Vote 4 NM: Diversifying New Mexico's economy
October 04, 2018 04:25 PM
ALBUQUERQUE, N.M.— New Mexico’s economy relies heavily on federal funding and the oil and gas industry, leading many to ask how the state can diversify.
In 2013, a federal government shutdown hit New Mexico hard.
For two weeks, many of New Mexico 29,000 federal workers experienced furloughs.
Private employers, reliant on federal spending, also felt the effects.
When the oil and gas industry crashed several years ago, state revenues tanked.
Editor-In-Chief of Albuquerque Business First, Rachel Sams, says New Mexico's multibillion-dollar tourism industry can also be unpredictable.
"So that was kind of tough during the recession because that's an area where if you have to make a cut in your budget, one of the first things you might cut is taking trips, taking vacations," she said.
Sams believes New Mexico needs more economic diversification.
According to data from the New Mexico Department of Workforce Solutions, 20 percent of jobs in the state come from the government, 14 percent are in health care and 13 percent are tied to leisure and hospitality.
Under Governor Susana Martinez, the state has tried to diversify the economy by adding tech jobs and trying to lure private companies to move or expand to New Mexico.
However, Sams says seeing the effects of those efforts could take years.
"It's a big job. I mean, it took many, I mean, hundreds of years to get to the point where we are now,” Sams said. “It's not something that next week we're going to wake up and have thousands of new jobs."
One-third of New Mexico’s revenue comes from oil and gas.
Economic development secretary Matt Geisel says the industry is doing great now, but it can fluctuate.
"We have a great oil and gas boom. We're really building up the reserves that the next governor will inherit," Geisel said.
New Mexico has also invested in the film and television industry. But most believe it’s not the industry that will secure New Mexico's economic future.
While some believe the key to solidifying the state's economy lies with convincing outside businesses to relocate here, others say the answer lies with helping companies that are already doing business in New Mexico.
“We have talent, ideas and a high quality of life here, now. I think we need to embrace that and support it in its development and stop looking at the situation, such as we need somebody else and the rest of the world to fix our problems,” said Jeffrey Mitchell, a UNM economist.
El Vado Motel, near downtown Albuquerque, is an example of a business that received government help.
It’s thriving with the help of other local artists and vendors.
“It's very important to us to keep everything within Albuquerque and boost the economy as well," said El Vado Motel’s manager Brooke Nelson.
Overall, Geisel believes the Land of Enchantment is heading in the right direction.
“We've assisted in the creation of 19,000 jobs in the Martinez administration,” Geisel said. “We're seeing a lot of private sector job growth."
Whether it's luring outside companies, developing local businesses or something else, it's unclear which areas make the most sense for the state to invest in or which idea would be the most successful.
No matter the idea, Sams says diversifying the economy could end up paying dividends in other areas.
“Having more jobs alone isn't going to solve poverty in our state,” Sams said. “It's not going to solve child well-being or domestic violence but all of these things are linked together and the better job we do at creating economic opportunities for people, the better opportunity we have to address more of those things and really make a difference in some of those things."
Updated: October 04, 2018 04:25 PM
Created: September 25, 2018 10:33 PM
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