SANTA FE, N.M. (KRQE) – With record levels of revenue available for investment in the state, New Mexico’s lawmakers are asking themselves: “What’s holding New Mexico back, and where can the state invest for growth?” A new report has one potential answer.
“The state’s labor force holds the state back from economic development and expansion,” the Legislative Finance Committee (LFC) wrote in a recent report. “In New Mexico currently, the demand for workers is much greater than the supply.”
According to the report, New Mexico needs about 116,000 more workers than it currently has employed just to reach the national average rate of workforce participation.
Unfortunately for policymakers, actually addressing workforce participation isn’t always easy given the complex factors underlying the issue. For example, New Mexico’s Department of Workforce Solutions reports that since 2010, nearly 20,000 workers have left New Mexico and have never been replaced.
When it comes to those workers who are in New Mexico seeking jobs, there’s a mismatch in the skills workers have and the skills required by the jobs that are hiring, according to the LFC. That can result in the state essentially and unintentionally “exporting” workers to states with jobs that better fit their skills.
“This goes back to a misalignment in the skills and degrees and certifications these students are coming out with and what’s needed in the job market right now as well as the jobs of tomorrow,” Jon Clark, the acting secretary for the Economic Development Department, told a committee of lawmakers on September 27. “We need to be doing a better job of making sure that we’re aligning that education.”
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Data from an analysis by Johnathan G. Conzelmann, Steven W. Hemelt, Brad Hershbein, Shawn M. Martin, Andrew Simon & Kevin M. Stange give an indication of which states are losing four-year college grads. The full report can be found at NBER.org.
New Mexico does try to help match would-be workers with local jobs. But the numbers show some programs aren’t living up to their targets. In fiscal year 2023, about 50,000 people received employment help in New Mexico Department of Workforce Solutions offices, according to the LFC. That’s about half of the agency’s target.
The state’s Economic Development Department tries to help through the Job Training Incentive Program (JTIP), which puts money towards education and training for newly created jobs. But the department says the cost-per-job-created to the state has increased by 85% in the last fiscal year. Similar economic development through the state’s Local Economic Development Act (LEDA) program has also seen a rise in per-job costs, according to the LFC.