Tag Archives: employment

Tumbleweed Logo

Tumbleweed Center Relocates Phoenix Headquarters

Tumbleweed Center for Youth Development will expand and relocate its headquarters from Downtown Phoenix to Siete Square II, 3707 N. 7th St. in Midtown, according to Cushman & Wakefield of Arizona, Inc.

Tumbleweed was established in 1972 with a mission to provide a safe space for collaborating with youth and young adults in the community who are vulnerable or experiencing homelessness.  The organization serves more than 3,000 young people each year, ages 12 to 25 years.

“Tumbleweed made a very shrewd decision to expand and relocate its headquarters at this time, locking in to today’s historically low rates.  This allowed us to lower occupancy costs over the long term,” said Paul Andrews of Cushman & Wakefield.  “This strategy cut thousands of dollars in future rent expense that now can be redirected back into the organization’s much needed programs that serve Metro Phoenix’s teenage youth.”

The local non-profit has leased 13,047 square feet at the garden office complex and will locate from 1419 N. 3rd Street in fall of 2013.

Siete Square II is one of four buildings within the larger Siete Square garden office complex.  The Indiana Farm Bureau owns Siete Square II.  Paul Andrews of Cushman & Wakefield of Arizona, Inc. represented Tumbleweed Center for Youth Development in its lease negotiations.

Phil Breidenbach and Lindsey Carlson of Colliers serve as exclusive leasing agents for Siete Square II, representing the Indiana Farm Bureau.

Morrow_Donald-cut

Donald Morrow Joins Marcus & Millichap

Marcus & Millichap Real Estate Investment Service has named Donald Morrow regional manager of its Phoenix office.
“Donald’s many years of experience in leadership roles within the commercial real estate industry will make him an extremely valuable resource for our agents and clients,” says John J. Kerin, president and chief executive officer of the Phoenix office. “He will strengthen our presence by recruiting experienced investment professionals to join our nucleus of agents in Phoenix and will expand our services to clients throughout the region.”
Prior to joining Marcus & Millichap, Morrow was with Grubb & Ellis Co. for 30 years as an agent, president of the western region and managing principal/partner for the firm’s Phoenix office. During his tenure with Grubb & Ellis, its Phoenix office grew from 49 agents to 80 agents with revenue growth of more than 300 percent. Morrow has also been a partner/owner with Biltmore Holdings, where he was an asset manager and property manager for a 1 million-square-foot institutional-quality office and industrial property portfolio.
Morrow received a Bachelor of Science in business administration from Arizona State University and has been on the advisory board of the Arizona chapter of the Urban Land Institute.

WellsFargoLogo

Wells Fargo Plans 410,000 SF Expansion in Chandler

By Eric Jay Toll, Senior Correspondent for Arizona Builder’s Exchange |

Special to Arizona Commercial Real Estate magazine

 

Wells Fargo unveiled its 410,000-square-foot Chandler campus expansion to a neighborhood meeting in the East Valley September 16. Arizona Builder’s Exchange broke the story Monday night that the bank filed a rezoning application with the city to allow a pair of four-story buildings on the northwest corner of Price and Queen Creek roads in the Price Corridor.

More than 2,500 additional employees will work in the new Wells Fargo buildings, bringing campus employment to more than 5,000 workers.

The bank has selected an architect, but has not named the contractor for the project. A formal announcement with construction schedule is expected shortly. AZBEX reports sources saying the project could cost as much as $90 million.

The building shapes, design and materials are intended to mirror Phase I of the campus. The offices will rise to 64 feet. Three more buildings and parking garages are projected for future phases. The city has not set a hearing date for the zoning. Wells Fargo has not yet announced its construction schedule.

Read the original story here.

 

Eric Jay Toll is the senior correspondent for Arizona Builder’s Exchange. His freelance work appears in a number of regional and national publications, including upcoming stories in AZRE and AZ Business.

SVN-Bella Verde Image

Sperry Van Ness Negotiates $4.4M Sale of Bella Verde Apartments

Neil Sherman and Danny Lee, Principals in the Phoenix office of Sperry Van Ness, negotiated the sale of Belle Verde Apartments at 3030 N. 35th Avenue in Phoenix. Bella Verde closed at a sales price of $4,400,000, or $24,309 per unit, on August 30.
The 181-unit apartment complex is approximately 71,760 square feet and was built in 1978. Bella Verde is a garden style- rental community and is situated on approximately 4.0 acres. This multifamily asset is ideally located near Grand Avenue, I-17 and I-10 Freeways, providing convenient access to many other Phoenix metropolitan cities and amenities.
“This sale of Bella Verde Apartments marks the third successful closing for us on this property since April of 2010,” says Neil Sherman. “The buyer was a perfect fit for this asset, having recently sold a similar smaller property in Central Phoenix.”
Sherman and Lee represented the seller, Sans Souci Apartments, LLKP. The Buyer was represented by Pete TeKampe of Marcus and Millichap.

Madeleine_Wanslee

Wanslee Elected to Gust Rosenfeld Executive Committee

Gust Rosenfeld announced that Madeleine C. Wanslee has been elected to its Executive Committee, the governing body of the firm.

Wanslee is Co-Chair of the firm’s Bankruptcy, Restructuring and Creditors’ Rights Practice Group.  Her practice focuses on creditors’ rights and related state and federal court litigation, including commercial and consumer bankruptcy, loan workouts, foreclosure, deficiency and guarantor actions.  She has handled numerous appeals and has argued a case before the United States Supreme Court.  Wanslee is recognized in the Bankruptcy and Creditor-Debtor Rights Law category of The Best Lawyers in Americaâ and in the Bankruptcy and Creditor-Debtor Rights category of Southwest Super Lawyersâ.  She earned her law degree from Gonzaga University School of Law.

Founded in 1921, Gust Rosenfeld provides legal counsel to individuals, businesses, and governments. Our firm’s attorneys enjoy thriving practices in public law, litigation, finance, real estate, corporate, environmental, employment, creditors’ rights, franchise law, estate planning, and tax. Gust Rosenfeld maintains offices in Phoenix and Tucson.

law

2013 Top Lawyers list: Employment and labor

Az Business magazine’s 2013 top lawyer list was created after the editorial department asked Arizona law firms to nominate their two best attorneys from 16 different categories for consideration. Those nominees were put on a ballot and were voted on by their peers in the legal community and the readers of Az Business magazine to determine the exclusive 2013 Az Business Magazine Top Lawyers list.

Adrian L. Barton
Sacks Tierney P.A.
480-425-2629
www.sackstierney.com
Barton has several labor-related publications, including “Employee Voting Rights: Arizona Employer Obligations,” “Social Networking and the Workplace,” and “Reducing the Risk of Wrongful Termination.”

James L. Blair
Renaud Cook Drury Mesaros, PA
602-256-3020
www.rcdmlaw.com
Blair is his firm’s chair of the Employment Law and Litigation Practice Group and was a contributor to the “Compendium of Significant Employment-Related Case Law and Statutes,” ALFA International, from 2003-2009.

Joseph T. Clees
Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
602-778-3700
www.ogletreedeakins.com
Clees represents employers throughout the United States in discrimination and wrongful discharge cases and labor relations.

Scott Gibson
Davis Miles McGuire Gardner, PLL480-344-0918
www.davismiles.com
Over the years, Gibson has developed a reputation for his uncanny ability to quickly discern the most important issues in a case and to focus on ways to resolve rather than to expand litigation.

Donald Peder Johnsen
Gallagher & Kennedy, P.A.
602-530-8437
www.gknet.com
Johnsen practices exclusively in the area of employment and labor law and has been listed in “The Best Lawyers in America” from 2007-2013.

Pamela L. Kingsley
Tiffany & Bosco, P.A.
602-255-6015
www.tblaw.com
Kingsley’s counseling and advice often includes drafting and analyzing agreements for employment and severance, confidentiality, non-competition, and non-solicitation; policies for sexual harassment and oppressive or violent conduct, drug testing, safety, absences, and disabilities.

Michael D. Moberly
Ryley Carlock & Applewhite
602-440-4821
www.rcalaw.com
Moberly is an elected Fellow of the College of Labor and Employment Lawyers, a national organization established to recognize those attorneys who have distinguished themselves as leaders in the fields of labor and employment law.

Tibor Nagy, Jr.
Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
520-575-7442
www.ogletreedeakins.com
Nagy represents employers in all facets of labor and employment relations law, including discrimination and wrongful discharge cases, wage and hour law, employment contracts and manuals, and labor-management relations.

Stephanie Quincy
Steptoe & Johnson LLP
602-257-5230
www.steptoe.com
Quincy maintains a regular case load of employment litigation matters. Cases include civil rights (race, age, religion, gender and disability), wrongful termination, sexual harassment, defamation, and breach of contract claims.

Deanna Rader
Gordon Rees
602-794-2460
www.gordonrees.com
Rader has extensive experience advising public employers on constitutional matters, personnel issues, student rights, conflicts of interest, open meeting law, due process under the Individuals with Disabilities Education Act, and public records issues.

Lawrence J. Rosenfeld
Squire Sanders
602-528-4886
www.squiresanders.com
Rosenfeld has more than 35 years of experience in the area of employment law and is a fellow of the College of Labor and Employment Lawyers.

Debora Verdier
Sanders & Parks, P.C.
602-532-5760
www.sandersandparks.com
Verdier counsels companies with an eye toward preventing disputes and providing pre-litigation solutions and has experience in defending employers against EEOC charges and in litigating employment disputes.

jobsearchnewspaper

Employers post biggest job gains in 4 years

U.S. employers posted the most job openings in four years in June, a positive sign that hiring may pick up.

The Labor Department said Tuesday job openings rose to a seasonally adjusted 3.8 million in June, up from 3.7 million in May. That’s the most since July 2008. Layoffs fell.

The data follow Friday’s report that said employers in July added the most jobs in five months. A rise in openings could signal better hiring in the coming months. It typically takes one to three months to fill a job.

Even with the increase, hiring is competitive. There were 12.7 million unemployed people in June, or an average of 3.4 unemployed people for each job.

That’s down a bit from May and much lower than the nearly 7-to-1 ratio in July 2009, just after the recession ended. In a healthy job market, the ratio is usually around 2 to 1.

Still, employers have been slow to fill jobs. Since the recession ended in 2009, openings have increased 57 percent. Overall hiring is up only 19 percent.

And openings are still below pre-recession levels of nearly 4 million per month.

Employers added 163,000 jobs in July, the department said last week. That followed three months of weak hiring and eased concerns that the economy was stalling.

Yet the economy has generated an average of 150,000 jobs per month this year, about the same pace as 2011. That’s not enough to rapidly drive down the unemployment rate.

The unemployment rate ticked up to 8.3 percent in July from 8.2 percent in June.

In June, manufacturing, education and health care, and hotels and restaurants all posted more openings. Retailers and state, local and federal government agencies cut available jobs.

The government’s monthly employment report, released last Friday, measures net hiring.

Tuesday’s report, known as the Job Openings and Labor Turnover survey, shows the amount of hiring and firing that takes place in the U.S. each month. It provides more details than the monthly jobs report.

For example, layoffs dropped to 1.8 million in June, from nearly 2 million in May. June’s total is below pre-recession levels and indicates that companies aren’t cutting more jobs, despite sluggish growth.

And the number of people that quit their jobs also ticked down slightly to 2.1 million, from 2.2 million in May. That’s still higher than a year ago, when only 1.9 million people quit.

When more people quit their jobs, it can be a sign of a strengthening job market. That’s because most people quit when they have a new job, usually with better pay. The number of quits is still far below the pre-recession level of about 2.7 million.

Overall, companies hired nearly 4.4 million people in June, down from 4.5 million in May, the JOLTS report showed. At the same time, nearly 4.3 million people were laid off, quit or left jobs for other reasons, such as retirement.

The difference between those two figures is similar to the net job gain that the Labor Department includes in the employment report each month.

steptoe associate

Steptoe Associate Honored For Pro Bono Work

Steptoe associate Kevin Fincel has been named a recipient of the Children’s Law Center Clinic Attorney of the Year Award by the Volunteer Lawyers Program (VLP). The award honors Fincel’s exceptional pro bono service to teens and young adults with limited access to legal services. Justice W. Scott Bales of the Arizona Supreme Court and former Chief Justice Frank X. Gordon, Jr. presented the award to Fincel at the VLP’s For Love of Justice reception on June 13 at the Phoenix School of Law in Arizona.

The VLP, co-sponsored by Community Legal Services (CLS) and the Maricopa County Bar Association, established the Children’s Law Center (CLC) in 1998 to address the unmet legal needs of children. The VLP increases access to the civil justice system for low-income persons by recruiting, training, and mentoring lawyers who extend services to those who cannot be served by CLS due to limited resources. The CLC collaborates with several service organizations for children to increase legal services to at-risk children.

Fincel, a litigator based in Steptoe’s Phoenix office, was recognized for his work with the Tumbleweed Center for Youth Development, a private nonprofit agency founded in 1972 to provide emergency shelter and services for runaway and homeless youth. The mission of the center is to provide a safe space for collaboration with adolescents and young adults in the community who are vulnerable or experiencing homelessness.

Since 2010, Fincel has provided services to teens and young adults who are homeless or have been declared dependent by the courts in a wide variety of matters including emancipation of minors, custody, immigration, employment, and child support. He provides young people with advice and resources that offer opportunities for them to develop their full potential.

For more information on Steptoe associate Kevin Fincel, visit Steptoe & Johnson’s website at steptoe.com.

The Do's and Don'ts of Termination

Letting Go Of Employees: The Do’s And Don’ts of Termination

Letting go of employees is never easy, but there are ways to make the situation as painless as possible

Most employers know that terminations should be handled carefully. However, mistakes in the termination process, even by well-intended employers can, and frequently do, contribute to unnecessary, protracted and expensive litigation. While each termination is different, we offer the following reminders on the “do’s” and “don’ts” of terminations.

Don’t terminate an employee on the spot unless the actions are so egregious that it requires immediate removal from the workplace, such as violence against others. In most cases, consider a suspension first in order to give you some time until you can get everything in order to manage the termination seamlessly.

Do fully understand the details about the incident(s) of misconduct, or of the employee’s performance upon which your decision is based. Oftentimes, the incidents are documented by a supervisor or manager and not the person actually handling the termination. A good pre-termination strategy is to review both the employee’s file, and all relevant policies, practices and agreements to ensure that:

  • The employee either knew, or should have known, that termination could occur for the reason given.
  • The employer followed all office policies and agreements.
  • The employee was not singled out for discharge, but was treated the same as anyone else would have been under those circumstances.


Do review the decision to terminate. Terminations affect not only the employee, they also the employer’s bottom line. Turnover costs include not only severance pay, but also the cost of lost productivity while the position is vacant, recruitment costs, and the inefficiencies of training a new employee.

Don’t ignore the possibility of unexamined bias. Conduct periodic self-audits of your employment decisions, such as promotions, terminations and pay rates to ensure that these decisions do not suggest a pattern of discrimination that may become the subject of litigation.

Do calculate any wages that will be due for work already performed, and have a check prepared. In Arizona, wages may include sick time, vacation time, commissions, bonuses, or any other type of compensation. For involuntary terminations, Arizona law also requires that any wages due be paid within three working days, or at the next regular pay period, whichever comes first.

Don’t go into a termination meeting without knowing what you are going to say. Allow approximately 10 minutes for the meeting, and have an opening statement prepared that will set the tone for the meeting, briefly explain the reason(s) for the termination, and the effective date. Explain any final pay and any severance benefits that will be offered. Explain any continuing obligations to protect confidential information, and address any possible security issues. Provide this information in writing to the employee, since he may not recall the specifics during what may be a difficult experience.

Don’t do it alone. Have a second management person come in and take notes, so you can focus on the conversation. Respect the privacy and confidentiality of everyone involved by meeting in a private area.

Do be honest with the employee. Avoid offering reasons that are inaccurate or untrue. If you do not have any intention of rehiring the employee, don’t suggest it.

Don’t suggest that the decision was unfair or improper.

Don’t insist that the employee sign a severance agreement on the spot, or discourage him from seeking legal advice. Give the employee adequate time to consider the amount being offered, and the associated releases. Otherwise, the validity of the agreement may be subject to challenge.

Do treat the employee respectfully and think about what you can do to ease the transition. An appropriate letter of reference or financial assistance toward outplacement are not only nice gestures, they may even reduce any damages an employee could later claim.

Don’t be impersonal when terminating an employee. By following the advice above, you will be able to be both professional and empathetic.

Do consider consulting legal counsel before terminating an employee. In many instances, a call to legal counsel that understands your business specifically can prevent expensive mistakes.

Most wrongful termination lawsuits can be easily avoided by following these simple do’s and don’ts. Understanding the path that needs to be followed to termination can save any business a lot of pain and financial burden.

downtown Gilbert AZ

Downtown Gilbert Mixed Use Project on Life Support

Phoenix (December 14, 2010) – The Gilbert Town Council has a big decision to make on Thursday with respect to the fate of a proposed downtown mixed use project.

“Heritage Marketplace” is a proposed mixed use development that has long been billed as an important catalyst to revitalization in downtown Gilbert. The 2.7-acre project proposes five buildings comprising a total of 90,000 square feet for office, retail and residential uses. The project may be another unfortunate casualty of the recession which is a huge disappointment considering the 350 jobs and $15 million in annual payroll that town officials estimated to result from the project.  Town officials reported to Council several years ago the essential nature of job creation in any successful downtown redevelopment effort.

A development agreement for the project was executed in 2007 and was since amended last December. The following are some of the key deal points from the agreement:

  • It sets the purchase price of the land at approximately $218,000 per acre.
  • It requires the developer to pay a total of about $1.7 million for the land and an adjacent parking garage.
  • It requires the developer to commence construction by no later than December 31, 2010.
  • It obligates the town to pay $7.6 million for the construction of the 365-space parking structure upon “substantially complete” work on part of Heritage Marketplace.

The Town Council must decide whether to extend the deadline outlined in the agreement or cancel the agreement altogether considering that construction on the project will not commence by its prescribed due date.  To fund the parking garage, the town has already begun the fulfillment of its obligations by selling Public Facility Municipal Property Corporation bonds which do not require voter approval. As a result, the town is paying 5% interest and earning about 1% while the money sits in a bank.  The town maintains that the parking garage remains a vital piece of infrastructure to support future economic growth in downtown Gilbert. The town contends that such a facility helps support the employment densities that will be needed in the Heritage District to make it a viable commercial location.

So now the Town Council has a decision to make. Several options are on the table for this decision, which may involve amending or dissolving the agreement.  The options are as follows:

  • Amend the agreement to extend the construction timeline or to allow the town to build the parking structure before Heritage Marketplace is constructed.
  • Dissolve the agreement and wait until the market improves to advertise the land to a new developer, begin the search for a new development partner, or commence work on the parking structure without a current development partner.

Read more at Livability Law

Arizona Sunset - Future of West Valley

Valley Leaders Join Forces To Envision The Future West Valley

Leadership West LogoOver 100 Valley leaders convened on November 31, 2010 to develop a future vision for the West Valley in an exercise led by Leadership West.  Leadership West is a volunteer-led, non-profit organization that convenes, educates and activates proven leaders in business, non-profits and government to leverage their time, talents and treasures to enhance the quality of life in the West Valley.

Moving AZOne LogoThe “West Valley Reality Check” was free for its participants, thanks to the collaborative effort and partnership between Leadership West and the Urban Land Institute (ULI). The program’s goal was to bring together leaders in government, business, non-profits, environmentalists, educators, neighborhood activists, interfaith groups, tribal and elected officials to focus on a regional approach to shaping our built environment. The event was a continuation of Leadership West’s annual West Valley Summit which was held in March.

By 2050, the Central Arizona region will have an additional 6 million people and 3 million new jobs, many of which will be in the West Valley. This exercise presented the opportunity for Valley stakeholders to influence how the region plans land-use, transportation and infrastructure while sustaining our economy and quality of life.

Leadership West Executive Director, Kathy Knecht kicked off the event by describing the organization as a catalyst for long-term planning in the West Valley.  The Reality Check model was designed by ULI, but this event was the first time where such an exercise was conducted with West Valley stakeholders.  What emerged from the exercise was an overarching theme of municipal and regional cooperation that looks beyond the current economic cycle in preparation for the next wave.

Deb Sydenham introduced the Reality Check model as a great opportunity to work collaboratively and cooperatively to help regions with visioning at least 20 years into the future. Don Keuth presented Valley growth trends and how this exercise will help establish the framework for future growth. Interestingly enough, only about 10 cities across the country have performed this activity but Phoenix is the only city that has done it twice. ULI Arizona’s efforts over the past 3 years have resulted in the “Connected Centers” strategy that promotes growth and prosperity.  These exercises represent a forward-thinking approach to identify a sustainable regional growth scenario and by doing so determine housing types, responsible land uses and a transportation framework.

MapJay Hicks presented the ground rules for the placemaking exercise in which participants use Legos© that represent various levels of housing and employment density and strands of yarn that represent major transportation corridors to identify the region’s growth patterns.  Participants used these tools in their groups to establish a 40-year vision with the understanding of the West Valley’s opportunities and challenges, including jobs, transportation, Luke AFB, higher education and the environment.

By keeping an open mind, being bold and creative and working together to find solutions, the participant groups completed their visioning exercise while maintaining AZOne Reality Check’s guiding principles of preserving open space, supporting current infrastructure by growing along existing corridors, connecting employment and housing with multi-modal transportation, creating new urban centers and infilling currently developed areas, and locating housing near jobs.

The collective group discussed barriers and challenges that might hinder the implementation of these future scenarios as well as policy changes that would be necessary to making the scenarios possible. However, the group clearly identified a need for the West Valley to stay relevant in conversations about regional issues by working collaboratively and speaking as one voice.  Leadership West did not intend this exercise to be the end, but rather the next step in moving this initiative forward by carrying the message back to each respective organization.  The Reality Check exercise provided a forum for West Valley representatives to use regional visioning and planning and discuss how we can promote economic development, plan comprehensive infrastructure, preserve natural resources, create a sense of place in the community, and engage the community and create political will to implement these visions.  Our common goal…leadership.

Vacancy Rising in Phoenix

Vacancy Rising In Phoenix Despite Construction Pullback

Though employment growth will stimulate an increase in retail sales in 2010, the job additions will not be sufficient to prevent the vacancy rate in Phoenix from rising for the fifth consecutive year, according to the latest Retail Research market update from Marcus & Millichap.

Unlike previous years when excessive construction drove vacancy increases, lagging demand has become the anchor on the market. The pace of store closures clearly has slowed, but too few retailers have emerged to open new locations in the vacant space that has amassed. With the vacancy rate nearing its highest level in 20 years, rents continue to fall as tenants exercise the upper hand in discussions with owners.

Rents have yet to settle at a new, lower market level and may not reach their low point until late next year. The upside of reduced rents, however, has been a sharp decline in construction, as many projects simply no longer pencil for developers. After deliveries averaged 5.5 million square feet of new space each year during the past decade, a fraction of that total will come online in 2010.

Although the slowdown in construction represents a positive trend in a market with frequent overbuilding spells, the lack of properties under construction will restrain sales of new single-tenant, net-leased assets. As in other markets around the country, single-tenant properties net-leased to top-rated corporate tenants generate intense bidding when listed. In fact, cap rates for nationally branded drugstores and fast-food properties have fallen about 50 basis points since early this year to around 7 percent, with ground leases commanding even lower first-year returns.

In the multi-tenant segment, buyers have intensified searches for suitable listings, but the ongoing reduction in rents continues to present challenges to arriving at valuations upon which owners and prospective buyers can agree. Current underwriting assumes additional increases in vacancy and further rent reductions, such that cap rates must vary from 10 percent to 11 percent to generate bids. Among specific properties, those with tenants that signed leases at the peak of the market
in 2006 and 2007 invariably face the prospect of re-leasing space at substantially lower rents when leases expire.

2010 Annual Retail Forecast

Employment: Government employment will decline over the second half due to the termination of census jobs and budget constraints at the state and local levels, while private
sector employers will hire conservatively. As a result, total employment will expand 0.8 percent in 2010, or by 13,700 jobs. Last year, 116,000 positions were cut.
Construction: Developers will complete 500,000 square feet of space this year, the lowest annual total in 30 years. In 2009, approximately 2.9 million square feet came online. Planned projects total 28 million square feet, although none has a scheduled start date.
Vacancy: The vacancy rate will increase 70 basis points this year to 12.6 percent, as store closures and a lack of new demand will result in negative net absorption of 721,000 square feet. Vacancy spiked 260 basis points last year and most recently surpassed 12 percent, a level last reached in 1991.
Rents: This year, asking rents will decrease 1.3 percent to $18.11 per square foot, following a 5.5 percent dip in 2009. Effective rents will slide 2.6 percent to $15.13 per square foot, compared with a 9.1 percent drop last year.

close up of arizona employment graph

Employment Statistics

Statistics on employment in Arizona.


To embed this image on your site at 547 pixels wide

87813512

Arizona’s Unemployment Rate Climbs In August

Despite some gains in the governmental sector, the state’s unemployment rate for August rose one-tenth of a percent to 9.7 percent as private sector hiring was flat, according to the Arizona Department of Commerce. Usually, Arizona’s economy generates jobs in August, but last month only 28,000 jobs were created. That was still better than August of 2009.

Most of the seasonal job gains were the result of local schools bringing on 26,000 positions for the start of the academic year. State education added 7,000 jobs, with losses in other government agencies offsetting some of the gains.

The private sector posted gains in five sectors and losses in five sectors for a net decline of 800 jobs. Of the state’s 11 industry sectors, government posted the largest job gains at 29,000. Educational and health services followed government, adding 3,000 jobs. Construction continued to add jobs in August, generating 1,900 and giving the industry a net gain through the first eight months of the year.

The Commerce Department reports that, “Construction employment trends in 2010 indicate stabilization in the industry after 28 months of continuous losses.”

Other sectors creating jobs in August were: professional and business services (1,800); trade, transportation and utilities (1,100); and natural resources and mining (100). The sectors that lost jobs last month were: information (500); financial activities (800); manufacturing (1,400); and other services (2,000).

Leisure and hospitality lost 4,000 jobs last month, which the Commerce Department called “unusual.” With the winter tourism season generally starting after Labor Day, hotels and resorts in the state traditionally tend to ramp up hiring in August.

Year-over-year, the jobless situation in Arizona continues to show improvement. Total nonfarm employment last month was down 0.1 percent. In August 2009, it was down 8.3 percent. Compared to August of last year, four sectors registered year-over-year job gains last month. The professional and business services sector was up 8,200 jobs; trade, transportation and utilities was up 7,700 jobs; educational and health services had a gain of 7,100 jobs: and natural resources and mining posted gains of 1,000.

Around the state, only the Phoenix and Tucson metro areas held steady with their unemployment rates. Other major metro areas in the state posted increases in joblessness. Here’s a look at unemployment around the state:

Phoenix Metro: 8.8%
Tucson Metro: 8.7%
Yuma Metro:    23.7%
Flagstaff Metro:   8.0%
Prescott Metro:   10.2%
LHC-Kingman Metro: 10.9%

E012850

Greater Phoenix Economic Forecast 2011: “Painfully Slow”

The economy may be better in 2011 than it was in 2010, but the road to full recovery will remain long and full of potholes. But hey, it could be worse. It could be 2009.

That’s according to economist Elliott D. Pollack, CEO of Elliot D. Pollack & Company. Pollack was speaking at the Greater Phoenix Chamber of Commerce’s Economic Outlook 2011 breakfast today at the Arizona Biltmore Resort & Spa.

Pollack said population growth in the Valley should settle at 1 percent this year and rise to 2 percent in 2011. Net job growth will contract by 1 percent in 2010 and climb by 2 percent in 2011. Retail sales will increase 1 percent this year and rise by 8 percent next year. Building permits will increase by 20 percent in 2010 before jumping 50 percent in 2011.

In summarizing his 2011 forecast for the Valley, Pollack read a laundry list of good news and bad news:

  • The housing market is at or past bottom, but there are many negatives still trumping a full recovery, most notably slower migration flows.
  • The commercial real estate market is at or past bottom, but recovery will be slow and “take a long time.”
  • Sales tax revenues are no longer falling, but they aren’t growing quickly enough to fix the state’s battered budget.
  • Retail sales have past bottom and there is pent-up demand among consumers, however, those same consumers are still so worried about personal debt that they will continue to curb spending, thus thwarting a big recovery.

While Pollack said the Valley’s economic recovery will be “painfully slow,” he points out that a recovery is indeed underway. For example, the state’s standing in employment growth compared to the rest of the nation is gradually improving — but only after a precipitous decline. In 2006, Arizona ranked second in the nation in job growth; that dropped to 22nd in 2007; 47th in 2008; and 49th in 2009. Up to July of this year, the state had moved up to 42nd in job growth.

Another indication that the Valley’s economy is showing improvement is in the number of economic sectors that have shown net job gains. Of the state’s 12 major economic sectors, five have shown net job gains so far this year (education and health services; trade; leisure and hospitality; professional and business services; other services). That compares to the same time last year, when no economic sectors reported net job gains.

But, Pollack pointed out again, the Valley and state can’t expect the robust and recoveries that have accompanied past recessions.

He says the Valley’s housing market continues to be weighed down by:

  • Weak job growth
  • Tough underwriting standards
  • Negative home equity
  • Loan modification failures
  • High foreclosures
  • Option ARMs (adjustable rate mortgages) peaking in 2011

In terms of equity, 51 percent of houses in the state have negative equity. The national average is 23 percent. Such negative equity severely curtails people’s ability to buy and sell homes. In addition, supply still outstrips demand in the single-family home market, with an excess inventory of houses somewhere between 40,000 to 50,000 units, Pollack said. A balance between supply and demand will not be fully achieved until about 2014, he added.

The picture is bleaker for the commercial real estate market, with delinquencies on loans still very high. In the office market, Pollack cited forecasts from CB Richard Ellis that said vacancy rates would peak at 25.6 percent in 2010 before dropping to 23.9 percent in 2011. As Pollack pointed out, there currently is no multi-tenant office space under construction in the Valley. In fact, he expects “no significant office building in Greater Phoenix for the next five years.”

Industrial space vacancy rates are faring only slightly better, with CB Richard Ellis predicting year-end vacancy rates of 16.4 percent for 2010 before falling to 15.2 percent in 2011. As for the retail market, the vacancy rate will rise to 12.3 percent in 2010 and hit 12.9 percent in 2011.

For office, industrial and retail commercial real estate, Pollack said he did not expect vacancy rates to reach normal levels until 2014-2015.

Still, Pollack maintained that the economic outlook for the Valley “remains favorable,” thanks to the recovering national economy, increased affordable housing in the Valley, a rise in single-family home building permits, unemployment bottoming out, consumer spending improving and continued problems in California.

hr_director_mega_biz

2009 Mega Business HR Director Of The Year Finalists

Brian BoylanName: Brian Boylan
Title: Senior Vice President of Human Resources
Company: JDA Software

Years with company: 4
Years in current position: 2.5
Company established: 1985
No. of employees in AZ: 360
No. of employees in HR department: 12
www.jda.com

Someone must be doing the right thing when a company’s own employees are its most effective tool for recruiting new talent. At JDA Software, that someone is Brian Boylan, senior vice president of human resources.

Boylan is praised for helping establish a culture at the Scottsdale-based technology company that allows employees to succeed professionally and earn recognition for their accomplishments through extensive award programs. Although JDA uses recruitment and assessment tools, ultimately job candidates who interview are impressed by JDA’s culture and the collaboration among its staff members. Employees feed the candidate pipeline by offering referrals for openings.
JDA’s culture is in part created by a performance-management program strongly supported by Boylan. The program emphasizes continuous learning plans, 20 hours of professional development annually and 360-degree reviews centered on leadership skills. Boylan also developed an emerging-leaders program that brings potential company leaders together for development and pairs them with senior-executive mentors.

Boylan and his staff understand that well-rounded employees need balance in their lives. Employees may work from home to take care of personal matters. The human resources department also offers FranklinCovey’s Seven Habits of Highly Effective People seminar to give employees the tools they need to find a balance between work and home. Onsite, JDA provides a wellness program, yoga and a Nintendo Wii game room.

Diversity is another hallmark of JDA’s culture. As a global company, JDA has a presence in many countries with varied cultures, all of which are reflected in the company’s workplace.


Tina HuffName: Tina Huff
Title: Executive Director of Human Resources and Organizational Development
Company: Pro’s Ranch Markets

Years with company: 3
Years in current position: 3
Company established: 1992
No. of employees in AZ: 1,945
No. of employees in HR department: 24
www.prosranch.com

As a growing upscale Hispanic grocery-store chain, Pro’s Ranch Markets takes extra steps to create diversity within its employee ranks and Tina Huff is deeply involved.

As executive director of human resources and organizational development for the Ontario, Calif.-based company, Huff works out of the regional office in Phoenix. Her department coordinates with several nonprofit agencies to provide work opportunities for refugees the organizations resettle in the United States. Huff’s department also offers jobs to Central and South American college students who work summers in the U.S. on visas. Onsite English-as-a-second-language classes are offered through Scottsdale Community College.

With more than 20 years of human resources management experience in several industries, Huff has a variety of responsibilities with Pro’s Ranch. This year, she directed development of the Ranchie Steps Program, which provides job-training modules and establishes compensation structures for each department companywide. This program shows how employees can grow professionally within Pro’s Ranch. In Arizona this year, Huff rolled out a retail management certificate program, tuition assistance, an apprenticeship training program for bakers and the ESL classes.

Pro’s Markets has been growing the past few years, opening two new stores in Arizona and expanding into Texas and New Mexico. Huff worked with the company’s operations and advertising departments to craft a plan for bringing in new staff. An internal talent assessment offers new employment opportunities for existing employees. Job candidates are recruited from local nonprofit and employment associations and through job fairs that attract as many as 5,000 people.

Green Job Opportunities for Women

Green Job Opportunities For Women

Recently, I attended the “Women & the Green Job Movement” panel hosted by the Chandler Chamber of Commerce and sponsored by the U.S. Department of Labor and Zion & Zion.

Our very own Tina Robinson, exhibit director for the Southwest Build-it-Green Expo & Conference, was asked to be part of the panel and speak on various aspects of women employment in the sustainability field. The roundtable was comprised of individuals from various organizations, cities and schools with a vested interest in women and their future in green jobs.

Jenny L. Erwin, regional administrator for the Women’s Bureau of the U.S. Department of Labor, opened the roundtable discussion. Some of the main points covered were:

  • Ensuring green jobs are “good jobs” with benefits and livable wages and career paths.
  • Definitions of green jobs and other common terms that are understandable to a broad range of working women.
  • Information on how women in community-based organizations focusing on women, women business owners, labor unions and others can access funds for green jobs.
  • Best practices related to women.
  • Green jobs that are in demand, new career paths and entrepreneurial opportunities.

The roundtable began with the reason we were all gathered at the event — where do women fit in the green industry? Though the number of green jobs is on the rise, there is indeed a disparity in the quality and quantity of jobs available to men and women. This spurred discussion on why this paradox exists.

One of the main issues women must face as we try to alter this uneven landscape is changing the perception that women can’t hold jobs in male-dominated industries. The math and science-related fields are typically over-represented by men, and changing this will be the first step in encouraging women to enter the green industry.

I left the roundtable discussion with a bright outlook. Green industry jobs vary; some are more technical than others; and there is always room for those who need to market the technology and spread the message to others. Bottom line — there is a huge opportunity for women to capitalize on the amazing benefits the green movement offers. So let’s get to it ladies!

www.chandlerchamber.com
www.builditgreenexpo.com
www.dol.gov/wb/

man with red tie standing in front of Dean's office

CEO Series: Robert E. Mittlestaedt Jr.

Robert E. Mittelstaedt Jr.
Dean, W.P. Carey School of Business at Arizona State University

How is W.P. Carey’s curriculum changing due to the economic crisis?
The curriculum in any business school has to involve some fundamental, timeless subjects that never change. So accounting and some aspects of finance and people management and other things will go on forever, but in every case we have to find a way to adapt to the changes in the external environment, whether it’s societal or specific kinds of business issues. I think that most business schools now are re-thinking seriously their curriculums in light of what has happened in the last couple of years, in particular issues in the areas of risk management, ethics in decision making and globalization … It doesn’t mean that the entire curriculum will change, but we have to find a way to weave those things more into almost everything we teach.

Could business schools have done more to create an ethical climate among corporate executives that could have averted this crisis? Does that argument have any merit?
My experience over many years now tells me that parents have to do more to teach ethical values to their children, and society has to take responsibility for holding people accountable for ethical behavior. Sadly, I have found that in most people, when they cross ethical lines, you find out it’s not the first time and they started doing it early in their life. By the time we get them as undergraduate business students, that’s about the end of the time when you can influence it.

We push hard on ethics from day one, and the students who come into our program hear about ethics on day one from me, and throughout the time that they’re here and they are required to take ethics courses. … This is something that’s a broad societal problem that we have to deal with, and we’re are doing as much as we can in business schools and will continue to put even more emphasis on it, but it’s not something that can be solved just in a business school or just in a university alone.

What are some of the future trends you see for business schools?
I expect to see all business schools more concerned with some of the things that we have been thinking about here at ASU. For instance, whether you believe in global warming or not, it is indisputable that we have to worry about sustainability, simply because of the number of people on the planet. … There are all sorts of things that become different issues where we have society and business interacting, whether we like it or not, in a much more integrated fashion than we have had in the past. … Issues of instant communications, doing business differently than our predecessors did, are very real and have to be part of a curriculum. … All those things find their way into a curriculum, both in terms of changing the way we teach, the kinds of things we teach, the impact they have on individuals.

How would you assess the relationship between W.P. Carey and the Valley business community?
I believe that our relationship with the business community at the W.P. Carey School is quite strong. We have many business leaders that are on our advisory councils, advisory boards to departments, to the whole school; we have many businesses that support us by sending students here to work on their MBAs or even their undergraduate degrees. And we have many business leaders who are not graduates of our school but who believe we have to have a strong business school to help Phoenix grow, and so they support us.

Describe the education industry in Arizona in terms of employment.
Education is a big sector of our society and I don’t believe there are very many people today that would deny that education needs to be there. …  (T)here’s more to learn today and a child today needs to learn more and get to a higher level of knowledge just to be competitive in the work force than they did a generation or two generations or three generations ago. You have to have an education sector that is strong and employs a fair number of people if you’re going to be competitive.The fact that we have gone through a financial crisis and budget cutbacks and furloughs and layoffs means that it’s not different than any other business, and it is in fact a business. It may be state supported, partially in the case of our university, but it is nonetheless a business that is subject to the same kinds of economic whipsaws as other sectors. The difference here is that our students don’t just go away because the economy got worse. In a retail establishment the customers may not show up and you may not have to have as many (establishments) open. We still have 52,000 students showing up on this campus in the fall …

    Vital Stats




  • Dean at W.P. Carey since 2004.
  • Between 1973 and 2004, he served in numerous leadership positions at The Wharton School at the University of Pennsylvania.
  • Author of “Will Your Next Mistake Be Fatal? Avoiding the Mistake Chain That Can Destroy Your Organization.”
  • Earned his bachelor’s degree in mechanical engineering from Tulane University.
  • Served five years as a U.S. Naval officer.
  • Received an MBA from the Wharton School.
  • wpcarey.asu.edu
Motivate Employees

Keeping Employees Motivated In A Troubled Economy Is Critical

The Society of Human Resource Management (SHRM) figures that it can cost up to one-third of an employee’s annual salary to recruit and replace that employee. For the most part, it is to the employer’s advantage to retain and maintain their skilled work force in a tumultuous marketplace.

Uncertain times, family issues and unstable financial situations all compete with the workplace for balance. Couple that with the constant barrage of dismal employment news of company cutbacks, bailouts and failures, and understandably there’s not much motivation left for the workplace. Many people are wondering how secure their job really is and if they need to be on the lookout for the next opportunity.

How do you get your employees to step “up” and stay optimistic when it seems like so many things are falling apart around them? Here are a few quick steps to keep your employees engaged and positive.

Be honest and open
Communication is one of those things that you just can never get enough of — but it does take work. The worst thing you can do for morale is to paint a rosy picture one week, only to have the bottom drop out of their world the following week. No one likes workplace surprises, especially your employees. Regular and transparent communication is essential to maintaining your employees’ trust. Also, remember to let your team members know how much you appreciate them and their personal contributions to the company.

Partner with your workers
Let them be part of the solution. Good old-fashioned brainstorming and suggestion boxes are excellent ways for employers to engage and encourage their employees to use their expertise to help the company reduce costs and increase revenue. Remember to recognize those contributors whose ideas are implemented with either public praise and/or non-monetary perks, such as a certificate or a preferred parking space.

Build up your team
Creating a sense of community does wonders to build team morale. By encouraging positive working relationships through bonding, walls come down and individuals work together toward solutions. Staff development, lunchtime personal growth workshops, community service projects, or even a staff potluck lunch or get-together, are ways to promote team cohesiveness.

Reward creatively
Although a pay raise or some other cash award would be nice, it just may not be feasible for the company right now. But, that shouldn’t stop you from recognizing and rewarding hard work. A covered parking space in the dead of summer in Arizona or in the snowy winter in Ohio certainly is a major perk. A dress-down day when certain business goals are achieved would be welcomed. Even a handshake and “job well done” during a staff meeting can show appreciation without breaking the bank.

Help your employees create work-life balance
Work-life balance seems to be everyone’s hot button these days. Flexible schedules are one way of helping your employees realize it. Depending upon business needs and the employee’s position, flexible schedules can allow your employees to have the work-life balance they need. Telecommuting, job sharing, compact work weeks and flexible start times can be just the motivator the employee needed.

In moving forward, keeping employees motivated is truly a necessity in these uncertain times. Not only will your employees’ motivation be on target, but you’ll see positive results in your ROI as well.

money in vice

The Economic Recovery Begins In 2009, But It Will Be Slow Going

The national and state economies are expected to start feeling the effects of a recovery during the last quarter of 2009. However, the recovery over the next year will be slow, with unemployment continuing to rise and economic growth anemic at best. Meanwhile, the state’s expenditures are rising, even as revenue continues to fall, setting the stage for future budget cuts and an expected tax increase.

That was the consensus forecast unveiled by top economic experts from the W.P. Carey School of Business at Arizona State University and the Arizona governor’s office at the annual Economic Outlook Luncheon on May 20. Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at W.P. Carey and editor of Economy@W.P. Carey, provided an overview of current economic conditions on the state and national level, and offered a forecast for the coming year.
“The economy is going to show some signs of recovery in the last part of 2009, but the way I like to look at this is that lots of our economic indicators will still be underwater in a sense — they just won’t be as far underwater,” he said. “We’ll probably see positive growth in GDP, we will see job losses getting smaller, but there will still be job losses. There will still be people claiming unemployment insurance and, of course, unemployment rates will still be going up.
“It’s going to be a deep, sort of U-shaped recovery and 2011 will probably be a pretty good year of job growth,” McPheters added. 
In the meantime, job losses will continue to mount. In March, with an over-the-year employment decline of 7.1 percent and 136,000 jobs lost, the Valley just edged out Detroit as the weakest large metro labor market in the nation. And even as the economy begins to recover, the Greater Phoenix area will still see its labor market contract by 1 percent in 2010, according to McPheters.
Nationally, McPheters stressed that while the current recession has been painful, it still is not on par with the Great Depression. The Great Depression was marked by four consecutive years of decreases in Gross Domestic Product (GDP), while the current recession is expected to result in four consecutive quarters of decrease in inflation-adjusted GDP. In fact, in the first year of the recession, the national GDP actually increased by 1.1 percent.
“During 2008, the first year of the recession, you would expect that the GDP would be decreasing,” he said. “Well, one of the factors holding it up was exports. Exports continued strong in the United States through 2008.”
This year, however, exports are expected to drop by 10 percent. That’s just one example of how the national and state economies will continue to struggle as the recovery begins to take hold. Another example is the expected freefall in the commercial real estate market, especially in Arizona.
“Commercial is the next shoe to drop and we have seen this pattern before,” McPheters said. “Even as you see residential (construction) begin to pick up, I think you can expect that commercial building is going to be very, very weak all the way through 2010 and probably 2011, because what we need to see is population growth come back and job growth to come back. There’s no point in building retail space and office space if the jobs are not there and the consumer is not coming out to shop.”
And it is consumers, who account for 71 percent of GDP, who really hold the key to the economic recovery.
“The consumer is the only part of this economy that can bring us back,” McPheters said. “Consumers are not going to come back into the game until home prices stop falling, until the stock market stabilizes, until they see unemployment rates have peaked out and job losses start to get smaller and smaller. And the consumer has to have confidence to buy, and believe it or not, the consumer has to back off of their inclination to save their money.”
In March, the savings rate as a percent of disposable income was 4.2 percent, up from 2.6 percent six months earlier. While increased savings are considered a good thing in robust economic times, a pullback by consumers as an economy tanks can have devastating effects. McPheters pointed out that for each 1 percent increase in the savings rate, approximately $100 billion are being pulled out of the consumer-spending stream.
However, McPheters expressed confidence that the very calamity that sent our state and national economies reeling will eventually add to Arizona’s attractiveness to new residents and businesses — falling home prices.
“Housing prices have now returned to the traditional level, where Arizona housing prices are now more affordable than the national average,” he said. “In 2005 and 2006, we had come to the point where we were one of the least affordable markets. That has turned around and it has turned around very quickly. Of course that has been very painful.”

Dennis Hoffman, director of the L. William Seidman Research Institute at W.P. Carey, agreed with McPheters, adding that he believes the state’s economic rebound will be strong.

“This of course is the big question: What kind of bounce will take place? Now, I’ll have to say that the dramatic shakeout in prices in housing, while it has been absolutely disastrous for a number of folk and put a lot of pressure in a lot of different places, it might set us up for a more robust recovery than I would have thought six to nine months ago,” he said. “The thinking is really, very, very simple; an attractive attribute of Arizona has historically been great climate, affordable housing and a place to get a job. That third aspect really doesn’t exist right now, but it could exist if our economy recovers at a little faster pace.”
In the economic downturns of the past four decades, Arizona has bounced back strongly, and Hoffman is confident history will repeat itself, especially if the state and Valley can re-create the environments that people from around the country have found so attractive.

However, a major wrench in making the state attractive again is Arizona’s current budget crunch. In fiscal year 2009, the state’s budget gap stands at $1.6 billion. In fiscal year 2010, that’s expected to almost double to $3 billion dollars. As the economy has worsened, unemployment has soared to almost 8 percent, foreclosures have skyrocketed and businesses have closed their doors. As a result, billions of dollars in revenue from income, property, sales and business taxes have evaporated. Conversely the need for state services has exploded.

“We’re really seeing the effects of the downturn in the economy, both in terms of state revenues — our collections are down at a very significant rate — and likewise, our caseloads are up at a very significant rate, because more of our citizens are in need of services,” said Eileen Klein, director of the Arizona Governor’s Office of Strategic Planning and Budgeting, adding that in the past two months alone the Arizona Health Care Cost Containment System (AHCCCS) has enrolled 50,000 people.
Hoffman pointed out that in the past, $48 to $50 out of every $1,000 of personal income had gone into the state’s general fund.

money line

Stabilizing Asset Prices Is Key To An Economic Recovery

The declines in asset prices are sweeping around the globe like a giant tsunami tumbling everything in its wake. Equity prices are down 47 percent from their highs, commodities 53 percent and, of course, residential real estate 25 percent. Industrial production, retail sales and personal consumption expenditures are all showing losses year-over-year and do not appear to be decelerating in any meaningful way.

In the first quarter of 2009, the negative feedback loop — the lower prices go the lower they will go — is being exacerbated by the erosion of confidence and the availability of credit. If this weren’t enough, the lack of accountability and transparency in the system is further eroding investor confidence, thereby curtailing capital spending and stifling employment.

As the monetarists and fiscal policy makers rush to shore up the banking system, they have, for the most part, missed the mark. Long ago, the highly levered global economy transitioned from a banking-dominated regime to one that hides behind securitized lending. The off-bank balance sheet structures such as SIVs (structured investment vehicles), hedge funds, CDOs (collateralized debt obligations) and the like fueled the explosion in asset prices as they levered up the system exponentially. As we are finding out the hard way, no real underlying economic value was being created, other than prices would surely be higher tomorrow, which reinforced speculative non-productive behaviors.

The false promise that rising prices alone create wealth is being unmasked as the de-levering of credit and speculative excesses unwind. The plea from Congress that banks need to start lending fails to recognize that the highly leveraged off-balance sheet bank, the Shadow Bank, is dead. The credit creation in the Shadow Bank was 30- or 40-to-1, versus 10-to-1 for the banking system most of us are familiar with. It is not that the 10-to-1 folks don’t have problems; it is that they simply do not have the capital to restructure all the 30-to-1 junk that is choking the system.

It’s about the capital
Nouriel Roubini, a highly respected economist and chairman of RGE Monitor’s newsletter, has estimated that the charge-offs and write-downs may reach $3.6 trillion before this cycle bottoms out. Bloomberg Financial, which has been tracking these charge-offs, recently reported that the number has reached $1 trillion, or about one third of Roubini’s best-guess number. In October 2008, the Federal Reserve reported that the U.S. banking system had about $1.4 trillion of capital, hardly enough to deal with the massive write-downs Roubini, Goldman Sachs Group and others see on the horizon.

The obvious simple solution is to figure out how to stop asset prices from declining further. Although this has been attempted over the past many months, the seemingly uncoordinated efforts have failed. The TARP (Troubled Asset Relief Program), which explicitly gave the U.S. Treasury the authority and money to purchase assets with the intent of stabilizing prices, instead saw those monies going into the checking accounts of banks. However well-intentioned the program was, it did little to stem the tide in the deflationary spiral, leaving us deeper in debt and virtually in the same position as when the legislation was enacted.

Price stability
In order to encourage investment and spending, we must first have price stability. Asset prices do not need to rise to get the economy moving, nor should we expect that they must. The value of the enterprise over time will be clear and will be priced accordingly. The benefits of price stability encourage investors to take on risk and give lenders the confidence to lend. Rapidly rising or falling prices merely confound and confuse even the biggest risk takers among us and that, in large measure, is why we see return of principal trumping return on principal.

All is not lost, however, as interest rates are down, mortgage re-financings are up and the stock market has attempted to battle back from some very bad economic news. The first half of 2009 is proving tough going. But we are guardedly optimistic that the second half will show signs of stabilizing, laying an important foundation for recovery in 2010. The stock market has its own twisted personality, but if it can move above the October lows the more optimistic we are that better times are ahead.

american flag, protest

Legal Arizona Workers Act Does Not Cause Expected Upheaval

In 2007, the state of Arizona made its first foray into “immigration reform” when it passed the Legal Arizona Workers Act. However, before the Legal Arizona Workers Act (LAWA) even became effective on Jan. 1, 2008, the Legislature went to work on amending the statute, presumably to “cure” some of the more controversial aspects of the law.

While the fundamental purpose and structure of LAWA has not changed, employers need to be aware of the current version of the law in order to limit the chances of being on the receiving end of an enforcement action. For example, the same legislation that tweaked LAWA also criminalized the act of knowingly accepting identity information from someone who is not actually the person represented in that identity information. Nevertheless, recent trends reported by a researcher from the University of Arizona suggest the enforcement tsunami that was expected to hit the business community is, up to now, little more than a ripple in a pond.

LAWA prohibits employers from “knowingly” or “intentionally” employing any unauthorized alien workers after 2007, and creates stiff penalties for employers who do. Penalties for first violations include mandatory probation for, and possible temporary suspension of, all business licenses issued by the state of Arizona. For a second violation during the probationary period, whether knowing or intentional, employers face permanent revocation of their state-issued licenses — thus effectively preventing the employer from doing business in Arizona. LAWA also requires every Arizona employer to verify new hire work eligibility through the federal government’s E-Verify system. However, LAWA created no “penalty” for failure to use E-Verify. So an employer who becomes the target of an enforcement action will likely be presumed to have “knowingly” hired an undocumented worker if that employer failed to use E-Verify. Evidently, most employers have decided either to roll the dice or they simply don’t recognize a risk. According to Department of Homeland Security data, as of late August 2008, only 5.6 percent of Arizona employers have enrolled in E-Verify.

Non-participation in E-Verify is not an option for contractors and subcontractors of any Arizona governmental entity. The LAWA amendments passed last year require those employers to participate in E-Verify as a condition of their government contract. In fact, any Arizona governmental entity (state or any political subdivision) would be prohibited from awarding a contract if the contractor or subcontractor does not comply with federal immigration laws and E-Verify requirements. LAWA requires government entities to ensure that their contractors comply with those requirements, and to include the following terms in their contracts:

  • Each contractor or subcontractor must warrant their compliance with LAWA’s provisions.
  • A breach of that warranty is to be deemed a material breach of the contract, subject to penalties up to, and including, termination of the contract.
  • The government entity retains the legal right to inspect the papers of the contractor and subcontractor employees who work on the contract in order to ensure compliance with the warranty.

Also, employers seeking to obtain an economic development incentive from a government entity must first register for and participate in E-Verify, and show proof of doing so. LAWA further requires the Attorney General’s office to, on a quarterly basis, request a list of Arizona employers registered with E-Verify from the Department of Homeland Security. The Attorney General must make that list available to the public on its Web site.

So far, enforcement actions against employers have been anemic at best. Judith Gans, manager of the Immigration Policy Program at the University of Arizona’s Udall Center for Studies in Public Policy, prepared a study on the preliminary impact of LAWA on immigration trends and businesses in Arizona. She found that not a single superior court enforcement action was filed during the first year of LAWA’s existence. The number of complaints filed with each county attorney during that period was one or none in nine out of Arizona’s 15 counties. The Pima County attorney reported only five complaints, four of which were declined because they involved individuals hired before 2008. The Maricopa County attorney’s office stated that it does not keep track of the number of reported complaints, and those that are filed reportedly are turned over to the county sheriff for investigation. Notwithstanding a number of high profile “raids” conducted by Maricopa County Sheriff Joe Arpaio in 2008, as reported in the local media at the time, no complaints have resulted in a LAWA enforcement action to date.

Finally, LAWA’s potentially adverse impact on Arizona’s economy has been negligible, or is simply undetectable. According to Gans’ study, the current recession has had a disproportionately adverse impact on business sectors that rely heavily on immigrant labor, such as construction. Therefore, because employment of all workers in those sectors, including immigrant labor, has been hard hit as a result of the current economic meltdown, any “LAWA-effect” has been masked.