Professor: Arizona’s new unemployed leaving state

Outflow of workers artificially improves unemployment numbers, economist says

Published On:
Wednesday, November 25, 2009
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An ASU economist said about 200,000 people have left Arizona over the past two years because of unemployment, plunging the state’s unemployment rate below the national average.

Dennis Hoffman, an economics professor at the W. P. Carey School of Business, said Arizona’s unemployment rate would be about 15 percent or higher if the number of unemployed who left the state was included.

One reason so many of Arizona’s unemployed workers have picked up and left is because construction — one of the state’s most-affected industries — is very mobile, unlike Detroit’s auto industry, he said.

“When you’re out of a job with Detroit and you’re used to working on an auto-assembly line, there’s really no place for you to go, so you just stay there and collect unemployment,” he said. “In Arizona, when you lose your job and you’re in construction or population-growth related service industries, you just pull up stakes and go to another state.”

Another reason Hoffman thinks many people have left is because of laws that can severely penalize Arizona businesses for hiring undocumented immigrants.

“A number of people who have left the state have been effectively told they’re not welcome,” he said. “So they haven’t just left the state in search of jobs elsewhere, per se; some of them have been chased out of the state because we are aggressively enforcing employer sanctions laws.”

Arizona’s unemployment rate sits at 9.3 percent, while the national rate is 10.2 percent, according to an employment report released by the Arizona Department of Commerce on Nov. 19 for the month of October.

These numbers are correct, Hoffman said, but they still don’t account for unemployed residents who have left the state.

“There are workers who would be unemployed had they stayed here, and they simply left the state in search of other jobs or because they were being pursued by law enforcement officials,” he said.

However, Hoffman said a more meaningful number than the unemployment rate is the number of jobs being created or lost. According to the Department of Commerce’s report, Arizona gained 13,200 jobs in October, a 0.5 percent gain.

“I’m actually encouraged by the Department of Commerce saying there was slight job creation last month — that’s a good thing, [but] we need a lot more, and frankly, it’s going to take a lot more before our unemployment rate begins to improve,” he said.

Historically, employment surges after recessions because of the number of available employees outside the U.S., but Hoffman said it will be interesting to see what happens due to Arizona’s laws after the recession.

“The demand for those people may be there, but they may be prevented from working by our aggressive enforcement of employer sanctions,” he said.

Reach the reporter at salvador.rodriguez@asu.edu.