Unemployment rate in state, Farmington area jumps again in December
Impact of tighter business restrictions blamed for setback
- The state's unemployment rate jumped from 7.2% in November to 8.2% in December.
- That figure compared to the 3.6% unemployment rate in New Mexico in December 2019.
- The jobless rate in the Farmington area climbed from November's 8.4% to 8.9% in December.
FARMINGTON — Although the news didn't come as any surprise, the fact that the unemployment rate in New Mexico and in the Farmington area increased in December after falling a month earlier has left local economic development officials feeling discouraged.
Figures released Jan. 26 by the New Mexico Department of Workforce Solutions reveal that the state's unemployment rate jumped from 7.2% in November to 8.2% in December, compared to the 3.6% unemployment rate in New Mexico in December 2019.
In the Farmington metropolitan statistical area, the jobless rate climbed from November's 8.4% to 8.9% in December — the highest of the state's four MSAs. That mark was considerably worse than the other three, as Santa Fe was lowest at 7.2%, while Albuquerque was next at 7.3% and Las Cruces was third at 7.5%.
When the November figures were released earlier this month, state officials essentially issued a disclaimer cautioning that those numbers did not reflect the impact of the new round of business operating restrictions imposed by Gov. Michelle Lujan Grisham late that month in response to a surge in the rate of COVID-19 transmission across New Mexico.
The negative effect of those restrictions was expected to be felt in the December numbers, and, indeed, they were.
Still, with the onset of the pandemic quickly approaching its one-year anniversary, it is clear those who work in economic development in San Juan County were hoping for better news as they ponder what has turned out to be a frustrating, one-step-forward, one-step-back recovery from the COVID-19-induced recession.
"I figured these numbers would be high," said Arvin Trujillo, CEO of the Four Corners Economic Development Inc. That organization is charged with leading a collaborative effort in the region to promote economic growth.
Trujillo noted that the regional economy has been dealt a double blow with the COVID-19 shutdown and the sharp downturn in oil prices, a combination of elements that he believes goes a long way toward explaining the Farmington area's high unemployment rate relative to the rest of the state.
Jobless figures across the nation, state and Four Corners region have shown a good deal of elasticity since the pandemic began, resulting in a lot of peaks and valleys rather than settling into a more traditional pattern of an initial sharp drop followed by a flat period and then slow, steady improvement.
Trujillo said that volatility is a reflection of the fact that this recession was induced by a pandemic that has continued in waves instead of being caused by more predictable market forces.
A lack of assurance
Jamie Church, president and CEO of the Farmington Chamber of Commerce, said she believes a lack of employer confidence is at the root of the high jobless rate. She argued that many business owners — particularly those of the mom-and-pop variety — aren't likely to take on new workers at a time when they aren't sure if the state's restrictions on businesses will allow them to serve customers.
The state's three-tier, county-by-county framework for allowing businesses to operate under less-restrictive measures, depending on the rate of COVID-19 transmission within county borders, isn't providing employers with much assurance, Church said. She said some counties in the state that made progress and were allowed to operate under a new tier with fewer restrictions just as quickly saw their status change for the worse when the transmission rate went back up.
"They don't want to hire people and then turn around and have to lay people off," Church said, describing what she believes employers are feeling.
The three-tier system (red for very high-risk counties with the most restrictions, yellow for high risk counties with fewer restrictions, and green for medium risk counties with the fewest restrictions) is prone to so much change, it makes it impossible for business owners to know what to expect.
"If you're an employer, how do you even begin to plan for that?" Church asked rhetorically.
She said the problem goes well beyond calculating labor costs and needs, as business owners also need to have a good idea of what to expect when they purchase inventory. Businesses such as restaurants or markets that feature a great deal of perishable inventory are in an especially bad position if they are located in a county that has regressed from green to yellow or yellow to red under the state's framework, she said.
A shrinking work force
Lorenzo Reyes, the dean of workforce and economic development at San Juan College, said San Juan County's historical reliance on three industries — energy, leisure and hospitality, and retail — has left it badly positioned to fend off the economic effects of the pandemic shutdown.
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"We don't have the economic diversity to rely on other industries to keep our economy going," he said, noting that government employment in the county has been the exception that has kept the recession here from being even worse.
Reyes said the data released Jan. 26 by the state included some even more disturbing news besides the unemployment rate. He pointed to figures that show the labor force in the Farmington MSA shrinking from 52,185 people in December 2019 to 49,733 a year later — a reduction of nearly 2,500 people.
"That's an indication of two factors," he said. "One is that we've had more families leaving the region, which is always a concern. The other is that people have given up and are no longer looking for work. I believe (the reduction) is a combination of both."
Reyes said a substantial decrease in the labor force like that is bound to have some serious social implications for the community.
He also cited figures from the report that show that there are more than 4,400 unemployed people in the Farmington MSA but only 1,400 job postings.
"There are more people looking for work than there are jobs available," he said.
To make things worse, he said, many of the jobs that are available require skills that those unemployed people don't have.
"You have to have some connection between supply and demand (in the labor force)," he said. "Demand is looking at this level of skills, and the supply can't match that. So you've got a mismatched work force."
Reyes said his college recognizes that mismatch exists and is doing what it can to provide local workers with the training they need to fill those openings.
"We're identifying short-term training programs to help people compete for the jobs that are available," he said.
One of those areas where help is needed is in health care, especially for medical assistants and certified nurse aides, Reyes said.
He said the college also is evaluating programs in the information technology field where it can offer short-term training programs and certifications, and he expects that effort to bear fruit soon. He said the college is working with foundations to secure grants and scholarship funds that will assist job seekers who are willing to enter those training programs.
As for the near-term future, there are mixed signals about how unemployment figures could go over the next few months. Church and Reyes acknowledged that the first quarter of every year historically is the slowest period for hiring, so that does not bode well for an improvement in the jobless rate. They also both worry about the impact of the recent increase in the state's minimum wage on the unemployment rate.
But Reyes holds out hope that the recent decline in the COVID-19 transmission rate across New Mexico, coupled with the availability of the vaccine, will have a positive effect on hiring for businesses in the retail, and hospitality and leisure fields.
Trujillo is anxious to see how the second round of stimulus funding passed by Congress in late 2020 impacts unemployment, and he believes a third round being considered now could give the economy another shot in the arm, especially if more citizens can get vaccinated quickly.
"I think that's bringing some confidence in people's ability to go and do their shopping in a safe manner," he said.
Over the long haul, he said the economic downturn has illustrated once again how vital it is for San Juan County to broaden its economic base. He hopes that increased cooperation between the Navajo Nation and the rest of the county allows progress to be made on such long-discussed projects as the establishment of a railroad spur and a build-up of broadband capabilities in the county.
"We're seeing some good opportunities down the road," he said. "But we've got to get this process moving."
Mike Easterling can be reached at 505-564-4610 or email@example.com. Support local journalism with a digital subscription.