Governor Ducey loves to talk about businesses fleeing states with high business taxes and onerous regulations to come settle in Arizona. It hasn’t worked out exactly as planned. Our U-Haul lots aren’t overflowing with moving trucks carrying California businesses here, though we’ve seen a bit of an economic upswing lately. That includes high tech businesses from Silicon Valley setting up outposts or situating in Phoenix. But according to a New York Times article, their primary reasons for moving here aren’t our business-friendly taxes and regulations. The more important reason is, Silicon Valley is crowded and expensive, and by comparison, Phoenix is wide open and cheap.
As start-ups across San Francisco and the Silicon Valley try to contend with high salaries and housing costs, many are expanding to lower-cost cities in the West. . . . For Phoenix, which is about a 90-minute flight from San Francisco, the Bay Area’s loss is its gain.
That doesn’t mean businesses are deserting Silicon Valley for Phoenix, however. New tech jobs are being added in both places.
At the end of last year in the Bay Area mega-region — including both the San Francisco and San Jose metropolitan areas — there were 530,000 tech and engineering jobs, a 7 percent increase from a year earlier. Phoenix has about one-fifth as many tech jobs, but the total grew 8 percent from a year ago, according to Moody’s Analytics.
According to the Times article, Phoenix is something of a newcomer in tech job growth compared to other areas of the country. When it comes to the percentage increase in tech jobs from 2010 to 2015, Phoenix ranks 14th with an 18.6 percent increase, compared to a whopping 71.6 percent increase in San Francisco, a 28 percent increase in Charlotte, North Carolina, a 27.3 percent increase in Boston, a 27.2 increase in Detroit and a 22 percent increase in Salt Lake City. Phoenix may be adding tech jobs, but not at a breakneck pace.
Lower business taxes may figure into the high tech equation, but the perks in lower costs for businesses and employees rank far higher. An example:
Housing [in Phoenix] is much cheaper [than in Silicon Valley]. The median home price in the Phoenix metropolitan area is $221,000, according to Zillow. In San Francisco, it is $812,000.
For Ms. Rogers and others, that is a far bigger perk than an extra vacation or a raise in California. Instead of renting a rundown house in Redwood City and commuting an hour or more to work, she now lives 10 minutes from the office in a house that is twice the size — with mortgage payments that are half the cost of her California rent.
It helps, of course, that Phoenix built a light-rail system and has revitalized its downtown, making the city a more attractive place for young high tech workers to live. The light rail didn’t come cheap, of course. It was built with new taxes, not tax cuts. Some added tax dollars to improve our schools, our roads and other social and infrastructure needs we’ve left unaddressed would be a stronger draw for new businesses than a few dollars cut from their tax bills.
This article appears in Aug 18-24, 2016.
Uhaul trucks are not used to move high tech firms. What low tech thinking. You are really stuck aren’t you?
No amount of tax dollars confiscated by Tucson liberals will ever increase business given the rabid hatred for corporations and radical environmentalist anti-growth policies.
The Phoenix area spent billions building a world class road system, freeways, and it’s paying off big time. Tucson spent hundreds of millions deliberately NOT building roads.
No growth = no jobs = no future.
Why won’t Tucson liberals ever accept responsibility for their total control over the last 30 years? And why do liberals like this blogger who have absolutely no business education credentials nor work experience continue to think they know anything about economics?
And when will Tucson hold Tom Volgy responsible for killing commercial air traffic in Tucson when he gave away exclusive rights to the Tucson-Phoenix route?
Weird. Forbes has rated the Phoenix Metro area as their #1 city in winning the tech job growth outside of the Bay Area/Silicon Valley. This includes, from their data, a 39.29% increase in these jobs from 2010-2016. It also includes a growth rate in this sector of 7.51% for just 2015. That 39.29% growth is the 3rd highest in the nation.
Since 2000 the tech sector has grown by 78% in the Phoenix metro area.
Why the discrepancy? This might have to do with how we define a geographic area or we define tech sector jobs. We all know that from common sense ‘Phoenix’ also includes the cities around it like Mesa, Tempe, Glendale, Scottsdale, etc. You can get any kind of result you want by selectively removing these parts of the metro Phoenix area from the equation. Your data comes from the NYTimes, who took it from Moodys, and did not provide a link. So it is impossible to see how they defined their geographies or the ‘tech sector’.
I don’t disagree with your premise that these companies are moving to Phoenix because of the cost of living, that is a big part of it among many others, but this really is just a sad hit piece on Phoenix, and you can’t even do the slightest research of your own! That makes this another piece of evidence highlighting your superior skills as a hack David. Keep it up!
The false facts that Wrong, Again actually believes + The nonsense that he actually bothers to post = Dumbshit
Thanks AZ/DC because I also believe what whatagain stated. To think anything else would be folly. Just look at what they do and don’t do. Phoenix is light years ahead. They have higher home values and lower property taxes. We have been forced to try to develop a future by isolating ourselves from reality.
Your post accomplished nothing but name calling.
What is this clown thinking?:
Obviously, you’re not familiar with Wrong, Again and his history of posting flat-out nonsense on this site…or you’re him doubling-down on the trollness (is this a word?) he/you (?) specializes in. It’s hard to tell if either of you are actually different people because neither of you have the stones to establish an account on this site.
Wrong, Again ALWAYS blames the “illegals” and the “evil liberals” for everything he sees wrong with Arizona. He, like yourself, thinks that Phoenix is “light years” (Ha Ha Ha Ha!) ahead. Sure, they have an edge on Tucson in certain ways, but not because of the foolish reasons Wrong, Again or yourself may see as the “truth”.
Open your eyes, or if you’re like or if you are Wrong, Again…get your head out of your nether regions. Phoenix and the surrounding areas get more work done with AZDOT and with business opportunities because that’s the area where most of the greedy fat cats who stuff the politicians’ pockets reside. It’s been that way for a long time, so it’s time for you short-sighted trolls to notice it.
Bonus!: https://m.youtube.com/watch?v=Eglgj77T0rk
What exactly are you promoting? You talk about trolls or trolling, but when I look at your comments, you are the one doing the trolling. If Tucson were perfect why waste your time coming here? Get out and enjoy it. Insulting others serves little or no purpose. Why be content with accomplishing little? Many of us are struggling and choose not to live in Phoenix. Tucson has it’s fat cats and they like it just the way it is. Cheap labor and little progress. Why is that?
Clown:
Who says I’m not out enjoying what Tucson has to offer on? There’s this new technology called a smart phone. Get your head out from down below before you suffocate.
Sure, Tucson has fat cats, but there is definitely more of a sense of community in this town than Maricopa County could even imagine. Around here, it’s more of a team effort; up there, it’s all about me and what I can do for myself.
And do you believe that Maricopa County doesn’t have their fair share of poor people? Please, remove the blinders before it’s too late.
Speaking of smart phones, I really wanted to edit my most recent post…but my phone vexed me!
“…what Tucson has to offer ON.” Really?!
D’oh!
Have a nice day.
I referred to Wrong, Again as a “gift” and my comment got removed.
I must have offended the poor dear.
You poor, sensitive dear.