Copyright © 2022 Albuquerque Journal
Part one of a two-part series
After 45 years in the business, Luis Terrazas is finishing up perhaps his worst construction project ever. At age 77, the Silver City homebuilder is literally doing the job himself.
“He can’t get anybody to come to work,” said his son, state Rep. Luis Terrazas. “He’s always like ‘this is my last one.’ But this made it for sure the last one. His struggle with a lack of employees has made sure he’s going to retire.”
The younger Terrazas, a Republican from Silver City, tells of his brother, a roofer who is re-roofing a 30,000-40,000-square-foot supermarket with only two workers. “He can’t get employees.”
“This isn’t just our family,” Terrazas told the Journal last week. On his travels around New Mexico as a legislator, he’s seen the signs of the state’s low worker participation rate – the third-lowest in the country at 56.8%, according to the most recent data from the Federal Reserve Bank of St. Louis.
There is a variety of explanations and the decline did not happen overnight, but recent data from the state Legislative Finance Committee shows more than 480,000 working-age New Mexicans are not employed. Not that there isn’t a demand.
Restaurants are closing early on weekends or resorting to takeout only. Hotels tell patrons their rooms won’t be cleaned on a daily basis due to housekeeping shortages. But higher-paying jobs are also going unfilled – for example in engineering services, computer system design and higher education. Even employment placement agencies cannot find employees.
The health care worker shortage is so acute that one New Mexico hospital has temporarily stopped delivering babies because of the shortage of doctors and nurses. At one Albuquerque nursing home earlier this year, patients were unable to get to the bathroom because no staff members were available to take them and one man resorted to using a water bottle as a urinal. Earlier this year, with the COVID-19 pandemic lingering, Gov. Michelle Lujan Grisham asked the National Guard to volunteer as substitute teachers.
School districts have struggled to hire bus drivers, due in part to the overall problem attracting people who have a commercial driver’s license. “It’s part of this thing called ‘The Great Resignation,'” Rio Rancho schools chief operating officer Mike Baker told the Rio Rancho Observer last month. “It’s my understanding a lot of people willingly left the workforce and are not coming back – they left during COVID and they’re not coming back.”
State Legislative Finance Committee staff reported recently, “If New Mexico had the same workforce participation as the rest of the country, the state would have close to 100,000 more workers.”
New Mexico’s unemployment rate remains higher than in surrounding states, even though it dropped to just under 5% last month. But online job openings have soared over the past year, with more than 23,000 new postings than last year at this time, state records show.
Worker participation rates in most New Mexico counties have rebounded after the COVID-19 pandemic hit in early 2020 and led to temporary shutdowns or in-person curtailment of business operations, schools and all but essential services, according to data released by the state’s Department of Workforce Solutions.
But seven counties – Otero, Lea, Curry, Eddy, McKinley, Cibola and Torrance – had lower worker participation rates in May 2022 than before the pandemic hit in 2019, the data shows. Two counties, Taos and Roosevelt, have remained roughly at the same pre-pandemic levels.
“Across sectors, the state is in need of every worker it can get, especially teachers, nurses, social workers and service industry workers,” states a recent report by the state Legislative Finance Committee. “Improving participation in the labor force is a key strategic goal for the state to recover from the pandemic, meet long-term needs and address labor shortages.”
The Legislature recently devoted more than $137 million to shore up the workforce, including a $10 million appropriation for reemployment services and youth apprenticeships, and more than $100 million to higher education institutions for teaching endowments for nurses and social workers. Some businesses have received government aid to hire new workers in the hospitality and tourism sectors. In two New Mexico cities, teens were offered up to $200 to get a summer job. The program also required training sessions.
But there’s no simple fix.
“I don’t think this is a partisan issue,” Terrazas told the Journal. “I think everybody wants to go back to normal, we want to enjoy our favorite restaurants again, to enjoy our beautiful state. We just need to resume back to normal.”
Why so low?
Nationally, as in New Mexico, the labor force has been shrinking over the past two decades since an all-time high seen in 2000. But just under 57% of New Mexicans 16 and older were in the labor force in June, compared to 62% nationally, according to the St. Louis Federal Reserve.
The labor force participation of men in their prime working age – 25 to 34 – fell by nine percentage points in New Mexico from 1999 to 2021, while the U.S. rate was down 5.6%. The rate of participation in that group was 82% in 2021, compared to the national rate of 91%, according to the state Department of Workforce Solutions.
The workforce participation of men aged 45 to 54 in New Mexico was nearly twice the decline of the national rate. And, in 2021, New Mexico had the fourth-lowest workforce participation for women, after West Virginia, Mississippi and Alabama.
One reason cited for the low rate is that workers are leaving New Mexico; more than 29,000 more people left the state from 2010 to 2020 than who relocated here.
Dr. Michael O’Donnell, director of the University of New Mexico’s Bureau of Business and Economic Research, or BBER, said the migration of working-age adults from New Mexico may not necessarily be driven by economics. It could be that some New Mexicans “are just more willing to fly the nest and leave home in a way that, historically, people from the state had not been willing to do,” he said.
The state’s population is also getting older, at a faster rate, than the rest of the country, and retiring, according to an April report by Rachel Moskowitz, a bureau chief at the state Department of Workforce Solutions.
Another factor is the rise in the number of working-age people receiving disability benefits, which DWS Deputy Secretary Yolanda Cordova told the LFC at a meeting last month “was definitely surprising to us.” The number of people in New Mexico receiving benefits from the Supplemental Security Income program, for instance, increased by 45.1% from December 1999 to December 2020, Moskowitz reported.
Nationally, there has been a debate about the impact of government social programs on the country’s declining labor participation rate.
For instance, one 2011 study published in the American Economic Review found that growth in the Social Security Disability Insurance program over several years came as employment opportunities for lower-skilled people declined. Moreover, changes in the eligibility process have made it easier to obtain benefits based on conditions sometimes difficult to identify clearly in medical terms alone, such as back pain or depression, the study stated.
Moreover, as of June 2021, nearly half of all New Mexicans were enrolled in at least one income support or health program from the state Human Services Department, according to the LFC. That level of enrollment underscores the state’s chronically high poverty rate.
Under such government programs, a household can lose income support benefits if its income increases, the LFC reported, so, the value of the increased income “may not outweigh the loss in benefits, which can create work disincentives.”
Terrazas, who works in the funeral industry, told the Journal that he has had employees tell him, “I can’t make any more or I will lose my benefits.”
“Everything is a balance,” he added, “I’d like to see something where they are slowly weaned off that. We’re here to help them, but we also need to allow them a way to get back on their feet. Lifting them up is great, but, if we’re not careful, we can also hurt a person and make them dependent.”
At an annual job fair last month sponsored by Sen. Michael Padilla, D-Albuquerque, about 115 employers tried to fill some 6,000 jobs.
Eloy Padilla, a senior distribution manager with Creamland, was at the Albuquerque event hoping to hire about 16 new employees, with pay averaging about $20 an hour. But Padilla told the Journal he believes some people have gotten used to not working because of the benefits they received early on during the pandemic – and some they receive now.
“It was hard to get in with us,” Padilla said of hiring at Creamland prior to the pandemic. “And now it’s totally the opposite.”
Editor’s note: An earlier version of this story contained a graphic that described the number of job postings in New Mexico related to different industries. The graphic gave an incorrect year to characterize when those postings were made. The graphic has been removed.