A new report finds that Arizona would reap economic benefits of nearly $5 billion in additional state and local tax revenues over 10 years simply by reaching the U.S. average for educational attainment.
Released last week by the business community at a Southern Arizona Leadership Council Future of Workforce Event, the report finds that future economic growth depends on improving investment in workforce development and postsecondary education today.
Between 2020-2030, it is estimated Arizona will have an estimated 68,000 annual job openings that require at least a bachelor’s degree. Under current conditions, there will be an annual shortage of 26,300 bachelor’s degrees, leaving Arizona unprepared for a competitive workforce.
“This vital analysis is a compelling and clear-eyed call to action for additional state investment in postsecondary education and workforce development at a time when evidence suggests Arizona is falling behind,” ABOR Chair Lyndel Manson said. “If current trends continue, fewer than 17% of today’s 9th graders will have earned a university degree by 2029. During this same time period, the report estimates Arizona will annually issue 26,300 fewer bachelor’s degrees than our economy needs.”
Economist Jim Rounds, president of Rounds Consulting Group, which produced the report, acknowledges that the state has made significant economic progress over the past decade and is home to one of the country’s strongest economies.
But, he says, more needs to be done to ensure the state reaches its full potential.
“Arizona’s future economic prospects brighten with increased educational attainment,” he said. “Increased educational attainment also helps the state’s leaders and economic developers further elevate the state’s economic profile to businesses outside the state looking to invest here.”
With additional targeted investment in workforce development, including postsecondary education, Arizona will reap a sizable economic return on its investment, leading to greater economic competitiveness and growth for the state.
“Despite Arizona’s recent strong economic growth, this report makes clear that our state has yet to reach its full potential,” Arizona Chamber of Commerce & Industry President and CEO Danny Seiden said. “We all benefit when more Arizonans are contributing to the economy. Increased educational attainment means greater opportunity and a more vibrant future for Arizonans and our state overall.”
The report finds that the creation of higher-wage jobs leads to more economic stability. During the most recent recession, the number of jobs in Arizona that required less than a high school diploma declined by 21.8%. This compares to an 11.4% decline in jobs that require at least a high school diploma. Conversely, jobs that require at least a bachelor’s were stable.
The report also finds that the fiscal impact of not improving is significant. The increase in productivity related to enhanced GSP and employment counts would generate $4 billion in new tax revenues for the state and local governments each year, far exceeding investment costs related to policy implementation.
“This report on ‘Advancing Arizona’s Economy’ is essential reading for every state and local policymaker, business official and education leader, and should serve as a wake-up call for Arizona to act before it’s too late,” Manson said.