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County's unemployment rate high, but hope of recovery is on horizon

Local expert thinks jobless rate will stabilize after May

Mike Easterling
Farmington Daily Times
Lorenzo Reyes

FARMINGTON — While the unemployment figures for the state released last week by the New Mexico Department of Workforce Solutions may have been sobering, the report included at least a sliver of good news in that the state's jobless rate isn't as high as the national rate.

New Mexico posted an unemployment rate of 11.3% for April, nearly twice the rate of 6.3% when the COVID-19-related economic shutdown began. But the state fared better than the nation as a whole, as the U.S. unemployment rate for April soared to 14.7%, more than tripling the rate from a month earlier, which was 4.4%.

The news wasn't as good for this part of New Mexico. Of the four metropolitan statistical areas in the state, the Farmington MSA had the highest unemployment rate at 13.3%. The Albuquerque MSA was second at 12.4%, with Santa Fe third at 12.3%. The Las Cruces MSA fared best with a jobless rate of 11.6%.

San Juan County registered the fourth-highest unemployment rate in New Mexico at 13.3%. But some counties fared much worse, beginning with Luna County, which led the state with a rate of 17.6%. Taos County was second at 15.7%, and Lincoln County was third at 13.4%. Other parts of the state nearly matched the rate for San Juan County, with Sandoval County coming in at 13.1%, Bernalillo County posting a rate of 12.4% and Santa Fe County showing a rate of 12.3%.

"I think the numbers are pretty reflective of what's going on," said Jamie Church, the president and CEO of the Farmington Chamber of Commerce.

Dr. Lorenzo Reyes, the dean of workforce and economic development at San Juan College, said the April numbers were largely what he expected. But he added the official unemployment figures don't count many "underemployed" people – those who, for one reason or another, don't qualify for unemployment and therefore aren't counted by the government — so the reality is even worse than the statistics indicated.

"We were expecting the numbers to be high," he said.

While some restaurants have ceased operations completely during the pandemic shutdown, others continue to try to operate and keep workers employed through a take-out or delivery system.

While the jobless numbers are widely expected to be even worse next month when the figures for May are released, Church is hopeful the state and the county could see a bit of a rally as summer approaches.

"I think we still have a lot of industries trying to limp along," she said. "We're just moving into our outdoor season, and we've been coming out of a bit of a shoulder season."

Church said she has seen reports that indicate that tourist-driven economies like New Mexico's are beginning to see a rise in visitors in spite of the pandemic.

"Some places are seeing visitors from all over, especially in places where people keep a second home," she said. "They aren't seeing the unemployment like we are."

Church said her expectations for how much longer unemployment will continue to increase locally depend largely on how long Gov. Michelle Lujan Grisham's restrictions on business operations remain in effect. While the governor has eased restrictions for most of the rest of the state, those limits on business operations remain mostly in effect in San Juan County because of its high COVID-19 infection rate.

Jamie Church, president and CEO of the Farmington Chamber of Commerce.

"If we can move into phase one (restrictions), I think we'd stabilize," she said. "That way, we wouldn't be driving business into Colorado and people could be shopping and dining here. … It's essential we get into a phase one reopening."

Church said she would like to see some guidance issued by the governor in regard to large public gatherings such as festivals, which many communities rely on for an economic boost.

"Those things make up what your community is about," she said. "It would be nice to see those things begin to happen."

Reyes said San Juan County has been hit especially hard because the three main pillars of its economy — oil and gas, retail sales and the hospitality industry – have suffered from a market collapse or the imposition of restrictions on businesses.

Church said the impact of the oil market collapse can't be overlooked.

"With our large oil and gas presence, it has a huge effect because of the uncertainty," she said, explaining that the health of fossil fuels industries directly impacts other businesses across the state. When oil and gas firms are struggling, she said, everyone is likely to suffer.

"If you were planning to do an expansion or do a new product line, you're going to pull back and not do that," she said. "That, in turn, impacts your vendors, so there's a snowball effect."

Nevertheless, Church isn't willing to accept the idea that this economic downturn will be a long one. Under the right circumstances, she said, there could a turnaround before things get too much worse.

"I think it can be relatively quick," she said. "I'm not going to say it's not going to be painful."

Church said when all retail businesses are allowed to reopen, even at reduced capacity, she believes the worst of the crisis will be over. But she said it will be very important for those businesses to strictly adhere to social distancing guidelines in order to make customers feel safe about being in a public space again. She said the chamber recently released a video urging people to take note of businesses that are doing things right and share those observations with their friends and family members.

"I think there will some hesitancy about going into large groups," she said. "People will be looking at the safety precautions businesses are taking — are employees wearing masks, is there hand sanitizer available, are they observing social distancing protocols? I think once everybody can see that's happening and feel safer, then I think consumer confidence will go up."

Reyes expects the unemployment rate to hit 15 percent for San Juan County next month before it begins to recede. He warns that the recovery will be a slow one, somewhere in the neighborhood of 18 to 24 months, but he said much of that depends on how much progress is made in containing the virus and developing a vaccine.

In the long run, he sees the situation as a chance for San Juan County to reinvent its economy.

"This will be the best opportunity we have as a community to reskill and upskill the work force," he said.

Reyes said the Small Business Development Center has been working hard with local businesses to mitigate and minimize the damage from the shutdown by helping them secure government loans to keep their doors open. The next step, he said, will be offering them training in how to move more of their operations online and continuing to connect them with resources that can help them.

Reyes said San Juan County has weathered economic crunches before when the oil and gas industry has bottomed out, but he said the pandemic makes this one different. He said there's no reason the county can't emerge from this downturn with a stronger economy than ever, but that will require a lot of work.

Communities that are able to reinvent themselves and develop initiatives to attract new businesses are the ones that come out of these situations as winners, he said.

"You have to transform the educational opportunities for the population and develop skills that are going to be competitive not just in the state but around the nation," he said, adding that San Juan College is committed to making that happen.

Mike Easterling can be reached at 505-564-4610 or measterling@daily-times.com. Support local journalism with a digital subscription.