New Mexico’s economy still drags

Economics is known as the dismal science. It has certainly been dismal in New Mexico for a while.

A few sobering facts were offered at the recent Data Users Conference sponsored by the UNM Bureau of Business and Economic Research. The presenter was Jeffrey Mitchell, Director of the BBER. There were no big surprises, but no easy answers either.

People are leaving New Mexico. Net outmigration (years 2011 to 2015) is more than 150 persons leaving for every 100 who move in. All our neighboring states are going in the opposite direction.

The groups leaving are young people, young families, and seniors. Those staying are older working age adults, ages 45 to 64. Individuals with associate and bachelor’s degrees are leaving in the highest numbers.

Around 1940, Mitchell said, New Mexico was number 21 in percentage of residents with a bachelors degree or higher. In the 1960s we ranked fourth highest in that category. Nationally, people are getting more education but New Mexico is dropping in that ranking. We are currently number 39.

Since the 2008 recession, the state’s economic condition has been driven by external factors such as the demand for oil and gas and the uncertainty related to the national laboratories. Even though the oil business is going up at the moment, clearly we are not in control of our own economic destiny.

Mitchell said startup businesses are not solving our problem. Compared to neighboring states, New Mexico does not lack startup businesses, but they not do as well as startups in other states. A higher percentage of them close or fail.

It’s not as if nobody’s trying. The Economic Development Department keeps sending press releases announcing companies that are opening, expanding or relocating here.

A nationally known company called Keter Plastics has taken over the old Solo Cup factory in Belen. Rhona Espinoza of the Belen Chamber of Commerce says it is close to completing an ambitious construction project and should be hiring soon, providing an estimated 175 jobs.

But why did we lose Solo Cup? That factory closed in 2008, costing more than 200 jobs. The company spokeswoman said at the time the closure was due to economic conditions, product demand and a need to consolidate operations. Apparently they did not choose to consolidate here.

A legislative interim committee report says a new company is taking over the the abandoned egg processing plant in Berino, south of Las Cruces: again, good news, but why did the egg processing plant close? I’m disappointed to read that the former New Mexico Shrimp Company is closed. That company was planning to raise shrimp in the desert using high-tech aquaculture.

A brand-new startup founded by a doctoral student in biology is raising snails for escargot. This is very creative but, let’s face it, a limited market.

One proposal that has received a favorable reception is importing retirees. The legislative Rural and Economic Development Committee has endorsed a $250,000 appropriation for a marketing campaign.

According to the proposal, submitted by economist Charles Lehman and John Garcia of the New Mexico Homebuilders (former Economic Development cabinet secretary), one retiree household with $70,000 annual income contributes $65,000 in state taxes over 15 years. The numbers look favorable.

The proposers say New Mexico is a terrific place to retire; it is just not well enough known. They cite the relatively low cost of living, weather, culture, natural attractions and other factors. It is promising, but still a drop in the bucket.

As we continue to support efforts to grow businesses one at a time, New Mexico is also going to have to do something big, and probably risky.

Anything big enough (such as dipping into the state’s Permanent Fund) will no doubt make us very uncomfortable. We should be looking at next year’s legislative and especially gubernatorial candidates for the boldness to offer big ideas and the competency to get them executed.

Triple Spaced Again, © New Mexico News Services 2017

This entry was posted in Articles. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *