N.M.’s job rate ticks up slightly in June

State still second worst in nation despite decrease in unemployment to 6.4 percent

New Mexico’s unemployment rate improved last month but still ranked as the second-highest in the country, according to a national survey released Friday.

The state Department of Workforce Solutions said 6.4 percent of New Mexico workers were unemployed in June, down from 6.6 percent in May.

Only Alaska posted a higher unemployment rate last month, and New Mexico’s jobless numbers remained far above the national rate of 4.4 percent.

New Mexico has gained about 19,300 jobs during the last year, with the construction and hospitality industries driving that growth. But months of declines in manufacturing, mining and government employment have continued.

“In effect, what you’re seeing is gains in the private sector being offset by losses — and fairly steep losses — in the government sector,” said Jeff Mitchell, director of The University of New Mexico’s Bureau of Business and Economic Research. “That is why the overall employment growth isn’t so great.”

State and local governments, including public schools and universities, have shed jobs as budgets shriveled, in part because of a sharp downturn in oil and gas prices. Oil and gas exploration are pivotal industries in New Mexico

because governments rely on them for tax revenue.

“It’s not so much that we’re overdependent on government [jobs],” Mitchell said. “It’s that government is too dependent on oil and gas.”

Though the energy industry has adjusted and is now pumping out record quantities of oil and gas in New Mexico, albeit it with fewer workers, the government agencies that relied on tax revenue from that sector are still feeling the consequences of the bad years.

The number of government jobs grew by 400 from June 2017 to July 2017, according to preliminary data from the Department of Workforce Solutions, the first such gain after similar reports over the last six months showed declining public employment.

Most of the state’s job growth came from the private sector. The hospitality industry added about 7,500 jobs during the last year and 3,500 people found work in construction.

Carol Wight, chief executive officer of the New Mexico Restaurant Association, said the restaurant industry has grown steadily for the last several years. She cited tourism in Santa Fe and Albuquerque, and said the uptick in oil drilling in the Permian Basin has buoyed restaurants in the southeast section of the state.

“What we hear from our members it that things are even better this year,” she said.

New Mexico has also boasted growing numbers of visitors.

In the construction industry, Joey Atencio, business manager at Local 16 of the Laborers International Union of North America, said work has picked up in the last year. He pointed to Presbyterian Healthcare Services’ construction of a new hospital in Santa Fe and expansion of a medical center in Rio Rancho. Facebook’s construction of a data center near Los Lunas is expected to provide construction jobs for the next several years, he said.

At International Brotherhood of Electric Workers Local 611, business manager Carl Condit said: “From what we’re seeing, it looks construction will continue to rise for a little bit.”

But Atencio said that the same financial problems squeezing government budgets are also casting uncertainty over funding for some construction projects.

Atencio and Condit said that many construction workers have gone looking for work outside New Mexico after years of economic stagnation.

“The economy had been so bad for so long, a lot of workers had left the state,” Atencio said.

“A lot of people are flocking to Colorado,” he added, referring to New Mexico’s northern neighbor where the unemployment rate is among the lowest in the country at 2.3 percent.

That has left the construction sector with what Atencio as well as Condit describe as a shortage of skilled laborers.

And it means some workers are no longer counted in the state’s unemployment rate.

The number of New Mexicans in the workforce only returned to 2005 levels at the end of last year, according to data from the U.S. Bureau of Labor Statistics. By December 2016, about 866,000 New Mexicans were in the labor force, a number the state has not seen since about April 2005.

“We’ve had a lost decade for job growth and wage growth,” Jon Clark, chief economist for the Legislative Finance Committee, told lawmakers earlier this week.

And while the health, hospitality and leisure sectors have grown, he added that those industries tend to pay less than the oil and gas business.