R.I.P. New Mexico

The new population figures are in, and since the 2010 census, the population of New Mexico has grown by a staggering 1%.  Or perhaps a better term is stagnation.

Most of the states surrounding New Mexico, the remaining states of the Southwest, had robust growth.  Texas grew by over 10%, Arizona by more than 8%.  While official numbers do not exist, it is rather obvious that if you discount immigration from Mexico, the population actually shrank.

The news gets even worse:  While roughly the same number moved out of the state as into it (about 50,000 people), the only age groups that are growing are the retired and the young adults (ages 20-24).  Working age (which you should read that as "tax-paying age") New Mexicans are shrinking in number--and the situation is not likely to improve soon.

New Mexico is losing its seed corn--well, it’s losing the young working-age adults, ages 25-40)--and way too many of them are college-educated young professionals.  New Mexico goes to great expense to educate these young people, with fine public colleges and then we lose them.

There are so many college graduates leaving that, despite the large graduating classes of the numerous state universities, in some recent years the total number of graduates residing in the state actually decreased.

Over the years, I have asked the students in a number of my classes how many of them planned to leave the state after graduation and the answers were always depressing.  Except for a few non-traditional students (that’s educationalese for "older students")--many of whom were already retired--and a few married students with extensive local family connections, the answer was overwhelmingly in favor of emigration to find jobs.  The most popular destinations were Texas, Colorado, Arizona, and California.

When you consider that tuition covers only a small part of the cost of educating a college student, it is commendable that a poor state continues to pay such a large amount (some estimates put it as high as $56,000 a student) to educate workers who promptly leave New Mexico. 

It is possible that the most expensive export crop from New Mexico is not our green chile, our pecans, or even the mountains of ugly turquoise we sell to tourists:  It is our educated young--our seed corn.  

As the population of New Mexico continues to age, the need for social services and health care will continue to rise, continually increasing the drain on state funds while, paradoxically, the number of tax payers will actually shrink.  Will the state government raise taxes forcing more businesses to leave the state?  Would the government dare to cut programs?

Unemployment in the state is rising, and new employment in the traditional industries is unlikely to rise.  Our largest employers are the research labs, the military bases, state agencies, the state education system, and hospitals--all of which depend on tax revenues.  In the face of shrinking budgets, some of these employers have already started laying off employees.

Obviously, the state needs to attract new employers so that we can create jobs.  New Mexico has a business income tax higher than any of our neighbors have, and while the state has started to lower the tax, this was done--predictably--in small steps.  While the rate has been lowered a little, we will not be competitive with any of the other states in the Southwest until 2018, at which time we will be slightly lower than…Oklahoma...but still much higher than the rest of the states.

I doubt the remaining tax decreases will ever happen.  Already, politicians are proclaiming that the experiment has failed:  “Taxes were lowered and no new jobs appeared.”  There are already cries to raise business taxes to help balance the budget.

It is very hard to determine what effect cutting business taxes have actually had on the economy of New Mexico.  The tax cut was small, recent, and occurred while the state had large fluctuations in the prices of oil and natural gas.  This is a small state, with a population equivalent to Houston's.  As the price of oil and gas fluctuates, so does the New Mexico economy.  When the price of oil dropped in 2016, the state coffers ran dry.  As the price has recovered slightly this year, the economy has improved--marginally.

There are lots of proposals on how to attract employers to the state, all of them made by politicians who have never employed anyone.  Among the suggestions are expanding high-speed internet, increasing spending on education, increasing intercity rail traffic, legalizing marijuana, and providing more job training.  The state has a long history of promoting unorthodox schemes to boost revenue:  We have built a deserted Spaceport, we have an empty tourist train, and we have loaned millions to Hollywood producers who will never pay this money back...All to no avail.

I’m sure that all of these innovative proposals might be attractive to some prospective employers, but I have a simple question I would like answered before the state spends the money on the next get-rich-quick scheme.

Why are there so many employers in El Paso?

Thirty miles south of New Mexico along Interstate 10, is the city of El Paso.  This will never be my favorite city, as it is dirty, crowded, badly laid out, and seems to be run by politicians too stupid to even be allowed in the New Mexico legislature. 

If you drive south from New Mexico, as you enter Texas, the highway is almost continuously lined with warehouses, factories, and businesses.  If any of these had located in New Mexico, it would have been big news.  Our governor recently made a speech because Facebook is building a facility in the state that will employ a hundred people.  If they were to hire two hundred people, we might declare a state holiday.

El Paso does not have high-speed rail, super-fast internet, or any more job fairs than New Mexico does.  They also do not have a Spaceport.  My university classes were full of Texas students for two decades, and they seemed intellectually on par with those from New Mexico.  While I support education, if there is a lack of it in New Mexico, it is not the reason there are no employers rushing to the state.

I'd like to offer three suggestions to attract employers.  First, finish lowering business taxes.  They are currently at 6%:  I would lower them to 4.5% to match Colorado, which is notoriously business friendly. 

Second, New Mexico needs to be a Right to Work State, like Texas, Arizona, Utah, Oklahoma, and Nevada.  This state strongly protects union jobs that the state has never had and since closed shop states rarely have expanding industrial bases, it only makes sense to stop being a closed shop state.  Since the only large unions in the state are all for public employees, perhaps we could compromise with the unions and allow those for government employees to remain closed shops.

The last suggestion is almost impossible to achieve, because it is simply not in the nature of New Mexico.  However, since I have already suggested the near impossible, why not ask for the moon?

New Mexico needs a stable legislature--one that will not reverse itself every two to four years.  The state needs to project the image of a state that will not, on a whim, pass legislation repealing the law of gravity, or making pi equal to 3.0 so it will be easier to teach to children.  Our state government needs the type of maturity and stability that will reassure potential employers that shortly after a new business opens here, the state will not decide on a whim to outlaw electricity or to allow businesses to be open only three days a week.  Getting the "Land of Mañana" to that point will take some time, so we need to get started (yesterday)!