NEW MEXICO (KRQE) – New Mexico’s unemployment is back down to near pre-pandemic levels. That’s according to the latest data from the New Mexico Department of Workforce Solutions (DWS).
However, New Mexico has a higher percentage of the labor force unemployed than any other state, according to the latest numbers from the U.S. Bureau of Labor Statistics. Experts say New Mexico is still recovering from the pandemic.
“If we compare New Mexico to the rest of the country, we do rank 50th in unemployment rate right now out of our 50 states. This is often, it sounds surprising for many people, but this is very typical, often here in New Mexico,” explains University of New Mexico (UNM) Associate Professor of Finance Reilly White.
In times of economic downturn, New Mexico employers tend to not rapidly fire employees, White explains. But businesses also tend to re-hire slowly. “And that means our recovery takes longer than other parts of the country,” White says.
The latest numbers from DWS show that only about 4.9% of the workforce was unemployed in February 2022. Unemployment data is seasonal, meaning it rises and falls, often peaking in the summer and winter. But this February’s unemployment rate is near the state’s 10-year all-time low.
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New Mexico’s unadjusted unemployment rate is near 10-year lows. Data: DWS
In the spring of 2018, unemployment dipped to only 4.2% of the workforce. By June of that same year, it was back up to 5.5%.
It’s possible that this year’s unemployment numbers will see a slight increase this summer simply due to the regular effects of summer unemployment. For example, in the summer, newly-graduated students hit the job market, potentially increasing unemployment counts.
The latest numbers suggest that New Mexico is moving out of the pandemic job slump. From February 2021 to February 2022, New Mexicans gained 50,100 jobs, according to preliminary DWS data published this month. According to the numbers, nearly 90% of those gains were private-sector jobs.
“New Mexico is still improving month to month,” says White from UNM. “It’s improving consistently. And this is sort of what we’ve seen before in other recessions.”
Manufacturing and goods-producing employment increased by 7,000 jobs over the last year. Government employment is up by 5,600 jobs. But the biggest gains were in the service industry.
Over 43,100 service industry jobs were filled over the last year, the preliminary data shows. More than half of those were leisure and hospitality jobs.
During the pandemic, New Mexico’s hospitality industry took a particularly hard hit. KRQE News 13 investigative reporter Gabrielle Burkhart examined the faltering industry last year. At the time, Cody Johnson, Public Information Officer for New Mexico’s Tourism Department, said: “We’re looking at basically a $4.3 billion economic injury in 2020.”
Nationally, leisure and hospitality has still not made a full recovery to pre-pandemic levels, according to data from the Federal Reserve. Mid-pandemic, in 2020, about 8.7 million people worked in the industry across the U.S. That’s about half as many as had been working in hospitality at the end of 2019.
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Nationwide, the leisure and hospitality industry has not fully recovered to pre-pandemic levels. Data: FRED
The latest numbers, from January 2022, show that about 15 million people are employed in the hospitality industry across the nation. That’s still below the pre-pandemic count of nearly 17 million.
In New Mexico, there were around 100,000 people employed in hospitality in 2019 and the beginning of 2020. Then, only a month after the first COVID-19 case was announced in the state, hospitality employment dropped to about 57,000 jobs — employing roughly half the number of people as the month before.
It’s taken nearly 24 months, but hospitality employment in the state has nearly recovered, the numbers show. Preliminary data from February 2022 shows close to 96,000 people employed in the industry.
There are, of course, some industries that saw relatively little changes in unemployment from COVID-19. Education and health services in New Mexico, for example, saw only about a 10% dip in employment at the start of the pandemic.
White from UNM adds that across the nation, there are more job openings than there are people on unemployment. The reason, he says, is that there’s a mismatch between the skills would-be workers have and the positions employers want to fill.
“For instance, if you’ve spent 20 years in a manufacturing job, and you have all this experience, it’s not likely you’ll take a job in a restaurant,” White explains. “So this kind of puts an onus on us, sort of as a country and as a state, to improve upon our workforce training our workforce initiatives to try to get workers to the right jobs.”
Furthermore, White says that unemployment numbers belie the true scope of New Mexico’s workforce.
“The unemployment rate captures only people who are working or looking for a job in an active way. It doesn’t include people who dropped out of the workforce altogether,” White says. “We lost people due to retirement. We’ve also lost workers due to concerns over childcare, inability to get resources available for their families.”
The result, he says, is that New Mexico’s overall workforce is still lagging. There are about 25,000 fewer people in New Mexico’s workforce now than there were at the start of the pandemic, he says.