FLAGSTAFF, Arizona, August 8, 2001 -- Around here, it's taken for granted that the tourist industry is the best thing that ever happened to the local economy. Less than 80 miles from the Grand Canyon, Flagstaff draws a huge number of visitors every year. These people come through town, spend a lot of money, and supposedly create an enormous economic stimulus that benefits everyone.
Tourism, we're told, provides jobs for everyone. The problem is, these jobs don't pay much.
I say "supposedly," because the economic benefits of tourism are largely illusory. Sure, there are a few people who benefit from the steady stream of campers, hikers, bikers, and sightseers who come through town every summer -- but unless you own a business that caters to the visitors, you're out of luck. In terms of providing professional jobs that pay a living wage, the tourist industry is a big zero.
The "Sunshine Wage"
The Flagstaff Convention and Visitors Bureau talks a big line about the tourism and "hospitality" industries, and how much they "help the local economy" by bringing money in and providing jobs for Flagstaff residents. And, well, to some extent, they're right -- we've got dozens of hotels and motels, three McDonald's franchises, and a whole slew of t-shirt shops. There are a ton of minimum-wage jobs in town; which is great, if you're a college student.
But if you're a grownup, the reality is different. Ask people who actually live here year-round and work for a living, and they have a phrase to describe Flagstaff: "Poverty with a view." The climate is great, the geography is spectacular, and the air is clean. These factors are the main reason why Flagstaff is an appealing place to live.
But there is almost no private-sector professional employment of any kind here. We've got a few industrial plants -- W.L. Gore, Ralston-Purina (where they make no fewer than 42 kinds of pet food), Wisconsin Tissue, and one or two others -- but other than Gore, these companies provide mostly blue-collar jobs. Nothing wrong with that; but they're not a very good career path for knowledge workers.
The big employer in town is Northern Arizona University. I don't have the numbers offhand, but they probably employ more white-collar professionals than anyone else in town -- possibly, more than everyone else in town put together. There's also a community college here, as well as several state and Federal agencies. Obviously, they hire a few people.
Then, you've got the tourist industry. Which, if you believe the Chamber of Commerce and the Convention & Visitors Bureau, is the economic engine that drives the mighty Flagstaff Prosperity Machine. Tourism, we're told, provides jobs for everyone, brings tremendous amounts of money into the local economy, and otherwise makes everyone happy and healthy.
Smile when you say that!
The problem is, the vast majority of these jobs don't pay much. I haven't been able to find any studies showing the numbers for Flagstaff, but awhile back, a University of Arizona study (quoted in the Arizona Daily Star, March 15, 1998) came up with some pretty damning figures for Tucson.
The study found that tourism accounts for 36,500 full- and part-time jobs, about 12 percent of Pima County's total wage and salary employment:
There are 25,700 jobs directly linked to businesses serving people from out of town. Another 10,800 are indirect or induced, created to serve people who earn their money from tourism, such as in grocery stores, and businesses that cater to hotels and restaurants, such as commercial kitchen supply companies and laundries that take care of hotel linens.
Sounds good -- but take a look at what those jobs pay, as reported by another study quoted in the same article:
[A] study conducted for the Metropolitan Tucson Convention & Visitors Bureau last year showed that wages and benefits for Tucson hospitality jobs average $20,000 a year. That figure includes base pay of about $14,000, tips and health and life insurance, said researcher Nancy Roth... Middle management and supervisors were paid an average of $17,534, the study found. Workers in non-management occupations were paid $7.56 an hour, or $15,725, including tips. According to the federal Bureau of Labor Standards, the average wage in Pima County in 1996 was $24,705, the last year for which figures are available.
In other words, "hospitality" jobs pay about 43% less than the average wage. And keep in mind that this study was done by the Convention & Visitors Bureau. You'd expect them to parrot the party line about the tourist/hospitality industry being a boon to one and all -- but even they admit that the jobs stink! Come on, now -- $17,534 for middle management? And $15,725 including tips, for non-management jobs?
Why does the city of Flagstaff promote tourism? Because local businesspeople demand it.
In spite of these numbers, the guy who oversaw the UA study has the cojones to insist that tourism is beneficial:
``Tourism is a very large component of our economy. It is what Tucson is all about and Arizona in a broader scope,'' said Marshall Vest, forecasting project director at the UA's College of Business and Public Administration. Vest said both the university and the high-tech sector each account for 11 to 12 percent of the economy, the same level as tourism. Vest said he expects Tucson's reputation as a destination for visitors will increase. ``We have some world-class destination resorts which rank very highly. Over the next few years, I expect a few more of those to be developed,'' Vest said. ``Tourism will be a growing share of what this community is all about,'' he said.
Presumably, low wages will also be a growing share of what the community is all about.
Lest it appear that hospitality jobs stink only in the Southwest, I offer another example, from Maine (a state that stakes its economy largely on tourism -- its license plates say "Vacationland"). According to a study published by the Maine Center for Economic Policy, hospitality workers in Maine don't do any better than their counterparts in Tucson; in fact, they do worse. Here's a sample of what the study has to say:
The best available data for 24 hourly paid tourism occupations indicates that, as labor markets tightened between 1995 and 1998, roughly two-thirds of employees did receive rising real wages and made progress toward the livable wage standard of $9.46/hour in 1998. Yet, nearly one-third of tourism workers suffered declining real wages; tourism compensation rose more slowly than average wages statewide; and the median tourism wage was still just $7.15. Under optimistic assumptions, we conclude that less than 40% of all tourism employees (including salaried and self-employed) earned a livable wage in 1998. That compares unfavorably with 68% for the total Maine workforce and falls dramatically short of the Growth Council's goal of 85% livable wage jobs by 2005. In addition, survey information suggests that very few hourly employees receive supplementary benefits, especially all-important health insurance coverage.
Now, I'm not going to get into the "livable wage" argument, which has been used here in Flagstaff, as it has in Maine. A wage is what you make of it -- I don't see what's magical about $9.46 an hour. Whether or not that's a "livable" wage depends on how you live. But the study clearly shows that working in the tourist industry isn't a path to prosperity on the East Coast, any more than it is out here. The Center for Economic Policy sums it up better than I could:
[R]elatively little of Maine's growing prosperity has so far trickled down to tens of thousands of hourly tourism workers. For most of them, the Growth Council's laudable livable wage goal remains a distant dream. Citizens who believe creation of quality jobs should have high priority in Maine's economic development strategy should question public policies that encourage "more of the same" tourism growth. At the very least, policy makers must focus more resources and creative energy on the big challenge of raising productivity and compensation in "low-end services" such as tourism, where much of Maine's employment growth has been concentrated for the past decade.
Not to belabor the point, but just to give one more example, the same low-wage story is true in West Virginia, as documented in Appalachian Focus Labor News (July 11, 2000):
According to the state Bureau of Employment Programs, amusement and recreation workers earn less than half of the average West Virginia weekly paycheck. For 1998, those workers made an average of $233.61, while the state average was $486 a week.
Canada's no better, eh?
A 1999 article in the progressive Canadian journal Our Times is even more blunt. The tourism trap reports the same conditions in the Maritime Provinces that we see in this country:
With the tourist season only two to four months long, more than 90 per cent of the work is seasonal, and wages within the industry are typically the provincešs minimum: $5.50 an hour [and that's Canadian dollars; at the current exchange rate, that works out to a healthy $3.59 an hour in American money... ed.]. Meanwhile, federal cuts to unemployment insurance have weakened the economic lifeline for workers in the off-season, making their lives even more tenuous.
With jobs like these, why work at all?
Why, then, does the city of Flagstaff promote tourism? Because local businesspeople demand it. That's because it benefits them, by bringing in a lot of money.
As my college Economics 101 textbook argued, government policies tend to reflect special interests, because it's worth their time to lobby the government. The average person doesn't bother his Congressman or local government officials very often, because the direct benefit from passage of a particular bill isn't likely to outweigh the cost, in time and travel expenses, to go to the official's office and meet with him/her. For a business owner, however, the direct benefits from one lobbying visit can be huge. If a business owner is able to persuade Congress to nix an increase in the minimum wage, that means immediate money in his/her pocket. For the average working stiff (who isn't able to make as substantial a campaign contribution to the same official), badgering his representative isn't likely to do much -- so he doesn't bother.
If we think the tourist industry is the engine of prosperity, we're kidding ourselves.
In Flagstaff, the end result is that more and more resources are poured into encouraging tourism -- something that doesn't need much encouragement, since the Grand Canyon is only 70-odd miles from here. Meanwhile, very little is done to attract industries that would provide jobs for professionals. Hence the "Poverty with a view" moniker.
One argument in favor of tourism is that if nothing else, it does bring in a lot of tax revenue. This is certainly true -- and this is of some benefit to us locals, because the city and county are able to provide more services, while taxing us less, than would otherwise be the case. But so what? Other industries -- banks, technology companies, insurance firms, publishers, you-name-it -- pay income and property taxes, too. Or, that is to say, they would pay them -- if they were here. They would also provide good jobs that paid decent salaries. But they aren't here, so their jobs aren't, either.
All of this isn't to say that hotel, restaurant, and resort owners are evil -- just that their industry is not a sound basis for economic prosperity. The "tourism trap" continues to distract us from doing what would really help the local economy -- getting some real industries to locate here.
What would it take? I'm not sure. Tax breaks would help. The city has shown that it's happy to offer incentives to big-box retailers -- how about doing the same for technology companies? There's certainly no problem attracting a highly-qualified work force to Flagstaff. As it is, we've got people with advanced degrees working at fast-food and retail jobs -- these people would be only too happy to go to work for real employers; and they probably wouldn't demand big salaries, either.
Play with this!
Besides the dubious economic "benefits" associated with the tourist industry, there are other problems, which I won't go into at length. Need I mention the recent attempt by the Arizona Snowbowl to build a monstrous "snowplay" area in the Fort Valley neighborhood north of town? This project, which would have amounted to nothing more than a playground for out-of-towners, would have been a noisy, light-infested, water-hogging blight on the landscape, serving no purpose other than to generate revenue for the Snowbowl owners, whose arrogance in proposing the project was nothing short of astonishing. They're operating the ski resort on public land to begin with; they should be grateful that we allow them to do business in the first place. Their attempt to shove the snowplay area down local residents' throats was, fortunately, met with vocal opposition from people who live in the area. The Coconino County Planning & Zoning Commission is to be commended for slamming the door on the project (at least for now).
But I digress. Tourists are going to flock to Flagstaff whether we like it or not. They're going to pump some money into the local economy -- and this, in itself, is not a bad thing. But if we think the tourist industry is the engine of prosperity, we're kidding ourselves.
Copyright © 2001 John J. Kafalas
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