Fast-growing Phoenix, like Atlanta, slows to a halt

By Maria Saporta

Back in 1950, Phoenix was the 57th largest metro area in the country. But six decades of growth have made Phoenix the 12th largest metro area in the United States, not far behind Atlanta, which ranks as 9th.

After World War II, several electronics firms moved their operations to the Phoenix area, creating a strong manufacturing base. Then the growth started coming along with a housing boom that helped make the Arizona city one of the fastest growing metro areas in the country.

Not so long ago , Phoenix was the second fastest growing metro area in the country. And then the economic downturn of the last couple of years brought everything to a screeching halt.

“We went from second to 48th,” explained Elliott Pollack, an economist and economic development leader from Phoenix. “We have gone from 63,000 new housing permits in 2005 to 8,000 last year. So how do you go back from 48th to second? It’s a long road.”

Pollack gave a presentation to about 100 Atlantans attending the annual LINK trip, which is in Phoenix this year from April 28 to May 1.

Tony Landers, coordinator of LINK trip, talks to Atlanta City Council President Ceasar Mitchell and DeKalb CEO Burrell Ellis during reception

Tony Landers, coordinator of LINK trip, talks to Atlanta City Council President Ceasar Mitchell and DeKalb CEO Burrell Ellis during reception

It’s not as though Phoenix hasn’t experienced downturns before. Pollack said the area lost about 17,600 jobs during the recession of 1975. But when all is said and done, Pollack believes about 300,000 jobs in the Phoenix area will have lost during this recession.

“The next two years are going to be a whole lot better than the last two years, but that’s because the last two have been horrendous,” Pollack said. “What’s happening in Phoenix now is unprecedented.”

Terry Lawler of Regional Business Coalition, Stacy Patton of Minerva USA and Steve Cover of HOK at the Arizona Biltmore

Terry Lawler of Regional Business Coalition, Stacy Patton of Minerva USA and Steve Cover of HOK at the Arizona Biltmore

In many ways, Phoenix is much like Atlanta — business friendly cities in the SunBelt that have enjoyed a surge in population until the economy went sour.

Now Pollack said the region is focused on trying to build the economy of the future, which he believes will include solar research and manufacturing as well as other environmental technologies.

Atlanta City Councilman Ceasar Mitchell visits with Southface's Dennis Creech and DOT board member Dana Lemon

Atlanta City Councilman Ceasar Mitchell visits with Southface's Dennis Creech and DOT board member Dana Lemon

“We don’t want to pick the winners and losers,” he said. ”We just want to make ourselves as attractive as we can.”

Arizona also is looking to siphoning off some companies now based in California, arguing that those companies will still have access to the 8th largest economy in the world.

LINK delegation is staying at the Arizona Biltmore

LINK delegation is staying at the Arizona Biltmore

Asked about the state of the relationship between the Greater Phoenix area and the Arizona state government, Pollack said that the power continues to be overly concentrated in the more rural parts of the state.

But the Phoenix area accounts for about 75 percent of the Arizona economy and population, a situation that is not too different from metro Atlanta’s relationship with the State of Georgia.

The front of the historic Arizona Biltmore, inspired by architect Frank Lloyd Wright

The front of the historic Arizona Biltmore, inspired by architect Frank Lloyd Wright

“The rest of Arizona could disappear and nobody would notice it for weeks,” Pollack said half-jokingly.

One silver lining in the collapse of the housing market is that as home values have fallen, they’ve become more affordable. A recent study showed that now about 87 percent of the households actually could afford to buy a home, Pollack said.

After the session, several Atlanta leaders remarked on the similarities between Phoenix and Atlanta in terms of their tremendous growth over the past several decades and the toll that this recent recession has had on both regions.

Clayton's Eldrin Bell, developer Emory Morsberger, Gwinnett's Charles Bannister and  Bill Russell, owner of a landscape company

Clayton's Eldrin Bell, developer Emory Morsberger, Gwinnett's Charles Bannister and Bill Russell, owner of a landscape company

But several Atlanta leaders also expressed some relief that they were in a state that rivaled Georgia in terms of being in a negative spotlight. The Phoenix area is in total turmoil over the controversial and restrictive immigration bill that the Arizona governor signed last week.

Three county chairman in lobby of Arizona Biltmore - Gwinnett's Charles Bannister, Fayette's Jack Smith and Cherokee's Buzz Ahrens (standing)

Three county chairman in lobby of Arizona Biltmore - Gwinnett's Charles Bannister, Fayette's Jack Smith and Cherokee's Buzz Ahrens (standing)

Already there have been major protests in the streets of Phoenix and several national conventions have canceled bookings in Arizona. Again, it was reminiscent of when Georgia was under the national spotlight for having a state flag with the battle emblem of the Confederacy.

Pollack said this is not the first time Phoenix and Arizona have been deluged with bad national press. Arizona was the last state in the nation to actually make the Martin Luther King Jr. Day a holiday.

“All the effects were transitory,” Pollack said, adding that growth resumed in short order. That’s what he believes will happen with the immigration bill. In six months, it will be forgotten.

Maria Saporta, Editor, is a longtime Atlanta business, civic and urban affairs journalist with a deep knowledge of our city, our region and state.  Since 2008, she has written a weekly column and news stories for the Atlanta Business Chronicle. Prior to that, she spent 27 years with The Atlanta Journal-Constitution, becoming its business columnist in 1991. Maria received her Master’s degree in urban studies from Georgia State and her Bachelor’s degree in journalism from Boston University. Maria was born in Atlanta to European parents and has two young adult children.

13 replies
  1. LC says:

    Glad to know my tax dollars are going to retreats at swanky desert resorts …

    I’m sorry, but Atlanta has enough issues. I don’t care about Pheonix (yet other city that is horribly unsustainable in terms of climate and geography. Get back to City Hall and fix the mess we have please!Report

  2. Yr1215 says:

    I wouldn’t be 100% sure this is paid for by tax dollars. It would be interesting to know if it is, or is not. Given the attendees, I don’t think this is funded by tax dollars.

    Either way, I’m glad they went. It makes for a more educated government.Report

  3. William Cormier says:

    Phoenix and Atlanta are indeed extremely sad stories, however, I believe that Atlanta has been hit far worse than Phoenix. The bad press that Phoenix has received in regard being the kidnapping capitol of the United States is bound to have a negative impact on those whom consider moving to that area or even relocating businesses. (IMO)

    Atlanta has been devastated by the outsourcing of American jobs. Washington refuses to address this issue and behind the scenes are promising nations such as India that the United States will not harm their extremely profitable outsourcing sector(s). This is a subject that receives very little press even though it is responsible for our “jobless recovery.”

    When will Americans rise up and have their voices heard? We witness the devastation that has hit Phoenix and Atlanta, yet almost nothing is being done in Washington to address this issue. Our complicit, corporate owned Mainstream News Media aids and abets the politicians and even President Obama by refusing to address why our economy remains stagnant and only Wall Street is profiting while Main Street is withering and dying right before our eyes.

    “We the People” deserve better than that! It’s high time that the MSM quit pandering themselves to their corporate master’s/politicians in Washington and address the issues that most concern the majority of the American people. We used to think that the Soviet Union (past tense) and Communist China were obvious examples of societies that were blinded by disinformation and propaganda – and now, in these United States, we suffer from exactly what our government condemns on a global basis. Those who look upon these hypocritical allegations from other nations know our MSM is corrupt and controlled by corporate interests, laugh at us behind our backs, and the bulk of our population haven’t a clue has uninformed they are…

    The truth will set us free but remains as elusive as the proverbial pot of gold at the end of the rainbow.Report

  4. Yr1215 says:

    William – I agree with the sentiment of your statement (ie, the concern for main street), but I don’t agree entirely with the causes.

    India is not the problem, China is. And trade is as much tied to the unemployment issue as technological improvements are. Ie, technology improves productivity, meaning you need fewer people to do the same thing. This is as true in the service industry as it is in the manufacturing industry. But I don’t think anyone is against technological progress as well as the higher incomes and higher standard of living that result from higher productivity.

    The solution isn’t to turn into a more communist nation and stop trade (although the necessary bank bailouts disgust me as well), but rather, we need to improve our efforts on the education and job re-training front.

    Education and job retraining (and a balanced federal budget, better tax code, and China currency revaluation) are the answers to the problem of America’s unemployment.Report

  5. Yr1215 says:

    William, let me also recount a story from the late brilliant economist Milton Friedman, which illustrates a point that you may not understand.

    Milton Friedman used to tell this story about his 1960’s trip to China.

    The Chinese government proudly showed off a large public works project. “We are building a canal, look at this progress.” They were building the canal with… shovels.

    Friedman asked: “Why aren’t you using earth-moving equipment?

    They said: “Oh, this is a jobs program, we need to keep these men employed”.

    Friedman asked: “Then why don’t you give them spoons instead of shovels?”Report

  6. William Cormier says:


    The problem is complex and hard to address by comments that span just a few paragraphs. Yes, China is one of our main concerns, however this is a beast that was cultivated and created by greedy corporations that value profit over the health and welfare of our own nation. In 2004, when our economy was booming, I predicted that our economy would crash, addressed the concerns that outsourcing so much of our light and heavy manufacturing to China would pose national security issues, and for my efforts, I was labeled as “over-reacting” and a “conspiracy theorist.” Frankly, I wish I had been wrong..

    I wrote a series of articles on China and Wal-Mart, provided substantiation of the many problems they would cause, and sent all of them to Washington in an attempt to bring attention to a trend that was bound to negatively impact our economy and national security, all to no avail. When you love your country, it’s extremely hard to witness actions that bring about our own demise – and even worse when all but a few remain blinded to the truth. Freedom is not free; the underpinnings of our democratic republic and maintaining this fragile democracy are dependent on a free press and one that protects and serves the American people.

    Americans love freedom. When the essence of freedom and liberty are challenged, and the public is informed, throughout history we have risen up and demanded change. When the public is kept in the dark, it’s almost impossible to rouse them from their sleep. Knowledge and truth represent power. Whenever critical events, truth and knowledge are hidden and/or distorted from any free society, it is only then that they they can be enslaved and/or subjected to an ideology that harms the majority of its citizens. It’s fascinating to witness people voting against their own interests – and unfortunately, it has been happening with a regularity that is both disturbing and frightening.

    America’s middle-class is all but destroyed (Recent report by the Pew Research Center) and there is no end in sight. We as a people have to demand that our corporations and Washington address this issue and develop solutions that strengthen our economy and formulate a strategy that will not weaken our allies but guarantees that we remain strong without selling our economic lifeblood to foreigners that use our own technology and profits against us. I do not pretend that I have the answers, but recognize the issues that our government and corporate America seem bound and determined to sweep under the carpet rather than addressing the real issues that are destroying the American Dream.Report

  7. Yr1215 says:

    I advocate people voting against their own interests on a regular basis. I think its great, and very American, when rich people vote for the party that wants higher taxes. Equally, and probably more more inspiring, is when those that are less wealthy vote for smaller government and fewer entitlements.

    These people understand that transferring wealth doesn’t create wealth. I’m all for supporting the destitute. But the middle class (upper, lower, and real middle) are going to have to start pulling more of the tax weight. Almost all the taxes are paid by the top 5% income earners. Someone has to pay for the government if you want one, and it can’t just be the rich because as is accurately pointed out, if you want to balance the budget just by higher taxes on the rich, taxes have to go to 95% – meaning everyone quits working.

    I don’t share your view on what I will call a conspiracy theory about corporate interests taking over the world. If that were the case, Barack Obama would not have been elected. In addition, B.O. has been pushing the China issue harder than any recent president, for good reason.

    William, I just think your paradigm view of the world is incredibly flawed. You seem to think someone can decree something to make it happening (like somehow forcing people to not vote against their financial interests). This opinion is actually very dangerous and rooted in despotism. Good luck with it, I’m glad I live in a democracy.Report

  8. William Cormier says:

    Why in the world are you assuming that those are my views? I support a flat tax, not one that has the elites and wealthy shouldering the burden for the poor. By outsourcing countless millions of American jobs over the past decade, greed has greatly reduced the tax base in this nation and now millions of people who once paid their fair share in income taxes are barely able to feed their families. I also believe that a flat tax with zero loopholes, applied to ALL Americans would effectively address the inequities in the tax code.

    I also support a much smaller government. At the rate that government is growing and our tax base is shrinking, the present growth cannot be sustained – and it is contributing to the financial woes that all of us are experiencing.

    As far as corporations taking over the world, those were your words, not mine. I do believe that Corporate “welfare” has to stop, and I vehemently disagree with the recent SCOTUS decision that allows corporations to spend as much as they want in an attempt to elect public officials that are sympathetic to the views of corporations rather than the people themselves. Fascism is defined as the marriage between corporations and the state. Our Congress bends over backwards to please corporate interests. How many times have we seen our Congressmen go to Washington and as soon as they get there, backtrack on their campaign promises and adopt a “corporate friendly” agenda that is a complete reversal of their campaign promises? IMO, lobbying is nothing more than a legalized form of bribery. Few people would disagree that corporations have far more influence in Washing than “we the people.”

    I find it remarkable that you twisted my beliefs into something that you could bash rather than taking me at face value, which is a hallmark of the deception and political spin that we have been witnessing and is continuing to escalate as Americans are beginning to demand that government do something that directly benefits the people rather than big business.

    BTW, how is that I, a layman, was able to predict the collapse of our economy way back in 2004 – and identify the reasons it would collapse? Critical thinking and logic is the basis for my remarks, not politics, and certainly not the notion that the wealthy should support those who are less fortunate. You’ll have to excuse my obvious resentment, but that was about as far off of my beliefs that anyone has ever stated, and it’s a shame that you choose to reply with deception rather than truth.Report

  9. Yr1215 says:

    WC – apologies. It’s pretty rare that people are anti-business (or corporations) but pro-wealth and pro-capitalism. Not impossible or necessarily irrational, just seemingly rare. Anyway, good luck.Report

  10. William Cormier says:

    Thank you – but please allow me to state one more thought. I am NOT against businesses and corporations. In fact, I am an avowed capitalist, owned several of my own businesses and worked for several Fortune 500 Corporations.

    I am, however, a proponent of American businesses and corporations, and I support American jobs and an effort to keep Americans at work, not foreigners that are profiting from our unabated greed. Our younger generation don’t remember that Wal-Mart Corporation, whom spear-headed the rush to outsource American jobs when Sam Walton passed away made his corporation the powerhouse it was by advocating the sale of American products in his stores. The “buy American” theme was one of Sam’s passions, and he proved that American companies could grow and prosper by being patriotic and purchasing American products.

    I believe in our rule of law, and also believe that 99% of our problems could be revolved if Washington would simply enforce our own laws. That would solve the issue of predatory corporations, monopolies, which are in direct conflict of our anti-trust laws, and a host of other issues, including the immigration debate and a plethora of issues that are plaguing our society. If a law is unconstitutional, it can be brought in front of SCOTUS and declared unconstitutional, but other than that, selectively enforcing the rule of law is wrecking havoc on our nation and society in general.

    I also believe that corporations should concentrate on building up America, not other nations who seem as grateful for our help as if though we had sent the plague to their nations rather than our wealth. In short, I support the American people and American businesses and hope against hope that common sense and decency will prevail against greed and the trend of treating profit as the ultimate God that directs so many CEO’s that are outsourcing our health and welfare to other nations at the expense of our own country.Report


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