Page 9 - The Edge - Winter 2016
P. 9

2015 LEGISLATIVE WORKSHOP

            BY DON HARRIS



            Jim Rounds: Education and Workforce Issues

            Vital to Arizona’s Growing Economy




           As Arizona climbs its way out of the Great Recession and positive  It doesn’t have to be in manufacturing, but it darn well better be
        steps are being taken to encourage economic development, education  something. We’d better get creative going forward and   gure out a
        plays a key role in producing a competent and quality workforce.  way of getting high value-added jobs back to the state.”
           Jim Rounds, President of Rounds Consulting Group, provided   Unlike previous recoveries, Arizona is not poised to experience
        school representatives with an economist’s view of Arizona’s future,  a boom.    ere are some things the state can control and others
        a snapshot of the nation’s well-being, and where public schools   t in.  that are not controllable. “For example, we can’t control the fact
        He spoke at the 2015 Legislative Workshop on Nov. 13 sponsored  that somebody has to wait years for a mortgage if they went thru
        by the Arizona School Boards Association, the Arizona Association   foreclose,” Rounds said. “We can’t control the fact that a lot of
        of School Business O   cials and the Arizona School Administrators   students getting out of college are having massive amounts of debt.
        association, and he expanded his observations in a subsequent   And, if the U.S. economy is only going through moderate expansion,
        interview.                                             that dictates what our expansion will look like. All we can do is try
           In a normal expansion period, Arizona is a Top 5 state in job   to manage it.”
        creation, and at a minimum in the Top 10, Rounds said. “But because   Nationally, Rounds expects growth, but no economic boom.
        of the nature of the recession and the nature of our economy, we’re   “We’ll probably see a moderate to weak economy for the next couple
        seeing weaker growth than what we saw in previous expansions,” he   of years and then sharper growth in the next expansion,” he said. He
        said. As a result, the federal Bureau of Labor Statistics ranked Arizona   cautioned that another downturn is possible if, for example, the Dow
        13th in job creation in September as compared to the corresponding   Jones Average hits 20,000. “   at is a bubble waiting to burst.”
        month in 2014.    e top   ve states were Utah, Washington, Florida,   Rounds then cited things state leaders can control, like having
        Oregon and Nevada.                                     a competitive tax structure and responsible economic development
           Not to worry. States are grouped tightly in terms of job growth and
        it wouldn’t take much for Arizona to become a Top 10 state again.   programs. “We can control having a solid marketing plan for the
                                                               state, not just for tourism but for business recruitment,” he said.
        Even so, Rounds cautioned about rates of growth. “You’re going to   It appears that the state is on the right track in those areas, he said,
        see strong rates of growth in housing permits, but coming o   such a   adding, “One area I’d like to see the governor and the Legislature
        low base, even growing by 10 or 15 percent doesn’t mean that much
        anymore,” Rounds said. “And with construction employment, you   focus on in the coming year is the extent that we grow small
        will see strong growth rates just because of basic math. If we fall 50   businesses so that they become larger, powerful businesses down the
        percent, we’ve got to double our current level or basically grow by   road. In other words, we need to talk about how the state is going
        100 percent to get back to where we were. Getting to normal will   to grow the economy from within – not just by getting that next
        require strong rates of growth.”                       company to come to Arizona.
           By last September, Arizona had recovered 83 percent of the jobs   “To grow from within means we need to be talking about
        lost during the recession years, according to a federal report. “A lot   workforce issues, more than we have in the past,” Rounds said. “We
        of people are arguing that the Arizona economy is broken because   have to do a better job of quantifying where we stand and how we
        we haven’t recovered all those jobs,” Rounds said. “But we knew it   improve.”
        would take at least until 2015 because of the nature of the recession      at’s where education plays a pivotal role. “What this means
        and the nature of our economy.    e real story is that it is taking   for AASBO members is that growing from within is an important
        about a year longer than expectations.    at doesn’t sound so bad.”  concept, which means that workforce issues are important concepts,
           Weeks a  er his presentation, Rounds said the state’s job recovery  which means that education is an important concept,” Rounds said.
        had jumped to 88 percent in November. He expects a full recovery   When leaders talk about business development, they need to
        in construction employment by the end of the decade, but he doesn’t  talk about workforce training, Rounds said.  “   e importance of
        see Arizona recouping manufacturing jobs anytime soon.   education issues to economic development is a valid topic,” he said.
           “   e world has changed, and we saw weaknesses developing  “If we keep hearing this more and more, it gives education groups
        with a lot of jobs going overseas,” Rounds said. “Motorola jobs are  additional seats at the table — and I think that’s great.”
        disappearing and we’re adding jobs at Walmart at record paces.
        We have shi  ed from a manufacturing core that paid high wages.  Jim Rounds can be reached at rounds@roundsconsulting.com or
        We have to   gure out a way of getting those high wage jobs back.  (602) 739-0844.


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