The Rio Grande Foundation has been discussing the workforce participation problem in New Mexico for years. Our governor’s strict COVID lockdowns played a role in pushing New Mexico’s workforce participation rate downward. In January of 2020 the workforce participation rate in New Mexico was 58.7%. That rate dropped to just 54.4% by April. Just over two years later the workforce participation rate still sits nearly 2% below where it was before the pandemic at 56.9%.
“The Department (of Workforce Solutions) has experienced an increase in the number of unemployed who are receiving benefits without following through on their job searching requirements” – from Aug. 8 Journal “How New Mexico is looking to bring workers back.” The Department of Workforce Solutions was flooded with new accounts and hasn’t been able to properly enforce these requirements. In addition to the overwhelming number of recipients, the additional funds meant to alleviate damage caused by the pandemic have created a reverse incentive for reluctant workers.
While many policymakers are focused on the fallout from the COVID-19 pandemic, Rio Grande Foundation research shows this problem is decades in the making. Since 1999 the workforce participation rate has steadily been decreasing by an average of 0.37% per year. The decline for men has been more profound, declining at 0.44% per year.
The most profound change was in men age 20 to 24 where the workforce participation rate was 87.3% in 1999. That has steadily decreased to just 74.8% in 2019. For women in the same age range the workforce participation rate in 1999 was 67.6% and rose to 73.7% in 2019. All other age ranges had a similar decrease in workforce participation for both sexes.
One factor that appears to be contributing to the rapid decline in workforce participation rate in New Mexico could be the increase in single-parent households. In the year 2000 the percent of children in single-parent households was 33%. That rate has steadily increased at a rate of 0.45% per year to 44% in 2019. Looking at correlation statistics between the single-parent household data and the workforce participation rates from 2000 to 2019, there is a strong correlation between the two factors.
Reforms to state and federal welfare programs that incentivize single-parenthood and idleness are essential. The Department of Workforce Solutions must, at a minimum, properly enforce job search requirements. Setting a time horizon on entitlements New Mexicans are receiving by phasing out benefits over the course of one to two years – unless there is a specific inability to work – is another worthwhile policy. Reducing dependence on entitlement programs should be a top priority for policymakers.
Also, the Legislature, working through the Department of Workforce Solutions, should consider a campaign that seeks to encourage young men to get to work and encourages parents, primarily fathers, to be present in their children’s lives.
Many of New Mexico’s biggest problems: drug use, violence, family breakdown and poor educational performance, are directly related to a growing cultural acceptance of idleness and a non-participation in society. Encouraging New Mexicans, especially young males, to get into the workforce is a necessary and significant step toward improving our state in a broad array of metrics. It is time to use innovative approaches to get New Mexicans back to work.