Does Ducey deserve credit for jobs in 2015?

• Ducey's first year in office was the best for Arizona jobs since the recession, but unremarkable for the state
• States that compete with Arizona for jobs outpaced the state in 2015
• Economists see little connection between governors and job creation

When Arizona's December jobs report came out, Gov. Doug Ducey trumpeted the numbers as a sign that his low-tax and light-regulations approach to governance is central to the state’s ongoing recovery.

In fact, Arizona’s CEO governor presided over the state’s best year for job growth since the Great Recession.

But the improvement is small compared with gains in key competitor states — and by the state’s own history — and economists who follow the intersection of business and politics are skeptical that Ducey had much impact on the state’s labor market in 2015.

Using seasonally adjusted numbers, the state gained 59,900 jobs, or 2.3 percent, from January to December. It was the best year for the state since the downturn began in 2007 and also topped the nation’s 1.7 percent growth in the same span. Arizona's improvement builds on job growth in prior years that hovered closer to 2 percent.

Measured against places like California and Texas and against Arizona’s own history, both recent and distant, the data suggest nothing remarkable about Ducey’s first year, raising the question of how much the governor — any governor — matters, especially in their first year in office.

"We have absolutely no model that links governors to job creation," said Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at the W.P. Carey School of Business at Arizona State University. "It is very difficult in the short term for a state's economic policy to have much impact on the economy. ... It's a very complex thing, but I think Arizona is much more driven by the national economy."

Arizona job growth in 2015 best since the Great Recession

Ducey sees his role as empowering businesses by not making things harder for them to grow and succeed, something some governors understand and other don't, said Daniel Scarpinato, a spokesman for Ducey.

"The governor has been pretty clear that he doesn't think the government creates jobs but it does create the environment in which businesses make decisions and jobs are created," he said.

Ducey's strategy and chief target

Ducey made a difference by imposing a moratorium on regulations, adjusting tax brackets to prevent inflation's effects, resisting a pause on scheduled tax cuts, supporting industries like ride sharing and through his personal contact with business executives, Scarpinato said.

Ducey has remained on the jobs offensive this year, at least rhetorically.

Ducey singled out California at least six unflattering times in his State of the State speech to Arizona lawmakers last month.

“The goal is simple: to grow our economy, to take full advantage of our geography to better address the needs of businesses fleeing California and other states on the decline, and to ensure job creators who are already here, stay and thrive,” Ducey said.

Some businesses have left the Golden State, but no place did better than California in adding jobs in 2015. It gained 459,000 net jobs last year. That was enough for 2.9 percent growth. Both numbers handily topped Arizona.

Ducey’s signature jobs initiative in his first year was Apple’s decision to open a command center for its global data networks in Mesa with 150 full-time workers. That triumph for Arizona comes as cost-conscious Apple is building new headquarters for 12,000 employees in Cupertino, Calif.

It's not that Gov. Jerry Brown, California's executive, has mastered job creation in his 13th year at the helm in Sacramento. Brown was elected to his first term in 1974 and his fourth in 2014.

"No governor has that much influence on their state," said Gary Burtless, a senior fellow at the Brookings Institution who researches labor market policy for the Washington, D.C., think tank. "Maybe eventually the actions they take will contribute to employment growth or employment shrinkage."

As jobs shift, who gets credit?

Assessing changes in jobs can be hard to gauge, in part because there are many ways to measure the economy.

For one, the federal government tracks employment using several surveys and data points. Monthly surveys from households and from payroll records usually, but not always, point in the same direction on job trends, though they produce different numbers.

Seasonal factors further complicate the task. Also, does a governor or any elected official really impact employment in their first month?

By several measures, Arizona’s economy is on stronger footing than it was several years ago. But gradual improvement has long been the defining quality of the recovery from the last recession for both Arizona and the nation. The U.S. needed more than six years to replace the job levels seen at the outset of the recession. Phoenix only hit that mark late last year and the state as a whole likely won't for several more months.

Metro Phoenix part of rise of 'solopreneurship,' independent workers

Last year's state budget, Ducey's first, was lean and included a relatively modest tax cut. But there was no seismic policy change in his first year. He asserted control over the Arizona Commerce Authority and cut a large profile in the state's business recruitment efforts. That, too, produced little employment upheaval.

Job records are often seen as central to every governor’s legacy. For those seeking higher office, it is offered as proof of their economic fitness or as a millstone to disqualify those with poor numbers.

Former Florida Gov. Jeb Bush has tried to convince Republicans that his state’s rapid job growth during his tenure was his responsibility. By contrast, Bush’s opponents have dismissed Florida’s job growth between 1999 and 2007 as the product of the nation’s housing bubble that popped shortly after he left office.

Similarly, former Texas Gov. Rick Perry got little mileage from the spectacular growth in that state over his 14 years in office, especially as the global oil glut has seemingly ended the boom there.

Good timing may be best bet

A closer look at the jobs data suggests a middling start at job creation on Ducey’s watch, and that the beginning doesn't always indicate where the labor market will be by an administration's end.

Using the most common seasonally adjusted figures from the U.S. Bureau of Labor Statistics, Ducey is arguably second for job growth compared with the early months of Arizona’s other four governors who started since 1990.

At the same point in her administration, Jane Hull had seen the workforce grow 4.2 percent. That came in August 1998 when the U.S. economy was sizzling and Arizona benefited from that as well. She finished with 14 percent growth, more than double the national growth rate.

If Hull had good luck, Jan Brewer did not. By her 11th month in office, Brewer had seen employment plummet 5.4 percent. That was the situation in December 2009, not long before the nation hit rock bottom jobwise from the Great Recession.

Brewer only hit net positive job growth in her 55th month in office. She finished with 3.8 percent growth over a span when the nation grew 5.1 percent.

Fife Symington had seen 0.6 percent job growth by April 1992. At that time, the nation was emerging from the "jobless recovery" of the 1990 recession. He finished in 1997 with 34 percent growth, outpacing the 13.6 percent in national gains in the midst of the dot-com bubble.

Janet Napolitano presided over 2.1 percent growth by December 2003. She finished in January 2009 with 10.4 percent growth. That was down from more than 17 percent a year earlier, as jobs slipped away in the unfolding housing crash.

Western rivals standing taller

Compared with his contemporaries, Ducey's record so far is also mixed.

Measured from January to December, Arizona ranked 13th nationally for overall jobs added and ninth in percentage gained.

California, Colorado, Idaho, Washington and Utah all could claim better performance in at least one of those two measures.

Looking only at the private sector, jobs grew 2.5 percent over Ducey's first 11 months. That ranked eighth in the country, but behind three other Western states.

Burtless, at the Brookings Institution, said such comparisons can miss the bigger picture.

The states currently at the bottom, posting actual job losses, are North Dakota, Wyoming, West Virginia, Oklahoma and Louisiana. They are all heavily affected by the global collapse in oil prices.

Losses in North Dakota, Burtless said, aren't the fault of the governor any more than President Barack Obama was responsible for steep losses as he took office during a recession that started 13 months earlier.

"Most economists would laugh you out of the room" for trying to draw such a connection, he said.

"These are long-run changes," McPheters said. "We really are influenced dramatically by the national economy, and since the national economy is sort of lukewarm in its rate of growth, Arizona is fairly lukewarm in its rate of growth."

Scarpinato agrees that the bulk of Ducey's record is yet to be written.

"This is really just the first quarter of the game," he said. "There's a lot more to come."

Reach the reporter at ronald.hansen@arizonarepublic.com.