http://stream.publicbroadcasting.net/production/mp3/knau/local-knau-864017.mp3
Phoenix, AZ – So far this year the state has lost more than 100,000 jobs. The
new figures predict another 70,000 will disappear before the end
of the year. That is more than triple the record for a single
year. Economist Jack York said that pattern likely will continue
into the third quarter of next year before firms begin hiring
again. Much of the problem remains the fact that Arizona's
economy is highly dependent on construction employment which just
three years ago made up close to one out of every 10 jobs in the
state. When people can't sell their homes back East -- and can't
find jobs here -- they stay put where they are. But York said
that's only part of the problem.
(Compounding the effects of the housing bubble as it's rolling
down through Arizona's economy is the use of income by businesses
and consumers to reduce debt instead of purchasing goods and
services. A large fraction of this consumer debt was created
through home equity loans as people borrowed against the rising
value of their homes.)
York said what's happening now is Arizonans are using their
income both to pay down that debt and to actually put money into
savings. But less consumer spending means less sales -- and fewer
people needed to make and sell goods. Only health services are
expected to continue hiring as the state's aging population needs
care. For Arizona Public Radio this is Howard Fischer.