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  • The latest Arizona Town Hall focuses on early childhood education. More than 170 Arizona leaders, businesspeople, educators, elected officials and students hammered out the latest town hall report to lay out ideas to foster improvements in our education system. President of Arizona Town Hall Tara Jackson and President and CEO of the Greater Phoenix Chamber of Commerce Todd Sanders will discuss the report.
  • Tara Jackson - President, Arizona Town Hall Tara Jackson
  • Todd Sanders - President and CEO, Greater Phoenix Chamber of Commerce
Category: Education   |   Keywords: arizona, students, education, report,

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Steve Goldstein: For the past five decades, Arizona Town Hall has created a forum for Arizona leaders to offer solutions to our biggest problems. The latest Town Hall focused on early childhood education. More than 170 Arizona leaders, business people, educators, elected officials and students hammered out a report that proposes ideas to improve our education system. Tara Jackson, President of Arizona Town Hall, is here to discuss the report. Also with me is Todd Sanders, President and CEO of the Greater Phoenix Chamber of Commerce, one of the Town Hall participants. Welcome to you both.

Tara Jackson: Thank you.

Steve Goldstein: Tara, let's talk about early education. Let's define the terms. When we say early, what does that really mean?

Tara Jackson: Early means birth to age eight.

Steve Goldstein: Birth. Wow. Let's talk about some of the suggestions that are going to come out of the report, are they practical things that Arizona can do right away or long-term solutions?

Tara Jackson: All of the above, there are practical solutions that apply to mothers, to small business owners, to people who have nothing to do with the policy or not involved in the policy that might happen at the state legislature, and there are also recommendations that apply to policy leaders so they are across the board, and some start today. Some are already happening.

Steve Goldstein: And what are some of those?

Tara Jackson: For example, how you choose to interact with a young child has a huge impact on their brain development. And which then, impacts how well they do in school, how well they promote our economy. I was just listening to your discussion with the economist you just interviewed, and one of your last questions was how can we know what's going to happen in 2016. Well, we can help control it by helping to educate a workforce that is ready for the future economy.

Steve Goldstein: Todd, that’s so important. I know you deal with economy all the time. So, education and the economy in-sync and early childhood education. We heard so much when Governor Napolitano was in office about all day K. Is that still important? Was that overrated? Give us background on that.

Todd Sanders: No, it really isn't. I think Dan's points were absolutely right on. There is a growing body of evidence that engaging children at the earliest age really makes a difference, and that delta, really is very large, as children get older. There was a study that was, actually, discussed, and it was a study done in the 60s, and they tracked these kids for 40 years, and the benefits, the ROI is incredible. One of the conservative estimates was the ROI was 10 to 1 in terms of the dollars spent, so, from our perspective, this is critical.

Steve Goldstein: Let's talk about engaging children, what does that mean? What sort of communication does that entail?

Tara Jackson: Well, there were a number of different things that one, one of our keynote speakers talked about, and she is known around the world for her research and studies on what is impactful in children. And her name is Dr. Adele Diamond, and her presentation is, actually, on our website. And our participants were incredibly taken with the research, so engaging, some of the most effective engagement, is not necessarily what we might think as a parent. Instead, of, of trying to get your three-year-old to learn every letter, what those studies show is that it's far more important to have them experiencing interaction, to have story-telling, to have physical activity, and one of the things that I thought was really interesting and an asset that Arizona has that, and Dr. Diamond's words, we don't take advantage is being bilingual. Growing up bilingual as a young child actually has been shown to have a huge impact on what they call executive functions. Executive functions are things like being patient, being able to listen and pay attention closely. And so that when grow up learning two languages, as I believe Todd did, you are ten steps ahead in learning these skills.

Steve Goldstein: Todd, based on what you heard, I will come back to the economic factors, as well. Was there a discussion about the impact on folks who come from low income families as opposed to those who come from middle or higher income in terms of how they learn and they are communicated with?

Todd Sanders: I think that the discussions that were had, that these things really matter across the board. And I think that what Tara mentioned, I think is very impactful, is that parents can be a big part of this, a big solution. It does not have to be a big spend. So, the Phoenix Public Library has a tremendous program where they’re reading to kids, and they are teaching the children, so, I think that crosses economic barriers, and it really can be impactful.

Steve Goldstein: Talk about just learning to communicate, because, in your business, Tara, we all have to communicate and know how to get along with other people. And that has to start at an early age, as well.

Todd Sanders: Absolutely. It's tremendously important, and the language skills, and all of those things are exponential over time. I think, you know, the idea of going to the moon, as you take off, if you don't have that correct trajectory, that small difference in the beginning can be huge at the end, and that's how I see early childhood education and the earlier we can engage, the bigger the return on investment.

Steve Goldstein: Tara, Let's talk about the concerns, though. When early education is not good, what are some of the things that we should fear? How does this affect society and how does this affect kids for the rest of their lives?

Tara Jackson: Well, in the earlier segment you said you were a big fan of economists, and your question goes right into one of our economist speakers from the Federal Reserve. And one question that I think that everyone had, is why would the Federal Reserve care about early education? And the reason is the Federal Reserve, one of their missions is to make sure that our economy is very robust. And what they have learned from many studies is that if you don't have effective quality early education, whether it's from a center or a program or a parent in home, there are huge ramifications later on in terms, social services, high school drop-outs and our jail systems, and huge, huge ramifications.

Steve Goldstein: And Todd, what about the business community. What should the business community be doing to make sure that, that K-12 or earlier than that, education in Arizona is improved? Is there more the business community could be doing?

Todd Sanders: I think that there is a growing awareness among the business community that we really need to start engaging at this level. It's clear, I think that Tara is right when, you look at the biggest line items in the budget, all that can be avoided if you are doing the right thing, so, we think that there is a lot of opportunity here, and I can tell from our perspective, the greater Phoenix Chamber of Commerce, as an economic development organization, it's tremendously important. You hear about an 8 percent unemployment rate, and as I talked to members, they cannot find people. So there is something missing there.

Steve Goldstein: Tara there is this feeling that – I don't want to be cynical – but a feeling that there has to be a buy-in. And the Town Hall is vital, it's important for getting the ideas out and making suggestions. Is there more that needs to be done to make sure that our leaders, not just business leaders like Todd, but others will say I recognize the importance and I will do something about it?

Tara Jackson: There is always more that can be done, and especially, with something like early education that everyone should care about even if you don't have children. Early education has such an impact on our economy, and on the taxes you are going to pay. And to go back to those, that economic analysis, every dollar that is spent has been shown over and over again, and in a variety of studies, to come back at $10, and up to $18 or more, in the tax savings that your money that you are going to be paying to incarcerate people.

Steve Goldstein: And Todd when we see the expansion of Apple. I use that as an example because it happened this week, if Arizona were doing better when it comes to early childhood education, would the announcement not be as big of a deal because it would be more common?

Todd Sanders: I think you are absolutely right on that and more importantly, when you think about the existing Arizona companies and the job base, that's the great way to keep the companies here and getting them to grow. Think about Intel and the growth that they are engaging in now. More companies see a qualified workforce. And you are going to see more of that. I think that's absolutely correct.

Steve Goldstein: For both of you, Todd, let me start with you, how important is a vision for this? When we talk about early childhood education, people may not think that they are going to see the benefits of that for 15 to 18 years, who knows. What does it take to have a vision and patience that these things will pan out?

Todd Sanders: I think that's part of what you alluded to, especially with policy makers, it's our job to really make the case for this because you do have to have a vision. It's not a short-term type of proposal, but I think that these results actually can be seen at an earlier time frame than necessarily a full 13 years. So, I think that our job is to make sure that we make the case.

Piper Charitable Trust Encore Career Prize

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  • The Virginia G. Piper Charitable Trust will honor an inspiring encore career leader who is addressing a major social need in Maricopa County with a second career. We will talk Mike McQuaid, winner of the inaugural Piper Trust Encore Career Prize.
  • Mike McQuaid - Award Winner, Piper Trust Encore Career Prize
Category: Community   |   Keywords: leader, award, maricopa county,

View Transcript
Steve Goldstein: The Virginia G. Piper Charitable Trust will honor an inspiring encore career leader who’s addressing a major social need in Maricopa County with a second career. The recipient of the inaugural encore career prize is Mike McQuaid. He's President of J.M. Management Company, a real estate and investment firm, and is also deeply involved in numerous valley charities and joins me now to talk about winning the award and his charity work. Mike, welcome and thank you for being here. First, you had to be nominated for this. Did you know you were nominated?

Mike McQuaid: I knew a while ago that I was nominated by the United Way and a couple other individuals.

Steve Goldstein: How did you decide to get involved with homelessness, in particular, with your business background?

Mike McQuaid: Well, in the very beginning, it was more just from trying to help in the community, the people who are homeless. My wife and I, many years ago, got involved with the early upstart of a charity called Andre House, a soup kitchen, still going on today, and serving a meal right as we speak in Downtown Phoenix. And we were looking for, through our church, a community project for teenagers, and including our own son, so that's why I first got involved and got around with the homeless of our community.

Steve Goldstein: And Mike, many people are charitable, many people spend time, some money, and you have obviously gone above and beyond with that, and I wonder, if you win a prize like this it's clearly significant, it's extremely meaningful to you, so, beyond that, what do you think in your mind, in your soul, really drove you to do this?

Mike McQuaid: For me, it really was, was meeting individuals on the street almost 30 years ago that had almost nothing, and they had no family. They were by themselves, and they were really down and out, and kind of giving up on life, and for me, personally, I could not imagine that because I come from a very close-knit supportive family, and my wife, Molly and I have two wonderful sons, and grandchildren, and we have that family, and it just hurt me to see people suffering like that, and that's what really first got me involved with trying to help the homeless.

Steve Goldstein: I say this jokingly to some extent but people have this vision of a successful business leader, and not that they don’t do charitable things, but that they are driving hard to make that next buck, and you are making a dollar a month involved with the Human Services Campus, and how did you reach that amount?

Mike McQuaid: They have not paid me lately. That was more a token thing when I was first asked to be the director of the Human Services Campus, and I really have, this award in particular, is very meaningful to me, and I never got into charity work to win awards, or a prize like this, certainly, but, to have it be from Piper, the Virginia G. Piper Charitable Trust and Experience Matters, those two organizations mean a great deal to me. So on behalf of hundreds and thousands of volunteers that help the homeless, I am happy to accept it, but, my business background, I think, really did help me in helping create the Human Services Campus. And that's a 12-acre site, about the same size that we do in our business, is a neighborhood shopping center, so putting the right partners together and creating the site plan, and how to deliver services is very similar to a retail operation. It's helped me tremendously.

Steve Goldstein: What are some of the things being done at the Human Services Campusthat are making not necessarily a dent in homelessness but making it a bit easier for those folks who are homeless?

Mike McQuaid: Well, we are really going beyond a dent at this time. It used to be just food, shelter and clothing, and that was the compassionate thing to do to help somebody who didn't have those things, and as I say, that drew me to it, but, I always wanted to see what could we do more, and really, to end someone’s homelessness is to put them in housing, and so, years ago, Steve Zabilski said, from St. Vincent De Paul and Mark Holleran from CASS and Sister Adele O’Sullivan from Healthcare for the Homeless and many others got together and we got the support of the community. Leaders like Marty Schultz and Governor Brewer, at that time, the chairman of the board supervisors, and we really sat down and worked out how could we better serve the homeless, and that would be if we were in one location so we could deliver those services, the basic needs, in a better fashion. And that's grown, today was our eighth anniversary at the campus, and we have done, you know, tens of thousands of meals, and thousands and thousands of medical appointments, and we helped thousands of people get employed, and back on their feet, but what we are doing now and with the help of the United Way, what I’m involved with is permanent supportive housing. As I said earlier, the way that somebody ends their homelessness is to be housed, so we are focusing on -- it's great to provide the basics, food, shelter and clothing but we want to get people into housing faster, and we said as a community, a goal of ending chronic homelessness. And believe it or not, I can say today, and I said it last night at the awards banquet, we will end chronic homelessness among Veterans in the next 12 months. We identified the chronically homeless in our community, and we will do that, and shortly thereafter, we should end chronic homelessness, and that’s somebody who has been homeless more than a year, or multiple times in the last three year, and I heard in the earlier discussions about economic models, and what's good for the community, and those are individuals that have, have been constantly taking our services disproportionately. And at the campus, we see about 1,200 or 1,300 people a day. And they consume over 65 percent of our resources, that small 15 percent, so, we're housing chronically homeless individuals.

Steve Goldstein: Mike, thank you and congratulations again.

Mike McQuaid: Thank you.

Steve Goldstein: Nice to have you here.

Steve Goldstein: Friday on "Arizona Horizon," it's the journalist's roundtable, apple opening a production plant in Mesa was one of the many business stories this week. We’ll be here tomorrow night at 5:30 and 10:00 for the journalists’ roundtable. I'm Steve Goldstein. Thanks for watching. And have a great night.