New Mexico is in an economic rut.
It’s not due to a shortage of jobs. More than 31,000 jobs were available for nonfarm employment, according to the most recent report from the state Department of Workforce Solutions.
The problem is our low worker participation rate, just 56.8%, third-lowest in the nation behind West Virginia and Mississippi, according to the most recent non-seasonally adjusted data from the Federal Reserve Bank of St. Louis.
Too few workers in spite of plentiful jobs drives up the costs of everything.
“He can’t get anybody to come to work,” state Rep. Luis Terrazas, R-Santa Clara, said about his 77-year-old father, Luis Terrazas, who’s been building homes in Silver City for decades.
The elder Terrazas plans to retire after 45 years because he can’t get workers — after he alone finishes his last construction project.
It’s a story we’re seeing across the state.
Staffing struggles have limited days restaurants are open. Hotels can’t get housekeepers. Schools can’t hire enough teachers and bus drivers. Higher-paying jobs in engineering, health care, computer systems and higher education are also going unfilled.
Workforce Solutions says some of that has to do with the high number of people in New Mexico on disability. The number of disabled workers on Old-Age and Survivors’ Disability Insurance has doubled since 1999, while the number of disabled workers receiving Supplemental Security Income increased by more than 45%.
New Mexico’s unemployment rate remains higher than surrounding states. If we had the same workforce participation as the rest of the country, we’d have close to 100,000 more workers.
DWS Deputy Secretary Yolanda Cordova says another factor is substance abuse, a cancer affecting too many New Mexican families, our economy and our communities.
We also have an aging population and too much out-of-state migration of working-age adults.
So what are we doing?
College, vocational/technical education
State lawmakers recently allocated more than $100 million to higher education institutions for teaching endowments for nurses and social workers, $10 million for reemployment services and youth apprenticeships, and expanded the Opportunity Scholarship and fully funded the Lottery Scholarship so a college certificate is essentially free and a degree is affordable for New Mexicans.
Encouraging vocational training for those not interested in a four-year degree is the right path. Hobbs just opened a $50 million Career and Technical Education Center with the help of local and private investment. Mike Rowe, host of “Dirty Jobs,” was the special guest at the May grand opening.
The superintendent of Hobbs schools says about half the high school’s graduates pursue technical-track careers. Getting teens interested in becoming tradesmen, from welders and electricians to carpenters, brick layers and plumbers could be an important step in the path out of our economic morass. Jobs in skilled trades pay well and are always in demand.
A benefits cliff that should be a slope
Government social programs that penalize increasing your income by taking on more hours, a promotion or better job are also part of our low labor participation rate. Last June, nearly half of all New Mexicans were enrolled in at least one income support or health program from the state Human Services Department.
When better job prospects don’t outweigh what a household stands to lose in food or childcare assistance, it’s a no-brainer to avoid falling off that cliff and sticking with the benefits that make your household function.
But government programs should be a bridge to something better, not a generational lifestyle. They aren’t designed to lift people out of poverty or make dreams possible. They also don’t contribute to 401K or other retirement programs. We have a looming retirement crisis with most New Mexican workers 50 or older having no retirement savings at all.
“We need to figure out how we can (climb) those cliffs so that they aren’t disincentivized,” says Rob Black, CEO and president of the New Mexico Chamber of Commerce.
The state should try to soften that sharp cutoff of benefits into a sloping phased-out approach, perhaps by temporarily supplementing the loss in benefits for those who want to pull themselves up by the bootstraps and climb the income ladder.
Data on why so many aren’t working
Workforce Solutions plans to form focus groups to survey individuals who are not working and aren’t getting unemployment benefits – and ask why they are no longer working. The results could be enlightening and should be made public. Rather than throwing even more money at the problem, let’s find out if our dependence on government benefits, a lack of affordable child care, or ongoing substance-abuse issues are keeping people out of the workforce. Or are too many of us just too old and too disabled to join the workforce, making retaining our younger residents that much more essential?
The state has already expanded childcare subsidies to help New Mexicans get back to work. We’ve also increased the minimum wage, required private businesses to provide paid sick leave and added a return-to-work program for retirees. State and business leaders are working on more — including providing employers funds to pay higher salaries.
Still, more than 480,000 New Mexicans 16 and older are not employed. And last year we had the fourth-lowest workforce participation for women. We can and must do better, but we need to know how best to put our shoulder to the wheel.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.