While the average national unemployment rate has reduced by a minuscule level percent since February of 2016 according to the Bureau of Labor Statistics, New Mexico’s unemployment rate has remained stagnant, floating around seven percent throughout most of last year.
As of this February, New Mexico now has the highest unemployment rating (6.8 percent) out of all U.S. states. It’s a title that has been passed back and forth between New Mexico and Alaska since early 2016.
According to Jeff Mitchell, director of the UNM Bureau of Business and Economic Research, as estimates are revised it has been revealed that New Mexico has in fact been in this position for longer than reports say.
“New Mexico has actually had the highest unemployment rate since October 2015 — nearly a year and a half.” Mitchell said.
Mitchell went on to note that, while our state has had a consistently dismal unemployment rating, this is very much a modern issue.
“Up until the recession New Mexico’s economy actually grew more rapidly than other states and typically had low unemployment. This is very definitely a post-recession issue; a failure of New Mexico to recover in a way that’s substantial.” Mitchell said.
According to the state’s Legislative Finance Committee, “New Mexico took nine years to regain employment levels last seen in 2006,” approximately two years longer than the rest of the United States. “However, recent reports indicate job growth has begun to slide to lower levels.”
What has hit New Mexico’s job numbers the hardest has been the drop in revenue from the mining and oil sector, an integral part of the state’s economy.
“Until early 2015 the mining sector was growing very rapidly, creating many jobs because of the money coming in in oil producing areas,” Mitchell said, adding that this loss of income has led to a scaling back of the jobs offered in this sector.
Lee Reynis, research professor and past director for UNM’s BBER, added that since early 2016 the mining industry has cut 3,200 jobs, manufacturing has cut 900 jobs, and government has cut 4,600 jobs.
Reports from New Mexico’s Department of Workforce Solutions echo these statistics, stating that the mining and logging industries have had the least amount of annual growth, declining 14.5 percent since the start of 2016.
Having been largely funded by the oil and mining sector in the past, this drop in revenue has negatively affected New Mexico’s government as well.
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UNM’s BBER estimated last October that 31 percent of New Mexico’s general state revenue comes from oil and gas. According to estimates published by BBER, New Mexico will be looking at a fiscal year deficit of $431 million this summer.
To combat the loss of revenue and the state-wide deficit, Gov. Susana Martinez proposed a hiring freeze for most government positions just this past week, further dampening the amount of available jobs in the public sector.
“A lot of people say that the state is too dependent on government jobs and government in general. We could debate that by saying what is very clear is that the government is far too dependent on oil and gas. Such that when oil and gas prices go down the state revenue drops rapidly and deeply,” Mitchell said. “Dealing with that is a long-term and very important thing to do, and something that state legislature has failed to do.”
Hiring freezes have affected UNM as well, according to the Legislative Finance Committee. The state of New Mexico provides four-year institutions with an average of 53 percent of total instruction and general revenues.
In preparation for state-wide budget cuts, former UNM President Bob Frank enacted a hiring freeze that began last September.
Despite budgeting cuts across the board, the state has prioritized funding to the public education and healthcare sectors, with increased budgeting for early childhood programs and healthcare of $100 million dollars over the past five years, according to New Mexico’s Legislative Finance Committee.
It’s perhaps not surprising, then, that the UNM’s BBER estimates there will be a total growth of 15,000 healthcare jobs by 2020.
New Mexico’s Occupational Outlook, released by the Department of Workforce Solutions, also suggests that the highest-projected job growth for the coming years will be within the Public Health Sector.
Over the last several years, economic development policy has also prioritized attracting out of state business and creating new local businesses in an attempt to create more jobs.
“We’ve done reasonably well through our creation of jobs by attracting and establishing new businesses,” Mitchell said. “That is not the problem, we are not supporting our businesses in New Mexico.”
According to the Legislative Finance Committee, too much emphasis is put on business recruitment efforts in an attempt to improve job creation, leaving the important tasks of business creation and business expansion without the proper programs or funding.
In regards to the unemployment issue in our state, the Legislative Finance Committee released a report stating that a continuing issue with New Mexico’s economic development efforts is “the search for a silver-bullet.”
“A single program or incentive that will cure the state’s economic ills,” the reports states. “This ignores the multitude of long-term, structural challenges New Mexico faces, including high school dropout rates, lack of infrastructure and availability buildings for businesses, regulatory concerns, and a skilled workforce.”
Hannah Eisenberg is a news reporter at the Daily Lobo. She can be reached at news@dailylobo.com or on Twitter @TheHannahEva.
