New Mexico is struggling to get enough workers. A new report says programs to get people employed are falling short.

Last year, New Mexico had one of the lowest workforce participation rates in the country. And the system to fix it — particularly the state’s 26 workforce connection centers — is falling short, according to a New Mexico Legislative Finance Committee report released Wednesday.

“Individuals who use WCC in New Mexico do not have better employment outcomes than those who do not,” the report said. “Furthermore, the state’s performance for basic career services consistently ranks in the bottom fifth of states.”

At a Wednesday hearing about workforce development programs around the state, LFC program evaluator Allegra Hernandez called the current infrastructure to connect job seekers and employers entrenched and outdated. Hernandez recommended more creativity, collaboration and evidence-based solutions to reach disengaged New Mexicans. The report details aging infrastructure at the sites — several were built in the 1960s — and out-of-date technology.

And, as survey data collected by the LFC suggests, most people who use the training program at the centers don’t complete them. Only a small number leave the program because they found jobs.

Those jobs also might not pay enough to pull people out of poverty or off of government assistance. The report said people using the centers often struggle to find steady employment offering livable wages. On average, people who used the centers ultimately started jobs paying an average of $16.59, which is above the state’s minimum wage but below the May 2023 median hourly wage.

“Even when clients of workforce centers attain employment after receiving services ... (it) is not enough for some people, especially those with families, to fully transition off of governmental income supports,” Hernandez said.

The need is great. The state needs about 40,000 more people between the ages of 20 and 54 to start looking for work to meet national averages, the report says. Since the 1970s, New Mexico has lagged behind the rest of the country in workforce participation; that gap has only increased in recent years.

“The state spent $322 million on workforce development and training across state agencies,” Hernandez said. “Despite this considerable investment, there are 206,000 able-bodied, prime working-age people in New Mexico who are not formally employed.”

The current system is “not effectively reaching the state’s disengaged population,” the report said.

As of January, the state had an unemployment rate of 4%. But that belies a struggle to get people facing employment barriers into the workforce, the report said, and the many jobless New Mexicans who are not currently looking for work.

“The state’s relatively low unemployment rate seems to indicate a tight labor market but does not capture the full picture — one where many New Mexicans are persistently disengaged from the labor force and face significant, systemic barriers to reentry,” the report reads.

Sarita Nair, the Cabinet secretary for the Department of Workforce Solutions, said at the Wednesday hearing that people could not be actively seeking jobs for a number of reasons, including disability, retirement or caregiving responsibilities.

Field representatives, she said, have identified challenges with housing, addiction and domestic violence as some of the biggest barriers to finding employment.

Nationwide, workforce connection centers are a byproduct of the New Deal and the Great Depression. But the job landscape has changed since then, the report said. Now, the basic career services offered at the sites aren’t enough to move the needle on employment outcomes, the report states. And their use is declining in New Mexico.

Nationwide, the number of workforce connection centers has dropped significantly since 2007, Hernandez said. But in New Mexico, that number has increased, despite several centers being identified as underutilized. Ten of the 26 centers averaged five clients per day in the first half of fiscal year 2024.

But Nair said the centers still have value, especially in areas of the state where internet access is difficult.

“We consider these to be a vital resource, especially given the rural nature of our state and the number of people who don’t have access to broadband,” Nair said. “It’s true that a lot of states are going to entirely online services, and I just don’t think it’s the right thing for our state.”

She said the data in the report doesn’t include the more than 7,000 businesses served by the department.

Both Hernandez and Nair said a concerted effort is needed to get more men into the workforce. State programs to help women with children gain employment have been successful, Hernandez said. Between 2010 and 2022, the workforce participation for women with children under the age of 6 increased by 12 percentage points in the state, and the rate for working age women in general increased by 2%. But while workforce participation for men nationally increased slightly in the same time period, it dropped in New Mexico by .2 percentage points.

“This is important and worth emphasizing, because the state has made significant recent investments in supports to make it easier for women with families to work,” Hernandez said. “These data strongly suggest the state’s targeted investments are paying off. It’s essential now that the state turn its attention to male participation, which remains fixedly behind the national average.”

The report recommends the Legislature consider expanding the working families tax credit to people without children and parents who don’t have primary custody to help boost employment among those groups.