Phoenix Labor Market Rising

June 28, 2021

Migration-fueled talent supply and business investment have Phoenix’s profile rising. The Phoenix-Mesa-Scottsdale, Ariz. metro is ranked as the fifth healthiest market in the country, based on analysis by LaborIQ.

Nearly 112,000 people moved to the Phoenix metro area from 2019 to 2020, more than any other metro, a trend expected to continue for the next five years at an average annual growth rate of 2.7%. Phoenix’s growing labor supply offers opportunity for businesses in post-pandemic recovery mode.

The labor market in the Phoenix metro area is trending positive for employers and workers alike.

With employment still down -2.4 % from pre-pandemic levels and with an unemployment rate of 6.0%, higher than the national average, the metro has more labor supply slack than other markets, likely induced by the strong migration patterns and draw to the area. The population trend for Phoenix 2019 to 2025 shows continued growth, per LaborIQ.

Phoenix Population Growth Forecast 2019 to 2025

Business investment has rolled in, with Lucid Motors planning to open a $700 million vehicle factory and Taiwan Semiconductor Manufacturing Co. investing $12 billion for a 1,600-worker factory, according to reporting by the Wall Street Journal.

In 2021, wage growth is expected to be 2.3%, just under the average of the top 50 most populated metro areas. Employers in the area will benefit from less expensive payrolls than elsewhere, enabling them to reinvest in other recovery growth plans. Slower wage growth also makes Phoenix a more affordable option for employers to recruit remote workers. Some job roles, however, will see greater wage gains, especially in highly competitive jobs such as technology and health care.

Why It Matters

Labor force slack means that some roles will be easier to fill, and recruitment will be less challenging. Businesses opening or reopening in the Phoenix area may not feel the wage pressures of other places, and strong migration can be a good boost for growth in a local economy with pent-up demand. Phoenix may also be attractive to employers around the country searching for more talent or remote workers with easy access to other southwestern and western hubs if business travel becomes a job necessity.


LaborIQ forecasts the Phoenix market to recover all jobs lost from the pandemic by late 2022, ahead of the national recovery and many other metros still struggling due to the severity of the recession and on-going economic challenges. Some industries in the area will recover earlier, such as Manufacturing, projected to recover this year, while Education and Health Services will take longer to recover, returning to pre-pandemic employment in 2023. The Phoenix metro labor market is well positioned as a great place to be for both businesses and job seekers.

LaborIQ by ThinkWhy reports, forecasts and advises on employment conditions and the impact to jobs, industries and businesses across all U.S. cities.