Why Isn’t Warehousing and Storage Booming?

The Amazonification of American shopping marches on. And aided by e-commerce, the warehousing-and-storage sector has boosted employment by 52.5 percent since hitting bottom in December 2009.

Located at the core of the vibrant Southwest, New Mexico would appear to be perfectly positioned to take advantage of the phenomenon. But it isn’t. The chart below depicts average fourth-quarter employment in the industry between 2012 and 2016.

Source: Quarterly Census of Employment and Wages, U.S. Bureau of Labor Statistics

It’s not surprising, then, that the 2017 Manufacturing and Logistics National Report has once again given New Mexico a grade of “F” in logistics-industry health. (Each of our neighbors fared batter, with Texas earning an “A.”)

What attracts the warehousing-and-storage sector? A low cost of government is a major draw. In 2014, an industrial developer told the Las Vegas Review-Journal that Southern Nevada was drawing logistics firms because the MSA is near, not in, the Moonbeam State: “The most important thing is the business climate here versus California. Taxes are the primary issue and there’s no personal income tax in Nevada. Companies also search out a less regulatory environment and the overall cost of business here is cheaper.”

GRT reform/repeal, phasing out the income tax, a right-to-work law, infrastructure focused on roads and highways (rather than bicycles, commuter rail, bus rapid transit, and spaceports), regulatory relief, work requirements for welfare — plenty of policy options are available to draw warehousing-and-storage companies, and the solidly middle-class jobs they offer, to the Land of Enchantment. We’re waiting….

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