Eye on Right: ALEC Ranks Arizona a Top 3 State Economy, Even as Poverty Rate Climbs to 2nd Highest

What makes an economy shine in the eyes of the American Legislative Exchange Council (ALEC)?  Apparently, grinding poverty.

Last week, when the Census Bureau released its annual report [1] finding that 1 in 7 Americans are now living below the poverty line, one of the most dramatic changes came in Arizona, which now has the 2nd highest poverty rate in the nation at 21% [2], trailing only Mississippi -- a steep drop from 2007 when the state had the 14th highest poverty [3] rate in the nation.

Earlier this year, ALEC ranked Arizona as the state with the 3rd best “Economic Outlook” in the nation in their 2010 “Economic Competitiveness Index.” ALEC’s rankings in their report [4] co-authored by renowned supply-side economist Arthur Laffer claimed to take into account each state’s "current standing in 15 state policy variables." These ideologically-driven variables range from the state personal income tax rate to the level of the state minimum wage -- with a high minimum wage counting against a state's economic prospects. The report promoted Arizona as a shining example of economic vitality, even as the state continued its slide into greater poverty.

Arizona’s economic growth in the last decade was largely dependent on a construction bubble. As Progressive States Network has previously noted [5], in addition to the collapse of the bubble, conservative policies like reckless tax cuts, wide-ranging service cuts, and anti-immigrant legislation are now severely damaging the state’s economy, undermining its tourist industry, and driving away the economic contributions of Latinos. The state now faces one of the worst economic and fiscal crises [6] in the nation.

It is no mistake that the Census figures on poverty lead in one direction and ALEC’s rankings lead in another. The very same conservative economic policies that ALEC values in their rankings are the ones that also played a primary role in leading Arizona to its current state of fiscal crisis and economic despair.