I read today that the New Mexico unemployment rate was 6.6% in the month of December as compared to an unemployment rate of 4.7% nationally.
If you’ve lived in New Mexico for any length of time, you know that this is a relatively poor state, traditionally ranking in the bottom tier for state GDP, employee pay, and overall economic health.
Take a look at this article published last summer by WalletHub. New Mexico ranked 47th out of 51 for overall economic health. Compare this to neighboring states of Utah (ranked #1), Colorado (ranked #5), Texas (ranked #9), and Arizona (ranked #16). Obviously, with the exception of New Mexico, the southwest is doing well economically.
It is no surprise that New Mexico continues to struggle economically as oil and gas is the state’s largest private industry. But the real economic activity in New Mexico comes from the federal government. With a significant state presence by both the Department of Energy and the Department of Defense as well as three Air Forces bases, the state is heavily dependent on defense contractors.
And as great as it is to have an abundance of federal government revenue flowing into the state, I believe this is also the primary reason why the state struggles.
If you look back over New Mexico’s political history, the state had two long-running senators with Jeff Bingaman, a Democrat, serving from 1983 until 2013 and Pete Domenici, a Republican, serving from 1973 until 2009. Because the state was well represented by senior senators from both parties, no matter which party was in control, the state was able to keep a disproportionate share of federal contracts.
But the problem with this is that the state was never forced to develop and diversify its private industry. I equate the situation to a 40-year still living at home with his parents. No matter what happened, New Mexico had a steady flow of federal revenue coming into the state. And as a result, the state never became self-reliant.
Population growth has stagnated. Education continues to lag the rest of the country. And there doesn’t appear to be a plan to take the state forward.
I’m not sure what the answer is or how to remedy the situation but I do know that more of the same won’t work.