New Mexico’s Economic Drought

New Mexico’s Economic Drought

The economy in New Mexico has about as much life as a drooping mat of browning prickly pears. It’s true. Finding a job here is a struggle, and our armies of unemployed, underemployed and discouraged workers should know we’re not hallucinating. Maybe we will find some validation in this.

Elsewhere the economic news is getting plastered with smiley-face stickers.  Even in Albuquerque recently we’ve read stories of new hiring at City Hall and job fairs, including one at New Mexico Workforce Solutions in mid-April at Mountain, east of Broadway. I cycle past this place every day. I saw the long line of prospective workers stretching east out to Edith Boulevard – many times longer than the number of available jobs.

There are always long lines these days. And long litanies of rejection. Out-of-workers here may doubt themselves. If so many other folks are making money, why not us? Are we useless? Have we been weeded out by the cold fingers of an unfeeling job market because something is wrong with us?

No. We’re having a hard time finding work because the job market here is racked with drought. The REAL, weather drought, meanwhile, could make the job situation worse. This should be terribly embarrassing, but not to the unemployed.   

These are conclusions I have drawn while looking over the latest charts and reports and talking with Lee Reynis, director of the Bureau of Business and Economic Research at the University of New Mexico, one of the best resources anywhere on figuring out New Mexico’s economy. Please be clear that Reynis is not so gloomy as I am and makes a balanced, objective assessment. I, however, am underemployed and have a much more dessicated point of view.

“There ARE opportunities out there, but we have to be prepared. They’re not leaping out at us. We have what are more like potential growth areas,” Reynis said during a chat in the soothing, naturally lit shade of her office at UNM’s Onate Hall earlier this month.

Said Larry Waldman, formerly of the BBER, in a conversation later in the brilliant sunshine by UNM’s Popejoy Hall, “It really doesn’t have a feeling of optimism right now. … This is going to be a slow, painful process.”

Sounds about right.

Other states lately are more or less nervously enjoying modest increases in job growth. Reports have been showing a national rise in consumer confidence, upticks in the stock market, improvements in the housing picture and such. But New Mexico’s rate of job growth, based on the U.S. Department of Labor’s Current Employment Estimates, the Quarterly Census of Employment and Wages, and other sources, looks pretty much flat, moving up only pathetically.

Figures hadn’t even been showing growth until recently. The February Labor Market Review said, “The rate of over-the-year job growth, comparing February 2013 with February 2012, was 0.7 percent,” an anemic rate at best.

Reynis said the data generally have “kept going sideways.” The BBER’s January forecast anticipated job growth of 0.6 percent in 2013 and 1.5 percent in 2014, with overall job growth peaking at about 1.8 percent the first quarter of 2016. Reynis used the word “tepid” to describe this, compared to historical standards and what might be expected elsewhere.

For workers here who lost some 57,000 jobs during the recession and have been waiting for years for a ray of hope, this may be frustrating.

Some used to argue that the state’s huge reliance on government jobs – government makes up about a quarter of New Mexico’s economy – made the state “recession proof,” because these jobs were stable whatever the economy might be doing. This has not been the case lately, though. Government jobs have declined.

State and local jobs are beginning to recover ever so slightly now – witness the latest City Hall hiring news – but even in fiscal year 2014, there are projected to be fewer jobs than there were in 2008. Federal jobs have been tanking and are expected to continue to do so. While President Obama’s proposed new budget would keep spending at Sandia National Labs flat, and increase the Los Alamos budget by 7 percent, there is no telling what will happen yet as the feds contend with the automatic budget cuts of federal “sequestration” under way.

Not much is happening here in manufacturing, which has a small portion of the state’s jobs in any case – much smaller at 3.7 percent than 9 percent nationally. Jobs in the professional and technical services sector – my category, which includes the national labs, other research and scientific labs, accountant and legal firms, architecture and engineering outfits and such – are heading downward, partly because federal contracts and grants, which have supported much of the research and science in the state, aren’t so much anymore.

Even the news of improvements is not exactly inspiring.

Mining is doing “super well,” Reynis said. But it provides only 2.4 percent of the state’s jobs. Jobs are growing in health care and social assistance, thanks partly to an expansion in Medicaid spending. But the feds are talking long term about cuts in Medicaid. Accommodations and food service are doing OK. I worked in hotels part-time not long ago and know that the pay there is not great.

Transportation and warehousing look promising, with a new Union Pacific terminal planned for Santa Teresa, and Burlington Northern dramatically increasing freight coming through New Mexico, enticed by rail improvements in the Belen area.

But I do not get the feeling of broad prosperity from these improvements. One still must scrounge to find opportunities. Meanwhile, Albuquerque famously is behind other New Mexico cities in the improvement department. Much of the job growth, such as it is, is elsewhere.

Construction had been a downer, but it seems to be reviving a bit just recently – later than for the rest of the nation, but propelled by more sales of homes, declining inventories and somewhat rising prices, Reynis said. Good news for construction tends to be good news for government, which gets a lot of its gross-receipts tax revenues from growth in that sector.

Which brings us to drought.

Reynis, when thinking about what might be done to improve New Mexico’s economy over the long term, notes that it probably is NOT a good idea to hustle industries that use a lot of water. New Mexico is in a deepening drought that already is causing fights among water users in the southern part of the state. Texas is suing for more New Mexico water. Promoting businesses that threaten a declining resource seems counterintuitive.

For example, New Mexico thought it a great coup when it set up dairy industries in southern New Mexico, enticing them away from California. All the locally produced milk, cheese and such is very cool. But these industries – and the alfalfa they require for feed – are heavy water users. And water is in declining supply.

Just a thought, but other industries that use lots of water include some of the mining businesses that now are doing so well.  They are doing well partly because of the controversial hydraulic fracturing (fracking) technology they are using to open up untapped reserves of natural gas. Fracking depends heavily on water, and environmentalists argue that the technology also contaminates groundwater. Oil and gas have brought a lot of money to New Mexico. But the scarcity and quality of water eventually may become issues for fracking.

Let me dare to add that promoting population growth, which helps fuel housing construction, which is such a good source of tax revenues, also puts stress on water resources, because increasing populations put an increasing demand on water.

So what can be done about all of this?

Reynis advocates sensibly for minding our water resources and for fostering tech businesses here – existing and potential – saying that the national labs make New Mexico a natural hub for technology research and development. Economic development advocates have known this for a long time, but high-tech here has not taken off the way it has in tech centers on the East and West coasts.

She said she is impressed with innovative companies such as Miox, which is doing a booming business in Albuquerque making water purification systems – an interesting and appropriate and promising venture for a dry state such as ours.

Education also is important to her. You can’t expect to have a sophisticated economy with undereducated workers.

All of these things make great sense. But they are all off in the future – years, probably. As Reynis puts it, they have “potential” for job growth. That doesn’t help families facing bankruptcy and foreclosure right now.

Some folks here may be seeing the handwriting on the wall. U.S. Census figures suggest that 7,500 more people left New Mexico in 2012 than migrated into it from other parts of the U.S. They may be picking up and leaving for greener pastures elsewhere, literally and figuratively.

I notice things like the following lately. I was playing Old Time American and traditional Irish music with my friends at a house session at noon on Tuesday. It is something we have done regularly for years. An enormous pleasure. I mentioned I had to leave for an appointment.

This prompted one of my buddies to look around the room and say, “You’re the only one of us who’s employed right now!” presuming that I meant I had something to do at the community college where I teach. Actually, it was a routine doctor’s appointment.

Anyway, I reminded him that I “only work part time now.” Not as impressive an employment situation as it might have seemed.

Stuff like this happens all the time. I am constantly hearing people talk about joblessness and looking for jobs and how difficult it all is. Maybe I’m just primed for this. Maybe it’s just me. I don’t think so, though.

This piece was written by:

Jack Ehn's photo

Jack Ehn

Jack Ehn is the former editorial page editor for the late Albuquerque Tribune and now teaches journalism and English writing classes at Central New Mexico Community College. He worked for newspapers for 31 years and before that in printing and production. He is a graduate of the Columbia University Graduate School of Journalism and St. John's College.

Contact Jack Ehn

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