JOB QUALITY IN ARIZONA
COMPARED TO ALL STATES
June 2005

Tom R. Rex
Associate Director
Center for Business Research
L. William Seidman Research Institute
W. P. Carey School of Business
Arizona State University
Box 874011
Tempe, Arizona 85287-4011
(480) 965-3961
FAX: (480) 965-5458
EMAIL: tom.rex@asu.edu
www.wpcarey.asu.edu/seid/cbr

CONTENTS
Summary
Introduction
Data
Methodology
Industrial Data
Industrial Mix in 2003
Change in Industrial Mix between 2000 and 2003
Occupational Data
Occupational Mix in 2003
Change in Occupational Mix between 2000 and 2003
Overall Job Quality
Factors Affecting Wages

2
3
3
4
5
5
7
12
12
13
18
21

Tables
1. Industrial Mix in 2003 Ranked by State
2. Change in Industrial Mix between 2000 and 2003 Ranked by State
3. Industrial Job Quality by State
4. Arizona’s Industrial Job Quality by Sector
5. Occupational Mix in 2003 Ranked by State
6. Change in Occupational Mix between 2000 and 2003 Ranked by State
7. Occupational Job Quality by State
8. Arizona’s Occupational Job Quality by Major Occupational Group
9. Overall Job Quality in 2003 Ranked by State
10. Overall Change in Job Quality between 2000 and 2003 Ranked by State
11. Average Wage and Job Quality by State

1

6
9
10
11
13
14
16
17
19
20
22

SUMMARY
Job quality in Arizona in 2003 ranked 21st among all states (including the District of
Columbia) at 1.6 percent below the national average. The industrial mix portion of job quality
was 1.5 percent less than the national average, ranking 24th, while the occupational mix portion
was only 0.1 percent below average, ranking 22nd.
The state’s job quality was seventh highest among 11 competitor (mostly western) states;
Arizona also ranked seventh in this group on both industrial mix and occupational mix. Among
11 new economy states, Arizona’s job quality was the lowest as its industrial mix ranked last and
its occupational mix was second lowest.
The primary causes of Arizona’s subpar industrial mix are its heavy concentration of
employment in the below-average-paying sectors of administrative support and accommodation
and food services and the relatively small size of the high-paying professional, scientific and
technical services sector. In the administrative support sector, the low-paying temporary help,
employee leasing, and telemarketing industries are relatively large in Arizona. The low-paying
tourism industries of lodging and restaurants also are of above-average size in Arizona. In
contrast, the high-paying activities of research and development in physical, engineering and life
sciences; computer systems design, particularly custom computer programming; and legal
services are relatively small in Arizona.
The manufacturing and health services sectors provide the largest positive influences on
the state’s industrial mix. The high-paying semiconductor manufacturing industry is relatively
large in Arizona. Some low-paying health care industries, particularly nursing care facilities, are
less common than average in Arizona.
The occupational mix in Arizona is bolstered by a higher-than-average percentage of the
workforce in high-paying engineering and architectural occupations and a smaller-than-average
share working in low-paying production positions. However, these positive effects are offset by
relatively small proportions working in several high-paying occupational groups (most notably
health care professionals) and relatively high proportions in several low-paying groups,
especially food preparation and serving.
The change in job quality in Arizona between 2000 and 2003 was negative, with job
quality falling by 0.3 percent more than the national average, ranking the state 39th. The
industrial mix fell 0.4 percent relative to the national average, ranking 38th, while the
occupational mix marginally improved relative to the U.S. average, ranking 26th. Arizona was in
the middle against each of the comparison groups on change in overall job quality, change in
industrial mix, and change in occupational mix.
Considerable job losses in the high-paying semiconductor industry are responsible for
Arizona’s poor performance on the change in industrial mix between 2000 and 2003. Other than
this one industry, the change in industrial mix relative to the national average was positive,
though Arizona still ranked only in the middle of the states.
In Arizona, none of the 22 occupational groups had a large change in the occupational
mix value between 2000 and 2003. Gains in the business and finance, health practitioners, and
legal groups were offset by drops in the management, computer and mathematical, and sales
groups.

2

INTRODUCTION
The best way to evaluate job quality would be to analyze a dataset that presents both
occupational and industrial data, but the only dataset of this nature available by state comes from
the decennial census. It is severely limited by small sample size, the latest data are for 1999, and
the 1999 data are not consistent with the 1989 data. Thus, the initial work by the Seidman
Institute on job quality (Job Quality in Arizona, March 2005, available online at
wpcarey.asu.edu/seid) presented data on Arizona job quality from several sources of either
industrial or occupational data.
Job Quality in Arizona Compared to All States is an extension of the March 2005 report.
Arizona’s job quality in the latest year and its change over time is compared to the national
average and is ranked among the 51 “states” (including the District of Columbia). In addition,
Arizona is ranked among two comparison groups:
• Ten “competitor” states as designated by the Greater Phoenix Chamber of Commerce:
California, Colorado, Florida, Georgia, Nevada, New Mexico, Oregon, Texas, Utah, and
Washington. Eight of the 10 states are in the West, including all five of Arizona’s
adjacent neighbors.
• Ten “new economy” states identified by the Milken Institute: California, Colorado,
Connecticut, Massachusetts, Maryland, Minnesota, New Jersey, Utah, Virginia, and
Washington. Only four of these states are in the West, with each of these also being part
of the “competitor” grouping.
Data
Two datasets produced by the U.S. Department of Labor’s Bureau of Labor Statistics
were used for this analysis: industrial data from the Quarterly Census of Employment and Wages
(previously called the ES-202 program) and occupational data from the Occupational
Employment Statistics (OES) program. The ES-202 data are a census of all workers covered by
the unemployment insurance program and provide the most detailed industrial data. The wages
of part-time workers are not adjusted to full-time-equivalent status. The OES is the only source
of occupational data by state other than the decennial census. OES data are adjusted to full-timeequivalent status, but are based on a sample of employers.
The time period analyzed is constrained by the limited availability of occupational data
and the three-year sampling cycle with which the occupational data are obtained. The latest data
are for 2003 and are compared to 2000.
The quality of the ES-202 and OES employment and wage data is limited by the federal
government’s disclosure regulations, which require data to be withheld when too few companies
are represented in an industry or occupation or when one company dominates the industry or
occupation in any given geographic area. Substantial amounts of detailed data are withheld in
both the OES and ES-202 datasets, particularly in less populated areas (including many states).
The national ES-202 dataset includes 1,170 industries, but the number available by state in both
2000 and 2003 ranges from 1,053 in California to only 263 in Wyoming and 242 in the District
of Columbia. The national OES dataset contains 733 occupations, but the number available by
state in both 2000 and 2003 ranges from 681 in California to 364 in Rhode Island and 313 in the
District of Columbia
The withholding of data also has the effect of very substantially increasing the time
required to do an analysis of job quality. The industrial and occupational categories that are
withheld vary by year and by geographic area. Thus, to do an analysis of all states for two years

3

meant individually handling the datasets for 51 states x 2 years x 2 datasets (occupation and
industry), or 204 unique datasets. This figure was doubled to 408 by the need to compare each
state to a national dataset that matched the specific state dataset in terms of the industries or
occupations withheld.
The March 2005 Job Quality in Arizona report presented data for Arizona’s metropolitan
areas as well as for the state. While it would be possible to compare job quality in metropolitan
areas across the nation, the time required to prepare the data for such an analysis would be
extremely substantial. More importantly, except in the largest metro areas, the withholding of
data is very extensive, lessening the quality of the analysis that could be performed. For example,
only 90 industries were available for the Yuma metro area in both 2000 and 2003. Even in the
Phoenix area, only 246 were available — less than one-fourth of all industries.
Methodology
A method to evaluate job quality at a given point in time was presented in the March
2005 job quality report: The job mix is a comparison of the occupational or industrial structure of
employment in a subnational area to the national average at a point in time. To isolate the effect
of geographic differences in the employment structure, average wage is held constant in the
calculation of job mix by using national wage data. (Since local wages are not used, geographic
differences in living costs and other factors that affect local wage levels do not distort the
analysis.) The formula is (difference in share of employment between the subnational area
and the nation) * (ratio of average wage to overall average wage – 1) * 100, summed over all
occupations or industries. For example, a job mix value of –0.5 indicates that the job mix in the
local area lowers the area’s average wage by 0.5 percent relative to the national average; a value
of 2.0 indicates that the job mix in the local area raises its average wage by 2 percent relative to
the national average.
The change in job quality over time can be computed using any of three formulas. The
simplest technique is to calculate the difference in job mix over time. Geographic differences in
living costs and other factors that affect local wage levels do not distort this calculation. Thus, it
is the preferred method when the focus is to compare states.
The Job Quality in Arizona report used a different calculation of the change in job quality
since the focus of that report was to look at Arizona over time rather than to compare it to other
states. The change in job quality (sometimes referred to as “score”) was calculated from the
following formula, summing over all categories (industries or occupations): (change over time
in categorical share of employment) * (ratio of average wage to overall average wage – 1) *
100. The average wage used in this formula was that for Arizona for the first year of the
comparison period. (Using the average wage in the last year rather than the first year results in
only slightly different results when a short time period such as three years is being examined.)
When looking at only one geographic area, this method has the advantage of acknowledging the
unique wage structure of the area. When comparing states, however, this method has the distinct
disadvantage of being affected by factors other than the change in job quality, such as geographic
differences in living costs, geographic variations in worker productivity, and labor force supply
and demand factors that reflect geographic differences in the perceived quality of life.
A third calculation of the change in job quality uses national rather than local wages in
the score formula presented in the preceding paragraph. The result differs from the change in job
mix calculation because it uses the average wage in just one year while the job mix calculation
uses the wage data in each year.

4

INDUSTRIAL DATA
Industrial data are categorized using the North American Industry Classification System
(NAICS). This system divides 20 two-digit sectors into three-digit subsectors, four-digit industry
groups, and five- or six-digit industries. The goal of this project was to retain as much industrial
detail as possible, so six-digit industries are the unit of analysis. However, because of the
intensive data collection and manipulation that was necessary, a compromise was made in that
all withheld six-digit industries were combined for each two-digit NAICS sector, rather than
using the intermediate three-digit and four-digit subsector and industry group data.
In a few states in the ES-202 dataset, even sectoral data were withheld. In these states, the
undisclosed sectoral total was combined with the unclassified category (which also was
withheld). Otherwise, the unclassified category was excluded from the analysis.
Industrial Mix in 2003
Differences in the industrial mix between Arizona and the nation in 2003 on net resulted
in Arizona’s wages being 1.5 percent less than the national average. Since the state’s average
wage was 7 percent below the national average, factors other than industrial mix were
responsible for most of Arizona’s shortfall in wages.
Though Arizona’s industrial mix value was negative, the state ranked marginally above
the middle of the 51 “states” (including the District of Columbia) at 24th. Only 15 mostly
populous states had an industrial mix that had a positive effect on the state’s average wage
relative to the national average. On many measures the U.S. average is quite different from the
value for the median (26th) state because of the wide differences in size among the states. For
example, employment in California in 2003 was greater than the combined employment of the
21 smallest states.
The seven states with the strongest industrial mixes in 2003 all are located along the
northern-to-central Atlantic Coast. Three of Arizona’s neighboring states (California, Colorado
and Utah) as well as Texas are among the 14 states with an industrial mix value of at least 1 (see
Table 1). Arizona’s 2003 industrial mix ranked seventh among the 11 competitor states and was
last among the new economy states.
Of the 20 NAICS sectors, three had significantly negative industrial mix values in
Arizona in 2003. Arizona had a larger-than-average share of its jobs in the below-average-paying
administrative support (an industrial mix value of –0.83) and accommodation and food services
(–0.53) sectors. The state also had a below-average share of jobs in the high-paying professional,
scientific and technical services sector (–0.70). The manufacturing sector (0.42) and the health
care and social assistance sector (0.48) were the largest positive influences on Arizona’s
industrial mix.
Manufacturing was among those sectors causing most of the state-by-state differences in
industrial mix, along with professional, scientific and technical services; finance and insurance;
and information. Wages in each of these sectors are well above average and employment in each
is geographically concentrated.
Arizona’s industrial mix value was among the top 10 states in the nation in four sectors:
transportation and distribution, real estate and leasing, health services and social assistance, and
arts, entertainment and recreation. However, the industrial mix value was not much different
from zero except in health services, the only one of the four sectors to exhibit much variation in
value by state. Arizona’s industrial mix value was among the bottom 10 states in five sectors:

5

agriculture, construction, educational services, administrative support, and accommodation and
food services.
The state’s weak industrial mix relative to the new economy states derived particularly
from its low sectoral shares in four high-wage, high-knowledge service sectors: information;
finance and insurance; professional, scientific and technical services; and management of
companies. In addition, a disproportionately high share of Arizona’s employment was in two
low-paying sectors: administrative support and accommodation and food services.

TABLE 1
INDUSTRIAL MIX* IN 2003 RANKED BY STATE
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.

District of Columbia
Massachusetts (n)
Delaware
New Jersey (n)
New York
Connecticut (n)
Virginia (n)
Colorado (c,n)
Illinois
Maryland (n)
Minnesota (n)
California (c,n)
Texas (c)
Utah (c,n)
Georgia (c)
Michigan
Pennsylvania
Kansas
Washington (c,n)
Missouri
New Hampshire
Ohio
Oklahoma
Arizona (c,n)
Louisiana
Alabama

20.4
6.5
5.2
5.0
4.5
4.2
3.1
2.0
1.7
1.5
1.4
1.3
1.2
1.1
0.4
-0.2
-0.3
-0.3
-0.9
-1.1
-1.2
-1.5
-1.5
-1.5
-1.6
-2.0

27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.

Rhode Island
North Dakota
Indiana
Tennessee
Kentucky
Alaska
West Virginia
North Carolina
Arkansas
Wisconsin
Nebraska
Oregon (c)
Wyoming
New Mexico (c)
Idaho
Iowa
South Dakota
Florida (c)
Maine
South Carolina
Vermont
Mississippi
Montana
Hawaii
Nevada (c)

-2.1
-2.2
-2.4
-2.4
-2.4
-2.5
-2.6
-2.6
-2.8
-2.9
-2.9
-3.0
-3.3
-3.7
-4.1
-4.5
-4.7
-4.9
-5.0
-5.2
-5.9
-6.4
-7.4
-8.8
-9.0

* Sum over all industries of (state – U.S. employment share) * (ratio of average wage to overall
U.S. average wage – 1) * 100.
c = competitor state, n = new economy state
Source: Calculated from U.S. Department of Labor, Bureau of Labor Statistics, Quarterly Census of
Employment and Wages.

6

The state’s large negative industrial mix value in the administrative support sector largely
resulted from the heavy use of employee leasing and temporary help in Arizona, both low-paying
industries. The large size of the low-paying telemarketing and landscaping industries also
contributed. In the accommodation and food services sector, the negative value resulted from
Arizona’s above-average amount of tourism, reflected in both the restaurants and lodging
industries. The negative value in the professional, scientific and technical services sector came
primarily from the small size of three high-paying activities: research and development in
physical, engineering and life sciences; computer systems design, particularly custom computer
programming; and legal services. The only industry in this sector with much of a positive value
was management consulting.
The large and high-paying semiconductor industry largely was responsible for the
positive industrial mix value in Arizona’s manufacturing sector, with contributions from the
sizable and high-paying navigation instruments and aircraft industries. In the health services
sector, the positive value resulted from some low-paying industries being less common than
average in Arizona, particularly nursing care facilities. Of all industries, the largest positive
impacts on Arizona’s industrial mix came from semiconductor manufacturing and nursing care
facilities. The industry with the largest negative value was employee leasing.
Change in Industrial Mix between 2000 and 2003
Arizona’s industrial mix dropped relative to the national average between 2000 and 2003,
causing Arizona’s average wage to fall –0.4 percent. This poor performance lowered Arizona’s
industrial mix rank from 20th in 2000 to 24th in 2003. Though the decrease in value was modest,
Arizona’s change in industrial mix between 2000 and 2003 ranked only 38th among all states.
Thirty-three mostly small states experienced an increase in value between 2000 and 2003.
Arizona’s change in industrial mix ranked in the middle compared to the competitor states (sixth
of 11) and new economy states (fifth of 11).
The change in industrial mix between 2000 and 2003 was inversely related to the 2003
level in most states: States with the strongest industrial mixes in 2003 generally experienced
declines between 2000 and 2003 while most of the states with the greatest improvement over the
three years still had low values in 2003. As seen in Table 2, many of the states with
improvements in industrial mix of at least 1 are located in the Great Plains/northern Rocky
Mountain or southern regions. (A positive change in industrial mix means only that a state
performed better than the national average, not that job quality improved.)
Since the industrial mix is expressed relative to the national average, the change in
industrial mix cannot be calculated at the national level. Thus, the change in the nation’s job
quality over time is measured by the score formula. Nationally, industrial job quality has been
declining since at least 1970, though generally at a slow pace. Between 2000 and 2003, the
national industrial job quality score was –1.5: If the nation’s industrial mix had not changed
between 2000 and 2003, the average wage would have been 1.5 percent higher in 2003 than the
actual figure. The only states not to have a negative score (calculated using national wages) for
this three-year period were Wyoming (a score of 0.5), Hawaii (0.2) and Rhode Island (0.0).
Arizona’s score based on national wages ranked 36th among all states; using state wages
the rank was 28th. The latter measure is affected by factors other than change in job quality. The
change in industrial mix value by state can be compared to the difference in score between the
nation and each state using Table 3.

7

The decrease in Arizona in the industrial mix value in manufacturing between 2000 and
2003 was greater than the overall Arizona decline. None of the other sectors had much of a
change in job quality, but the net change in these 19 sectors was 0.7. The largest gains were in
finance and insurance, administrative support, and accommodation and food services.
The manufacturing sector caused the most variation in state-by-state changes in industrial
mix. The information; professional, scientific and technical services; finance and insurance; and
government sectors also contributed to the geographic differences. Arizona had the third largest
negative change in the manufacturing industrial mix value. The state also ranked among the
bottom 10 states in five other sectors, but only in wholesale trade did the decrease in the job mix
value reach –0.1. Arizona ranked among the top 10 states in five sectors, but the change in value
was slight in three of them. The increase in administrative support (0.25) was the largest in the
nation and the gain in accommodation and food services ranked eighth at nearly 0.3. Arizona
industrial mix values and ranks for each of the 20 sectors is presented in Table 4.
The large decrease in Arizona in manufacturing’s industrial mix value between 2000 and
2003 (–1.1) was due to the semiconductor industry, which had the third largest decline (–1.2) of
any industry in any state. The semiconductor industry in 2003 was highly concentrated in just
seven states, based on share of total state employment. Arizona ranked third behind Idaho and
Oregon. The only other states with a share greater than the national average were Texas,
California, Massachusetts, and Colorado (barely). All seven of these states experienced a
decrease in semiconductor employment between 2000 and 2003, but Arizona’s decrease was the
largest on a percentage basis (32 percent). The state lost more than 10,000 jobs in an industry
with an average pay of more than $80,000 per year (more than double the overall average). Thus,
the state’s poor performance on job quality over this period can be traced to this one industry —
the change in job mix in the other 692 industries was 0.8. However, even using this value, the
state’s ranking on change in industrial job quality would be marginally below the middle of the
states.

8

TABLE 2
CHANGE IN INDUSTRIAL MIX* BETWEEN 2000 AND 2003 RANKED BY STATE
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.

District of Columbia
Wyoming
Hawaii
Montana
Louisiana
North Dakota
Rhode Island
Iowa
Alaska
West Virginia
Wisconsin
Oklahoma
South Dakota
South Carolina
Florida (c)
Nevada (c)
Nebraska
Tennessee
Mississippi
Maryland (n)
North Carolina
Kansas
Maine
Kentucky
Alabama
Ohio

4.4
2.5
2.4
2.0
1.9
1.8
1.8
1.6
1.6
1.5
1.5
1.5
1.4
1.3
1.3
1.3
1.2
1.1
1.1
1.0
1.0
1.0
1.0
0.9
0.9
0.9

27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.

Delaware
Connecticut (n)
Pennsylvania
New Mexico (c)
Missouri
Vermont
Virginia (n)
Illinois
Washington (c,n)
Georgia (c)
Indiana
Arizona (c,n)
Utah (c,n)
Texas (c)
Arkansas
Minnesota (n)
Michigan
Oregon (c)
Idaho
New York
New Jersey (n)
Colorado (c,n)
California (c,n)
New Hampshire
Massachusetts (n)

0.8
0.8
0.7
0.7
0.5
0.2
0.1
-0.0
-0.2
-0.3
-0.4
-0.4
-0.4
-0.5
-0.5
-0.8
-0.9
-1.0
-1.2
-1.6
-1.6
-1.7
-1.9
-2.1
-2.7

* Sum over all industries of (state – U.S. employment share) * (ratio of average wage to overall
U.S. average wage – 1) * 100.
c = competitor state, n = new economy state
Source: Calculated from U.S. Department of Labor, Bureau of Labor Statistics, Quarterly Census of
Employment and Wages.

9

TABLE 3
INDUSTRIAL JOB QUALITY BY STATE

Alabama
Alaska
Arizona (c,n)
Arkansas
California (c,n)
Colorado (c,n)
Connecticut (n)
Delaware
District of Columbia
Florida (c)
Georgia (c)
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland (n)
Massachusetts (n)
Michigan
Minnesota (n)
Mississippi
Missouri
Montana
Nebraska
Nevada (c)
New Hampshire
New Jersey (n)
New Mexico (c)
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon (c)
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas (c)
Utah (c,n)
Vermont
Virginia (n)
Washington (c,n)
West Virginia
Wisconsin
Wyoming

2000
-2.85
-4.12
-1.13
-2.23
3.22
3.71
3.43
4.33
16.00
-6.18
0.72
-11.19
-2.91
1.74
-1.98
-6.10
-1.34
-3.32
-3.46
-5.98
0.48
9.19
0.70
2.14
-7.48
-1.60
-9.43
-4.10
-10.24
0.92
6.58
-4.41
6.08
-3.69
-4.08
-2.35
-2.99
-2.07
-1.02
-3.90
-6.47
-6.04
-3.51
1.74
1.45
-6.05
2.98
-0.78
-4.16
-4.42
-5.74

Industrial Mix*
2003
Change
-1.97
0.88
-2.49
1.63
-1.51
-0.38
-2.77
-0.54
1.28
-1.94
1.97
-1.74
4.18
0.75
5.15
0.82
20.43
4.42
-4.88
1.30
0.44
-0.28
-8.83
2.36
-4.09
-1.17
1.70
-0.03
-2.35
-0.38
-4.47
1.64
-0.34
1.01
-2.42
0.90
-1.60
1.86
-5.02
0.96
1.52
1.04
6.54
-2.65
-0.17
-0.87
1.38
-0.76
-6.42
1.06
-1.12
0.48
-7.39
2.04
-2.93
1.17
-8.99
1.25
-1.18
-2.10
4.96
-1.61
-3.69
0.72
4.49
-1.59
-2.65
1.04
-2.23
1.85
-1.48
0.87
-1.49
1.50
-3.02
-0.95
-0.29
0.73
-2.09
1.81
-5.16
1.31
-4.68
1.36
-2.40
1.12
1.24
-0.51
1.07
-0.38
-5.88
0.17
3.07
0.09
-0.94
-0.16
-2.62
1.54
-2.89
1.54
-3.28
2.46

Difference in Score**
State Wage U.S. Wage
0.65
0.67
0.61
0.39
0.41
-0.11
0.26
-0.59
-1.34
-1.23
-1.07
-1.02
1.13
0.69
-2.66
0.47
1.17
1.14
1.30
0.95
0.27
-0.06
1.46
1.55
-0.88
-0.49
-0.04
-0.15
-1.78
-0.89
0.79
0.89
0.74
0.58
0.39
0.57
1.38
1.34
0.45
0.46
0.73
0.68
-1.39
-1.70
-4.48
-1.19
-0.00
-0.36
0.53
0.57
0.31
0.10
0.68
1.26
1.42
0.90
1.60
1.07
-0.89
-1.27
-0.92
-1.26
0.43
0.19
-1.42
-1.28
0.90
0.97
1.32
1.13
0.31
0.51
0.78
1.08
0.42
-0.12
0.66
0.40
1.92
1.33
0.74
0.96
0.22
0.43
1.14
0.89
-0.14
-0.08
0.24
-0.37
-0.04
-0.25
0.34
0.35
0.77
0.36
0.19
0.79
0.94
1.02
2.28
1.84

(continued on next page)

10

State Score**
State Wage U.S. Wage
-0.73
-0.71
-0.63
-0.84
-1.04
-1.57
-1.13
-1.98
-2.84
-2.73
-2.56
-2.51
-0.28
-0.72
-4.02
-0.89
-0.28
-0.31
-0.21
-0.56
-1.21
-1.53
0.15
0.24
-2.33
-1.93
-1.53
-1.64
-3.20
-2.32
-0.58
-0.49
-0.63
-0.79
-1.08
-0.90
-0.09
-0.12
-0.88
-0.87
-0.76
-0.81
-2.86
-3.16
-5.95
-2.65
-1.50
-1.86
-0.80
-0.76
-1.08
-1.29
-0.65
-0.06
0.03
-0.49
0.20
-0.33
-2.38
-2.76
-2.38
-2.72
-1.01
-1.26
-2.91
-2.78
-0.56
-0.48
0.05
-0.14
-1.20
-1.00
-0.62
-0.32
-1.09
-1.63
-0.82
-1.08
0.60
0.01
-0.61
-0.39
-1.14
-0.92
-0.25
-0.50
-1.66
-1.60
-1.23
-1.84
-1.25
-1.46
-1.15
-1.16
-0.72
-1.13
-1.10
-0.51
-0.50
-0.42
0.96
0.52

TABLE 3 (continued)
* Sum over all industries of (state – U.S. employment share) * (ratio of average wage to overall U.S.
average wage – 1) * 100.
** Sum over all industries of (change over time in sectoral share of employment) * (ratio of average wage
to overall average wage – 1) * 100.
c = competitor state, n = new economy state
Source: Calculated from U.S. Department of Labor, Bureau of Labor Statistics, Quarterly Census of
Employment and Wages.

TABLE 4
ARIZONA’S INDUSTRIAL JOB QUALITY BY SECTOR
2003
Sector
TOTAL
Agriculture
Mining
Utilities
Construction
Manufacturing
Wholesale Trade
Retail Trade
Transportation
Information
Finance & Insurance
Real Estate & Leasing
Professional Services
Management of Companies
Administrative Support
Educational Services
Health Services
Arts & Recreation
Accommodation & Food
Other Services
Government

Value*
-1.51
-0.23
-0.00
0.01
-0.09
0.42
0.08
0.02
0.14
-0.21
-0.14
0.06
-0.70
-0.34
-0.83
-0.05
0.48
0.20
-0.53
0.21
-0.02

Rank,
All
24
46
16
28
43
13
12
13
5
20
14
8
25
29
50
43
4
2
42
18
27

Rank,
Comp
7
7
6
5
7
4
5
5
3
9
3
1
9
7
10
10
3
1
8
5
6

Rank,
New
11
9
3
2
8
4
5
6
1
10
8
4
11
10
11
7
1
1
10
2
6

Value*
-0.38
0.03
-0.06
0.01
-0.03
-1.09
-0.14
-0.09
-0.01
0.01
0.24
0.03
0.05
0.14
0.25
-0.04
-0.04
0.10
0.28
0.07
-0.07

2000-to-2003 Change
Rank,
Rank,
All
Comp
38
6
8
3
46
9
23
5
41
7
49
11
49
10
48
8
36
8
37
4
11
2
6
2
32
4
13
4
1
1
49
10
33
4
7
2
8
2
17
3
34
8

Rank,
New
5
2
11
4
7
11
10
9
8
4
2
2
1
3
1
10
6
2
1
2
7

* Sum over all industries of (Arizona – U.S. employment share) * (ratio of average wage to overall U.S.
average wage – 1) * 100. The sector totals are calculated as the sum of the industry values within each
sector.
Rank, All: rank among the 51 states
Rank, Comp: rank among the 11 competitor states
Rank, New: rank among the 11 new economy states
Source: Calculated from U.S. Department of Labor, Bureau of Labor Statistics, Quarterly Census of
Employment and Wages.

11

OCCUPATIONAL DATA
Occupational data are categorized using the Standard Occupational Classification (SOC).
This system aggregates six-digit occupations into 22 two-digit major occupational groups.
Undisclosed data by occupation were combined by major occupational group.
Occupational Mix in 2003
Differences in the occupational mix between Arizona and the nation in 2003 on net
resulted in Arizona’s wages being just 0.1 percent less than the national average. Thus, the
occupational mix barely contributed to Arizona’s average wage being 7 percent less than the
national average. Though Arizona’s occupational mix value was slightly negative, the state
ranked a little above the middle of the 51 “states” (including the District of Columbia) at 22nd.
Arizona’s 2003 occupational mix ranked seventh among the 11 competitor states and 10th
among the 11 new economy states.
The states with the strongest occupational mixes in 2003 are disproportionately located
along the northern-to-central Atlantic Coast, filling seven of the top 10 positions. Two of
Arizona’s neighboring states (California and Colorado) as well as three other western states are
among the 19 states with a positive occupational mix value (see Table 5).
Much of the state-to-state variation in occupational mix resulted from three high-wage
groups that are concentrated geographically: management, business and financial operations, and
computer and mathematical. The below-average-paying production group also had a wide range
of occupational mix values across the states.
Of the 22 SOC major occupational groups, two had relatively high occupational mix
values in Arizona in 2003: the high-paying architecture and engineering group (0.51) had an
above-average share of Arizona’s workforce (mostly due to aerospace, electronics and electrical
engineers) while the lower-than-average-paying production group (0.47) was relatively small in
Arizona. The food preparation and serving group had a similarly large negative value (-0.46) due
to its low wages and above-average size. In addition, Arizona had a smaller-than-average share
of its jobs in several above-average-paying groups, particularly health practitioners and technical
and computer and mathematical.
Arizona’s occupational mix value was among the top 10 states in the nation only in the
architecture and engineering group (fifth). In four groups — health practitioners and technical;
food preparation and serving; farming, fishing and forestry; and construction and extraction —
the state ranked among the bottom 10.
The state’s weak occupational mix relative to the new economy states derived both from
its low shares in some high-wage, high-knowledge occupational groups — particularly computer
and mathematical and life, physical and social sciences — and its high shares in some lowpaying groups, especially tourism-related food preparation and serving and building and grounds
cleaning and maintenance.
Among the 543 individual occupations available for Arizona, the small size of the highpaying general managers occupation led to the largest negative value. Eight other states had a
more sizable negative value in this occupation. Arizona’s large negative figure resulted from a
substantial decrease in value between 2000 and 2003; five states had a larger decline in this
occupation. Otherwise, none of the occupations in Arizona had either a large 2003 value or a
significant change in value over the three years.

12

Change in Occupational Mix between 2000 and 2003
Arizona’s occupational mix strengthened marginally relative to the national average
between 2000 and 2003, causing Arizona’s average wage to rise 0.1 percent. (A positive change
in job mix means only that a state performed better than the national average, not that job quality
improved.) Despite this modest gain, the state’s rank on occupational mix slipped from 20th in
2000 to 22nd in 2003. Arizona’s change in occupational mix ranked 26th among all states, fourth
of 11 competitor states and sixth of 11 new economy states.

TABLE 5
OCCUPATIONAL MIX* IN 2003 RANKED BY STATE
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.

District of Columbia
Massachusetts (n)
Maryland (n)
Alaska
Illinois
Connecticut (n)
Virginia (n)
Colorado (c,n)
Delaware
New York
Idaho
New Hampshire
Minnesota (n)
California (c,n)
New Jersey (n)
Georgia (c)
Texas (c)
Washington (c,n)
Pennsylvania
Michigan
New Mexico (c)
Arizona (c,n)
Utah (c,n)
Rhode Island
Oregon (c)
Oklahoma

30.7
7.4
6.8
4.4
4.0
3.6
3.4
2.8
2.5
1.4
1.4
1.4
1.2
0.7
0.7
0.4
0.3
0.3
0.3
-0.0
-0.1
-0.1
-0.2
-0.8
-0.8
-0.9

27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.

Kansas
Missouri
Ohio
North Carolina
Maine
Louisiana
Montana
Tennessee
Wyoming
Nebraska
West Virginia
South Carolina
Alabama
Kentucky
Florida (c)
Vermont
Wisconsin
Indiana
Iowa
Hawaii
North Dakota
Arkansas
Mississippi
South Dakota
Nevada (c)

-1.4
-1.5
-1.5
-1.8
-2.0
-2.2
-2.3
-2.3
-2.5
-2.7
-2.8
-3.2
-3.3
-3.4
-3.6
-4.0
-4.1
-4.3
-4.8
-4.9
-5.0
-6.3
-6.7
-7.1
-9.9

* Sum over all occupations of (state – U.S. employment share) * (ratio of average wage to overall
U.S. average wage – 1) * 100.
c = competitor state, n = new economy state
Source: Calculated from U.S. Department of Labor, Bureau of Labor Statistics, Occupational
Employment Statistics.

13

Unlike the industrial mix, in which the change between 2000 and 2003 was inversely
related to the 2003 level in most states, the change in occupational mix was not related to its
level. The states with the greatest improvements in occupational mix are scattered across the
country, though several states in New England or along the central Atlantic Coast experienced
gains (see Table 6).

TABLE 6
CHANGE IN OCCUPATIONAL MIX* BETWEEN 2000 AND 2003 RANKED BY STATE
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.

District of Columbia
Hawaii
Rhode Island
Idaho
Minnesota (n)
Alaska
Georgia (c)
Massachusetts (n)
Illinois
Oregon (c)
Maryland (n)
Vermont
Connecticut (n)
Utah (c,n)
Wyoming
Tennessee
New York
Michigan
Kentucky
Oklahoma
Indiana
South Carolina
Arkansas
New Hampshire
Mississippi
Arizona (c,n)

7.2
1.7
1.7
1.6
1.4
1.3
1.3
1.2
1.2
1.2
1.2
1.1
0.9
0.8
0.7
0.7
0.7
0.5
0.5
0.5
0.5
0.4
0.2
0.1
0.1
0.1

27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.

Virginia (n)
Wisconsin
California (c,n)
Delaware
Nevada (c)
South Dakota
North Carolina
Pennsylvania
Montana
West Virginia
Colorado (c,n)
New Jersey (n)
Ohio
North Dakota
Kansas
Maine
Missouri
Nebraska
Louisiana
New Mexico (c)
Washington (c,n)
Florida (c)
Alabama
Iowa
Texas (c)

0.1
0.1
0.0
-0.0
-0.0
-0.0
-0.2
-0.2
-0.2
-0.3
-0.4
-0.4
-0.5
-0.7
-0.7
-0.8
-0.9
-0.9
-1.0
-1.0
-1.2
-1.2
-1.3
-1.8
-1.9

* Sum over all occupations of (state – U.S. employment share) * (ratio of average wage to overall
U.S. average wage – 1) * 100.
c = competitor state, n = new economy state
Source: Calculated from U.S. Department of Labor, Bureau of Labor Statistics, Occupational
Employment Statistics.

14

Nationally, occupational job quality fell 0.9 percent between 2000 and 2003: If the
nation’s occupational mix had not changed between 2000 and 2003, the average wage would
have been 0.9 percent higher in 2003 than the actual figure. Of the 29 states that performed better
than the national average, 11 (including the District of Columbia) experienced an improvement
in the occupational mix (calculated using the “score” formula and national wages) for this threeyear period.
Arizona’s occupational job quality score based on national wages ranked 26th among all
states (the same rank as that based on change in occupational mix); using state wages the rank
was 28th. The latter measure is affected by factors other than change in job quality. The change
in occupational mix value by state can be compared to the difference in score between the nation
and each state using Table 7.
In Arizona, none of the 22 occupational groups had a large change in the occupational
mix value between 2000 and 2003. Gains in the business and finance, health practitioners, and
legal groups (each among the top 10 nationally) were more than offset by drops in the
management, computer and mathematical, and sales groups, with the latter two ranking among
the bottom 10 states (see Table 8).

15

TABLE 7
OCCUPATIONAL JOB QUALITY BY STATE

Alabama
Alaska
Arizona (c,n)
Arkansas
California (c,n)
Colorado (c,n)
Connecticut (n)
Delaware
District of Columbia
Florida (c)
Georgia (c)
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland (n)
Massachusetts (n)
Michigan
Minnesota (n)
Mississippi
Missouri
Montana
Nebraska
Nevada (c)
New Hampshire
New Jersey (n)
New Mexico (c)
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon (c)
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas (c)
Utah (c,n)
Vermont
Virginia (n)
Washington (c,n)
West Virginia
Wisconsin
Wyoming

2000
-2.02
3.11
-0.20
-6.44
0.72
3.19
2.72
2.49
23.50
-2.34
-0.91
-6.68
-0.19
2.76
-4.76
-2.98
-0.61
-3.97
-1.28
-1.18
5.60
6.17
-0.55
-0.16
-6.80
-0.64
-2.05
-1.81
-9.89
1.26
1.10
0.84
0.75
-1.60
-4.31
-1.03
-1.34
-2.05
0.49
-2.51
-3.62
-7.00
-3.03
2.27
-1.00
-5.05
3.36
1.46
-2.50
-4.16
-3.28

Occupational Mix*
2003
Change
-3.32
-1.30
4.44
1.32
-0.12
0.08
-6.26
0.19
0.74
0.02
2.83
-0.36
3.57
0.85
2.48
-0.02
30.74
7.24
-3.56
-1.22
0.36
1.27
-4.94
1.74
1.41
1.60
3.97
1.21
-4.31
0.45
-4.78
-1.80
-1.36
-0.74
-3.45
0.53
-2.23
-0.95
-2.00
-0.82
6.76
1.16
7.40
1.23
-0.02
0.53
1.25
1.41
-6.72
0.08
-1.50
-0.86
-2.28
-0.22
-2.70
-0.88
-9.93
-0.04
1.39
0.13
0.72
-0.38
-0.11
-0.95
1.44
0.70
-1.81
-0.21
-4.96
-0.66
-1.52
-0.49
-0.88
0.46
-0.85
1.20
0.27
-0.22
-0.80
1.71
-3.18
0.44
-7.05
-0.05
-2.30
0.72
0.34
-1.94
-0.21
0.79
-3.98
1.07
3.44
0.08
0.30
-1.17
-2.77
-0.27
-4.08
0.07
-2.54
0.74

Difference in Score**
State Wage U.S. Wage
-1.15
-0.97
1.30
0.74
0.32
0.21
0.86
0.84
0.38
-0.11
-0.41
-0.36
0.72
0.70
-0.84
-0.50
2.81
4.03
-1.01
-0.97
0.95
1.14
2.43
1.98
1.25
1.38
1.13
0.66
0.54
0.93
-1.27
-1.23
-0.81
-0.43
0.45
0.78
-0.64
-0.72
-0.76
-0.73
0.84
0.47
0.41
0.45
-0.02
0.61
1.10
1.41
0.48
0.63
-0.97
-0.78
-0.23
-0.20
0.11
-0.37
1.12
0.73
-0.13
-0.18
-0.29
-0.29
-0.43
-1.04
0.73
0.59
-0.03
-0.09
-0.17
-0.21
-0.50
-0.36
0.52
0.43
1.46
1.30
-0.37
-0.41
2.42
1.83
0.70
0.58
1.06
0.85
0.81
0.75
-1.89
-1.94
1.57
0.97
1.43
1.86
-0.10
0.10
-0.82
-0.72
-0.01
0.13
0.47
0.71
1.29
1.14

(continued on next page)

16

State Score**
State Wage U.S. Wage
-2.05
-1.86
0.34
-0.21
-0.64
-0.75
-0.02
-0.05
-0.49
-0.98
-1.30
-1.25
-0.19
-0.20
-1.74
-1.40
1.90
3.12
-1.90
-1.86
0.07
0.26
1.45
1.00
0.25
0.38
0.24
-0.23
-0.38
0.01
-2.20
-2.16
-1.72
-1.34
-0.45
-0.11
-1.59
-1.67
-1.67
-1.64
-0.06
-0.43
-0.48
-0.45
-0.89
-0.26
0.20
0.52
-0.39
-0.23
-1.88
-1.68
-1.15
-1.12
-0.79
-1.27
0.18
-0.21
-1.07
-1.11
-1.18
-1.18
-1.37
-1.98
-0.15
-0.29
-0.90
-0.95
-1.15
-1.19
-1.39
-1.26
-0.39
-0.48
0.51
0.35
-1.26
-1.30
1.54
0.95
-0.17
-0.28
0.10
-0.10
-0.06
-0.12
-2.78
-2.82
0.70
0.10
0.49
0.93
-0.98
-0.79
-1.71
-1.61
-0.90
-0.76
-0.40
-0.16
0.36
0.21

TABLE 7 (continued)
* Sum over all occupations of (state – U.S. employment share) * (ratio of average wage to overall U.S.
average wage – 1) * 100.
** Sum over all occupations of (change over time in sectoral share of employment) * (ratio of average
wage to overall average wage – 1) * 100.
c = competitor state, n = new economy state
Source: Calculated from U.S. Department of Labor, Bureau of Labor Statistics, Occupational Employment
Statistics.

TABLE 8
ARIZONA’S OCCUPATIONAL JOB QUALITY BY MAJOR OCCUPATIONAL GROUP

Major Occupational Group
TOTAL
Management
Business & Financial Operations
Computer & Mathematical
Architecture & Engineering
Life, Physical & Social Sciences
Community & Social Services
Legal
Education, Training & Library
Design, Entertainment & Media
Health Practitioners & Technical
Healthcare Support
Protective Service
Food Preparation & Serving
Building & Grounds Cleaning
Personal Care & Service
Sales & Related
Office & Administrative Support
Farming, Fishing & Forestry
Construction & Extraction
Installation, Maintenance & Repair
Production
Transportation & Material Moving

Value*
-0.12
0.09
0.15
-0.25
0.51
-0.13
0.03
-0.06
-0.14
-0.09
-0.28
0.07
-0.01
-0.46
-0.12
0.09
0.01
0.07
-0.11
-0.12
-0.02
0.47
0.15

2003
Rank,
Rank,
All
Comp
22
7
22
6
14
4
25
8
5
4
40
8
14
6
19
4
39
7
31
10
42
7
18
7
36
8
42
9
38
8
20
5
17
5
29
5
47
8
48
9
34
7
16
6
23
5

Rank,
New
10
5
10
11
3
11
2
8
7
11
9
6
6
11
11
4
8
4
10
11
9
5
8

Value*
0.08
-0.22
0.24
-0.23
0.02
-0.05
0.02
0.13
-0.00
-0.02
0.24
-0.02
0.01
0.09
0.05
0.06
-0.29
0.07
0.00
-0.03
0.01
-0.10
0.11

2000-to-2003 Change
Rank,
Rank,
Rank,
All
Comp
New
26
4
6
37
7
8
6
1
4
46
6
8
27
7
9
39
10
11
15
5
3
3
1
2
21
6
5
29
8
7
7
2
1
36
10
11
23
9
7
16
6
3
11
2
3
17
3
2
47
11
11
17
4
1
29
7
9
39
4
8
20
3
3
37
8
11
13
2
3

* Sum over all occupations of (Arizona – U.S. employment share) * (ratio of average wage to overall U.S.
average wage – 1) * 100. The major occupational group totals are calculated as the sum of the
occupation values within each group.
Rank, All: rank among the 51 states
Rank, Comp: rank among the 11 competitor states
Rank, New: rank among the 11 new economy states
t: tie for rank
Source: Calculated from U.S. Department of Labor, Bureau of Labor Statistics, Occupational Employment
Statistics.

17

OVERALL JOB QUALITY
Overall job quality is approximated as the sum of the industrial mix and occupational mix
values. Thus, Arizona’s job quality was 1.6 percent less than the national average in 2003 (an
industrial mix value of –1.5 and an occupational mix value of –0.1). Among all states, Arizona
ranked slightly above the median at 21st, but Arizona’s job quality was seventh among the
competitor states and the lowest of the new economy states. The latter finding supports other
studies that have shown Arizona to be a second-tier state in the knowledge economy.
In most states, the 2003 industrial mix and occupational mix values were correlated: both
the industrial mix and the occupational mix either were stronger or weaker than the national
average. Alaska was the biggest exception, with a weak industrial mix but the fourth strongest
occupational mix in the country. In some states, the combined effect of the industrial and
occupational mixes had a substantial impact on the average wage (relative to the national
average). As seen in Table 9, job quality in Massachusetts had a positive effect of 14 percent on
its average wage while the job mix in four states had a depressing effect on the average wage of
at least 10 percent.
The strongest job quality in 2003 was in seven states and the District of Columbia that
border the Atlantic Ocean, stretching from Massachusetts to Virginia. Job quality was weakest in
most of the mid-section of the country, stretching from the northern Rocky Mountains through
the Great Plains and the South. In the rest of the country, including most of the West and the
Great Lakes region, job quality varied by state from below to a little above the national average.
Outside of the northern-to-middle Atlantic Coast region, the strongest job quality was in Illinois
and Colorado.
Three of Arizona’s five bordering states, along with Texas, had a job quality figure above
the national average. New Mexico’s figure was somewhat worse than in Arizona and Nevada
had the weakest job quality in the nation.
With few exceptions, the change in job quality between 2000 and 2003 did not vary
substantially by state (see Table 10). Arizona’s change in job quality ranked 39th among all
states even though its value was only slightly negative at –0.3 percent. Arizona compared a little
more favorably relative to the competitor states (seventh) and the new economy states (sixth).

18

TABLE 9
OVERALL JOB QUALITY IN 2003 RANKED BY STATE

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.

District of Columbia
Massachusetts (n)
Maryland (n)
Connecticut (n)
Delaware
Virginia (n)
New York
New Jersey (n)
Illinois
Colorado (c,n)
Minnesota (n)
California (c,n)
Alaska
Texas (c)
Utah (c,n)
Georgia (c)
New Hampshire
Pennsylvania
Michigan
Washington (c,n)
Arizona (c,n)
Kansas
Oklahoma
Missouri
Idaho
Rhode Island

Total
51.2
13.9
8.3
7.8
7.6
6.5
5.9
5.7
5.7
4.8
2.6
2.0
1.9
1.6
0.9
0.8
0.2
-0.0
-0.2
-0.6
-1.6
-1.7
-2.4
-2.6
-2.7
-2.9

Ind
Mix*
20.4
6.5
1.5
4.2
5.2
3.1
4.5
5.0
1.7
2.0
1.4
1.3
-2.5
1.2
1.1
0.4
-1.2
-0.3
-0.2
-0.9
-1.5
-0.3
-1.5
-1.1
-4.1
-2.1

Occ
Mix^
30.7
7.4
6.8
3.6
2.5
3.4
1.4
0.7
4.0
2.8
1.2
0.7
4.4
0.3
-0.2
0.4
1.4
0.3
-0.0
0.3
-0.1
-1.4
-0.9
-1.5
1.4
-0.8

27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.

Ohio
New Mexico (c)
Louisiana
Oregon (c)
North Carolina
Tennessee
Alabama
West Virginia
Nebraska
Wyoming
Kentucky
Indiana
Wisconsin
Maine
North Dakota
South Carolina
Florida (c)
Arkansas
Iowa
Montana
Vermont
South Dakota
Mississippi
Hawaii
Nevada (c)

Total
-3.0
-3.8
-3.8
-3.9
-4.5
-4.7
-5.3
-5.4
-5.6
-5.8
-5.9
-6.7
-7.0
-7.0
-7.2
-8.3
-8.4
-9.0
-9.2
-9.7
-9.9
-11.7
-13.1
-13.8
-18.9

Ind
Mix*
-1.5
-3.7
-1.6
-3.0
-2.6
-2.4
-2.0
-2.6
-2.9
-3.3
-2.4
-2.4
-2.9
-5.0
-2.2
-5.2
-4.9
-2.8
-4.5
-7.4
-5.9
-4.7
-6.4
-8.8
-9.0

Occ
Mix^
-1.5
-0.1
-2.2
-0.8
-1.8
-2.3
-3.3
-2.8
-2.7
-2.5
-3.4
-4.3
-4.1
-2.0
-5.0
-3.2
-3.6
-6.3
-4.8
-2.3
-4.0
-7.1
-6.7
-4.9
-9.9

* Industrial mix: Sum over all industries of (state – U.S. employment share) * (ratio of average wage to
overall U.S. average wage – 1) * 100.
^ Occupational Mix: Sum over all occupations of (state – U.S. employment share) * (ratio of average
wage to overall U.S. average wage – 1) * 100.
c = competitor state, n = new economy state
Source: Calculated from U.S. Department of Labor, Bureau of Labor Statistics, Quarterly Census of
Employment and Wages and Occupational Employment Statistics.

19

TABLE 10
OVERALL CHANGE IN JOB QUALITY BETWEEN 2000 AND 2003
RANKED BY STATE

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.

District of Columbia
Hawaii
Rhode Island
Wyoming
Alaska
Maryland (n)
Oklahoma
Tennessee
Montana
South Carolina
Wisconsin
Connecticut
Kentucky
South Dakota
West Virginia
Vermont
Nevada (c)
North Dakota
Illinois
Mississippi
Georgia
Louisiana
North Carolina
Delaware
Minnesota (n)
Pennsylvania

Total
11.7
4.1
3.5
3.2
3.0
2.2
2.0
1.8
1.8
1.8
1.6
1.6
1.4
1.3
1.3
1.2
1.2
1.2
1.2
1.1
1.0
0.9
0.8
0.8
0.6
0.5

Ind
Mix*
4.4
2.4
1.8
2.5
1.6
1.0
1.5
1.1
2.0
1.3
1.5
0.8
0.9
1.4
1.5
0.2
1.3
1.8
-0.0
1.1
-0.3
1.9
1.0
0.8
-0.8
0.7

Occ
Mix^
7.2
1.7
1.7
0.7
1.3
1.2
0.5
0.7
-0.2
0.4
0.1
0.9
0.5
-0.0
-0.3
1.0
-0.0
-0.7
1.2
0.1
1.3
-1.0
-0.2
-0.0
1.4
-0.2

27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.

Idaho
Utah (c,n)
Ohio
Nebraska
Kansas
Oregon (c)
Virginia (n)
Maine
Florida
Indiana
Iowa
New Mexico (c)
Arizona (c,n)
Michigan
Arkansas
Missouri
Alabama
New York
Washington (c,n)
Massachusetts (n)
California (c,n)
New Hampshire
New Jersey (n)
Colorado (c,n)
Texas (c)

Total
0.4
0.4
0.4
0.3
0.3
0.2
0.2
0.1
0.1
0.1
-0.2
-0.2
-0.3
-0.3
-0.3
-0.4
-0.4
-0.9
-1.3
-1.4
-1.9
-2.0
-2.0
-2.1
-2.4

Ind
Mix*
-1.2
-0.4
0.9
1.2
1.0
-1.0
0.1
1.0
1.3
-0.4
1.6
0.7
-0.4
-0.9
-0.5
0.5
0.9
-1.6
-0.2
-2.7
-1.9
-2.1
-1.6
-1.7
-0.5

Occ
Mix^
1.6
0.8
-0.5
-0.9
-0.7
1.2
0.1
-0.8
-1.2
0.5
-1.8
-1.0
0.1
0.5
0.2
-0.9
-1.3
0.7
1.2
1.2
0.0
0.1
-0.4
-0.4
-1.9

* Industrial mix: Sum over all industries of (state – U.S. employment share) * (ratio of average wage to
overall U.S. average wage – 1) * 100.
^ Occupational Mix: Sum over all occupations of (state – U.S. employment share) * (ratio of average
wage to overall U.S. average wage – 1) * 100.
c = competitor state, n = new economy state
Source: Calculated from U.S. Department of Labor, Bureau of Labor Statistics, Quarterly Census of
Employment and Wages and Occupational Employment Statistics.

20

FACTORS AFFECTING WAGES
Job quality is just one of several factors that affect wage levels. Thus, substantial
differences in the average wage exist across states even after controlling for the effects of job
quality (see the “other” column in Table 11).
Major factors other than job quality that affect the average wage include
• Productivity: the greater the productivity of a state’s workforce, the higher the wages.
• Cost of living: the higher the cost of living, the higher the wages.
• The desirability of the area: the more desirable the area, the lower the wages.
Given the lack of state-level data for each of these three factors and the interrelated nature of
each of these factors, it is not possible to provide much insight into the geographic variations in
the average wage after adjustment for job quality (the “other” column of Table 11).
In Arizona, the value of the average wage after adjustment for job quality was –5.4 in
2003 (factors other than job quality caused the state’s average wage to be 5.4 percent less than
the national average). Most likely, the state’s low figure in part reflects the perceived desirability
of the area (mostly due to climate and strong employment growth) among workers elsewhere in
the country (and in other nations). However, the state’s productivity (after adjusting for job
quality) could be below average and the limited data available on living costs suggests that the
state’s cost of living was marginally below the national average in 2003.
Though considerably below the national average at –5.4, the state’s adjusted average
wage was 29th highest in the nation in 2003. It ranked eighth among the competitor states and
10th among the new economy states. Only 14 states had a positive value, but this includes large
positive values in some of the most populous states, including New York, New Jersey, and
California. Most of the states with positive values are located along the Pacific or Atlantic coasts.
The largest negative values were in the northern Rocky Mountains/Great Plains region, followed
by the South. Arizona’s value was typical of southwestern states, but was much lower than in
California and Nevada. After adjusting for the change in job quality, the change in Arizona’s
average wage between 2000 and 2003 was a modest 0.2, ranking 21st in the nation and seventh
among both the competitor and new economy states.
While both the average wage and the average wage adjusted for job quality are affected
by the cost of living, geographic variations in living costs are not the only factor causing the
average wage figures to vary by state. Thus, even if reliable cost-of-living indexes were available
by state, it would be misleading to fully adjust the average wage figures by the cost-of-living
indexes. Academic research has suggested that 40 percent of the variation in average wage can
be attributed to the cost of living.

21

TABLE 11
AVERAGE WAGE AND JOB QUALITY BY STATE

Alabama
Alaska
ARIZONA (c,n)
Arkansas
California (c,n)
Colorado (c,n)
Connecticut (n)
Delaware
District of Columbia
Florida (c)
Georgia (c)
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland (n)
Massachusetts (n)
Michigan
Minnesota (n)
Mississippi
Missouri
Montana
Nebraska
Nevada (c)
New Hampshire
New Jersey (n)
New Mexico (c)
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon (c)
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas (c)
Utah (c,n)
Vermont
Virginia (n)
Washington (c,n)
West Virginia
Wisconsin
Wyoming

Wage@
-14.4
6.1
-7.0
-22.4
12.5
4.5
23.4
6.9
55.8
-10.5
-3.3
-6.4
-18.2
5.4
-10.4
-16.8
-13.0
-14.4
-17.2
-14.9
8.5
21.3
5.1
3.7
-25.5
-8.9
-24.3
-15.7
-6.8
-1.2
18.2
-15.7
20.6
-9.6
-22.9
-5.4
-18.8
-5.1
-2.8
-0.6
-16.4
-24.9
-11.5
-4.0
-12.8
-11.4
2.2
6.3
-20.4
-8.6
-17.2

2003
Ind Mix*
Occ Mix^
-2.0
-3.3
-2.5
4.4
-1.5
-0.1
-2.8
-6.3
1.3
0.7
2.0
2.8
4.2
3.6
5.2
2.5
20.4
30.7
-4.9
-3.6
0.4
0.4
-8.8
-4.9
-4.1
1.4
1.7
4.0
-2.4
-4.3
-4.5
-4.8
-0.3
-1.4
-2.4
-3.4
-1.6
-2.2
-5.0
-2.0
1.5
6.8
6.5
7.4
-0.2
-0.0
1.4
1.2
-6.4
-6.7
-1.1
-1.5
-7.4
-2.3
-2.9
-2.7
-9.0
-9.9
-1.2
1.4
5.0
0.7
-3.7
-0.1
4.5
1.4
-2.6
-1.8
-2.2
-5.0
-1.5
-1.5
-1.5
-0.9
-3.0
-0.8
-0.3
0.3
-2.1
-0.8
-5.2
-3.2
-4.7
-7.1
-2.4
-2.3
1.2
0.3
1.1
-0.2
-5.9
-4.0
3.1
3.4
-0.9
0.3
-2.6
-2.8
-2.9
-4.1
-3.3
-2.5

Other#
-9.1
4.1
-5.4
-13.4
10.5
-0.3
15.6
-0.7
4.6
-2.0
-4.1
7.4
-15.6
-0.3
-3.7
-7.5
-11.4
-8.6
-13.4
-7.9
0.3
7.3
5.3
1.1
-12.3
-6.3
-14.6
-10.1
12.1
-1.4
12.6
-11.9
14.7
-5.1
-15.7
-2.4
-16.5
-1.2
-2.7
2.3
-8.0
-13.2
-6.8
-5.5
-13.7
-1.6
-4.3
6.9
-15.0
-1.6
-11.4

Wage@
0.9
-1.7
-0.1
1.4
-1.1
-0.9
0.8
2.2
9.8
0.8
0.4
1.6
-2.2
0.3
0.1
0.2
-0.0
0.8
1.0
1.3
3.4
0.3
-0.9
1.7
0.1
-0.1
1.1
1.8
1.7
1.3
-1.8
0.9
-1.0
0.5
1.8
0.3
0.8
-1.1
0.2
3.5
0.6
0.7
0.9
-1.2
0.5
2.4
1.9
-1.7
0.7
0.8
2.4

(continued on next page)

22

2000-to-2003 Change
Ind Mix*
Occ Mix^
0.9
-1.3
1.6
1.3
-0.4
0.1
-0.5
0.2
-1.9
0.0
-1.7
-0.4
0.8
0.9
0.8
0.0
4.4
7.2
1.3
-1.2
-0.3
1.3
2.4
1.7
-1.2
1.6
-0.0
1.2
-0.4
0.5
1.6
-1.8
1.0
-0.7
0.9
0.5
1.9
-1.0
1.0
-0.8
1.0
1.2
-2.7
1.2
-0.9
0.5
-0.8
1.4
1.1
0.1
0.5
-0.9
2.0
-0.2
1.2
-0.9
1.3
-0.0
-2.1
0.1
-1.6
-0.4
0.7
-1.0
-1.6
0.7
1.0
-0.2
1.8
-0.7
0.9
-0.5
1.5
0.5
-1.0
1.2
0.7
-0.2
1.8
1.7
1.3
0.4
1.4
-0.0
1.1
0.7
-0.5
-1.9
-0.4
0.8
0.2
1.1
0.1
0.1
-0.2
-1.2
1.5
-0.3
1.5
0.1
2.5
0.7

Other#
1.3
-4.6
0.2
1.7
0.8
1.3
-0.8
1.4
-1.8
0.7
-0.6
-2.5
-2.6
-0.9
0.0
0.4
-0.3
-0.6
0.1
1.1
1.2
1.7
-0.5
1.1
-1.0
0.3
-0.7
1.6
0.5
3.3
0.2
1.2
-0.1
-0.3
0.6
-0.1
-1.2
-1.3
-0.3
-0.0
-1.2
-0.6
-0.9
1.2
0.1
1.1
1.8
-0.4
-0.6
-0.8
-0.8

TABLE 11 (continued)
@ The percentage difference in the average wage from the national average, calculated as the mean of
the differences from the industrial and occupational databases.
* Industrial mix: Sum over all industries of (state – U.S. employment share) * (ratio of average wage to
overall U.S. average wage – 1) * 100.
^ Occupational Mix: Sum over all occupations of (state – U.S. employment share) * (ratio of average
wage to overall U.S. average wage – 1) * 100.
# Average wage minus the industrial mix minus the occupational mix. Reflects factors such as
productivity, quality of life, and cost of living.
c = competitor state, n = new economy state
Source: Calculated from U.S. Department of Labor, Bureau of Labor Statistics, Quarterly Census of
Employment and Wages and Occupational Employment Statistics.

23