No ‘Answer’? No ‘Response’? Not Exactly…

Yesterday, the Albuquerque Journal asked, “What’s happening with New Mexico?”

Reporter Ellen Marks laid out the dismal statistics. The Land of Enchantment has the highest unemployment rate in the nation, “job growth … has slowed to a crawl,” and the state “has fewer jobs now than it did at the start of the recession in December 2007.”

New Mexico’s peak actually came a bit later, in February 2008, but it’s clear that the jobs situation here is abysmal. It’s been a few months since Errors of Enchantment looked at the list of states that have yet to surpass their pre-Great Recession employment levels. Since then, three underachievers — New Jersey, Rhode Island, and Maine — have scratched their way into positive territory. Five states are still falling behind.*

As the graph above shows, Wyoming’s in truly terrible shape. The Cowboy State is down 7.1 percent since its apex. Next comes Connecticut, land of perpetual tax hikes. (The latest round is sure to work!) But close behind, in the third slot, is New Mexico — behind 1.63 percent since jobs crested, nine years ago.

In addition to noting our “stagnant economy,” the Journal‘s piece offered a curious look into the thinking of the state’s taxpayer-funded pooh-bahs of “economic development.” Jeff Mitchell, director of the University of New Mexico’s Bureau of Business & Economic Research, offered the standard — and self-serving — talking point that places with “well-educated labor forces are doing well.” (That’s far from true in every case, but never mind.) But he also averred that, as Marks put it, “the Great Recession … brought deep and structural changes to the state’s economy.” The economist claimed that “something’s changed, and no one really has a good answer or response to the problem.”

The Rio Grande Foundation begs to differ. The latest edition of Rich States, Poor States, published by the American Legislative Exchange Council, notes that states that tax and spend less “experience higher growth rates than states that tax and spend more.” So New Mexico, with a cumbersome gross receipts tax, severe addiction to federal spending, no right-to-work law, a vast welfare state, scary unfunded liabilities, and out-of-control “education” expenditures, is at a distinct disadvantage. (See the graph below for a look at how the state fares on ALEC’s variables.)

Sadly, free-market, limited-government policy options aren’t palatable to the pols who appropriate the funds for Mitchell’s salary. So, not surprisingly, he and his subsidized colleagues don’t make the case for right-sizing the public sector and empowering entrepreneurs as well as workers. New Mexicans who want to spark a sustainable revival of their state will have to look elsewhere for the tools needed to restore opportunity and prosperity.

* Forty-seven states experienced the same employment trend during and after the Great Recession — peak jobs just before the downturn struck, followed by a significant dropoff, then a climb back toward the previous level. But Michigan, Alaska, and West Virginia encountered different conditions, and are thus difficult to categorize. Jobs were disappearing in the Wolverine State well before the Great Recession struck. The Last Frontier lost only a small number of jobs in the downturn, then rebounded quickly, but has since fallen beneath its peak, driven by declining petroleum-linked employment. The Mountain State faced similar circumstances, rapidly regaining its employment level only to see jobs disappear in the coal industry in recent years. For these reasons, the three states are excluded from this analysis.