When one thinks of the major financial hubs in the United States, the cities that come to mind are usually New York City, Chicago, and Los Angeles. But according to a Milken Institute study, Phoenix eclipsed New York, Los Angeles, and Chicago in financial sector job creation between 2012 and 2017.
During the five-year span, Phoenix added 16,000 financial jobs, according to the study. This was the most in the nation, eclipsing the biggest financial cities in the nation. Because of this and job growth in other sectors like technology, Phoenix jumped 20 spots between 2017 and 2018 to breach Milken’s top-20 best-performing cities in the nation.
Arizona economist Elliott Pollack explains that this is largely due to the expansion of firms either into or within the Valley. “We have some big financial companies coming in. You take a look at the nature of firms: Wells Fargo, Chase, Bank of America. But it’s also the insurance companies like State Farm, USAA, and American Express,” Pollack said. “We have a lot of financial companies that have been expanding and coming into the market. This has been a combination of the economy expanding and companies moving here because they found it was a good place to be.”
Pollack highlights the state’s affordability, low cost of living, positive governmental attitude towards businesses, and surplus of impressive potential employees as advantages of doing business in Arizona. These factors combine for an attractive setting for businesses in all industries.
In fact, in 2016 and 2017, Phoenix had some of its best years of the century, according to the Bureau of Labor Statistics. The city posted 10.2 and 8.4 percent increases in financial net job growth. Since the recession, Phoenix has recovered over 49 thousand jobs; this compares favorably to New York and Los Angeles, which have only recovered 42.8 and 25.9 thousand, respectively.
Pollack breaks down why Phoenix has gained an edge over Los Angeles and New York. “New York has different kinds of financial firms, like more of banks, which have not been growing as rapidly,” he said. “Los Angeles has problems with the cost of doing business, the wages they have to pay, the high cost of living. It really is a function of more companies moving here and expanding here. In terms of major cities in the western United States, Phoenix is it.”
When asked about the future of this growth, Pollack was confident, “Honestly, I would be surprised if this growth didn’t continue.”