A new study ranks Arizona among the worst five states in the West at maximizing workers’ earnings, with Yuma as the only city in the state with above-average discretionary income.
Trove Technologies, a storage company based in San Francisco, released the Trove Discretionary Income Study that shows Arizona ranks poorly in the region and nation, despite lower living expenses and taxes, due to salaries being 4.5 percent below the national average.
The average Arizona worker sees a discretionary income of $3,603 after housing and living expenses and taxes, which places Arizona in the 26th percentile of states nationwide, according to the study.
The Trove Discretionary Income Study is the first to incorporate data that reflect regional differences in salaries, cost of living and taxes to most accurately reveal the take-home pay of American workers across 778 occupations.
While there are many “cost-of-living” calculators that highlight general income differences across cities, there are no others that take into account the effect of taxes on the cost of living or identify the significant differences by occupation, said Michael Pao, CEO of Trove.
“Due to low salaries, Arizona trails other states in the region when it comes to maximizing workers’ earnings,” Pao said. “Our research finds that the average worker in Arizona sees 1.3 percent less discretionary income compared to the national average for their occupation.”
Some of the major findings for Arizona include the following:
- The average worker in Arizona earns 4.5 percent below the national average, and although housing expenses are 4.8 percent lower, net discretionary income is still 1.3 percent below the national average.
- Phoenix and Tucson both rank in the bottom quartile of cities nationally.
- Arizona’s average salary is $45,685, estimated taxes are $10,064, and basic expenses are $32,017, leaving $3,603 in discretionary income.
- Top jobs are exercise physiologist, floor sander-finisher, financial specialist, lodging managers and marriage and family therapists.
- Bottom jobs are crane and tower operators, career and technical education teachers, special education teachers, nurse anesthetists and insurance agents.
- The data underlying Trove’s analysis is from the Bureau of Labor Statistics, The Tax Foundation and the Council for Community and Economic Research. Using a proprietary algorithm, Trove developed the tool and map for the study.