In the name of competitiveness, New Mexico is lowering its corporate income tax rate and over time will allow corporations that sell their products outside the state to avoid corporate income taxation entirely.
Economic development advocates, especially in Albuquerque, say this approach gives them a level playing field with other states when they attempt to lure manufacturers to New Mexico.
century economy requires.
on Monday, the Brookings Institution reported that, of the nation’s 100 largest metropolitan areas, Albuquerque ranks 34th in the percentage of its workforce working at science, technology, engineering and mathematics jobs. This is in a city that is home to significant Defense and Energy department research installations, contractors that support those installations, a research university, and a top-drawer cancer research and treatment center.
Salt Lake City ranked 48th, Denver ranked 17th and Austin, Texas, ranked 13th. San Jose, the capital of California’s Silicon Valley, ranked first.
force in STEM jobs put the Albuquerque area at 66th out of 100. This in a city with a well-respected community college.
, there were 73,370 people working in STEM jobs in 2011, the year that Brookings analyzed, out of a workforce of about 354,400. More than 31 percent worked in a health care-related field or in a construction trade. This in a city where scientists do pioneering work in nanotechnologies, lasers, nuclear effects and alternative energy.
The BLS also reported that Albuquerque has a higher concentration than the nation as a whole of employees in community and social service work, health care, food preparation, personal care and services, office and administrative support, and construction and extraction. The average wages in these employment sectors paid in Albuquerque are below the national average by as little as 2 percent for food preparers, and as much as 14 percent in construction and extraction.
Our state’s corporate income tax changes were designed to signal, as politicians and business advocates put it, that New Mexico is open for business. What we are really saying is that New Mexico is competing with the rest of the country on the basis of price. We have cheap labor, cheap land and now we have a low tax base.
This is a reasonable competitive advantage in a 20th century world of high-volume production of commodities by semiskilled workers located in the American Rust Belt. This is now the competitive advantage enjoyed by Bangladesh and China.
century economies are built on human capital, according to Jerry Z. Muller, a history professor at Catholic University of America. Writing in Foreign Affairs, Muller said the market rewards “quickness of mind, the ability to infer and apply patterns drawn from experience, and the ability to deal with mental complexity … s and, most likely, money. The alternative is to console ourselves with winning a race to the bottom against Mississippi to become the nation’s bargain basement.Opponents of this approach argue that personal income tax reductions implemented during Gov. Bill Richardson’s first term and the large number of tax breaks New Mexico offers in an attempt to lure business and jobs to the state have produced little benefit at the cost of reducing our ability to nurture the kind of worker the 21stThen, When Brookings looked only at the jobs that require an associate’s degree or less, the percentage of the workIn AlbuquerqueThe other jobs report came last week. The federal Bureau of Labor Statistics reported that the average wage paid in Albuquerque is 6 percent below wages paid nationally. Workers in computer and mathematical jobs also made 6 percent less than the national average.Successful 21st
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