New Mexico posts second-highest unemployment rate in country in May
State's jobless rate of 8% is worst in Southwest region
- New Mexico's jobless rate fell slightly in May, going from 8.1% in April to 8.0%.
- That reduction has not been enough to keep pace with other states in the region or across the country, where unemployment has fallen much faster.
- The national unemployment rate for May was 5.8%, down from 6.1% in April.
FARMINGTON — Despite the fact the unemployment rate in New Mexico has not increased for four straight months, the state now has the highest jobless rate in the nine-state Southwest region and the second-highest rate in the country, according to figures from the New Mexico Department of Workforce Solutions and the U.S. Bureau of Labor Statistics.
New Mexico's jobless rate fell slightly in May, the most recent month for which statistics are available, going from 8.1% in April to 8.0%. The unemployment rate hit 8.7% in January, then began a slow decline, going down or remaining the same every month since then.
But that reduction has not been enough to keep pace with other states in the region or across the country, where unemployment has fallen much faster. The national unemployment rate for May was 5.8%, down from 6.1% in April and less than half of the 13.3% rate from May 2020.
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The only state with a higher jobless rate than New Mexico in May was Hawaii, with a rate of 8.1%. California was third with a jobless rate of 7.9%. Those are the only three states in the country with an unemployment rate of 7.9% or higher.
There are several states at the opposite end of the spectrum, according to the BLS. New Hampshire had the lowest rate in the country at 2.5%, while Nebraska and Vermont were close on its heels at 2.6%. In all, 27 states posted a jobless rate that was lower than the national rate, while a dozen states and the District of Columbia were higher. There were 11 states where the unemployment rate was not significantly different from that of the national rate.
In the Southwest region, Utah had the lowest jobless rate at 2.7%, followed by Oklahoma at 4.0% and Wyoming at 5.4%. Every other state in the region — Texas, Colorado, Nevada and Arizona, along with New Mexico and California — had an unemployment rate higher than the national rate of 5.8%.
The jobless rate for all parts of the country has fallen sharply since peaking early in the pandemic. The BLS says the U.S. jobless rate for May 2021 was 7.5% lower than it was in May 2020, while several individual states experienced an even more dramatic decline, led by Nevada (16.7 percentage points), Michigan (15.8), Hawaii (13.8) and New Hampshire (2.0).
The two locations that experienced the smallest decrease in unemployment rates since May 2020 were Washington, D.C., (1.7 percentage points) and New Mexico (2.0).
On the positive side, the monthly New Mexico Labor Market Review produced by the New Mexico Department of Workforce Solutions shows that the state has added nearly 40,000 nonfarm jobs — a 5.2% increase — since May 2020.
'Inefficiencies,' not a shortage
Elsewhere in the report, economists Nathan Friedman and Rachel Moskowitz examine the issue of whether New Mexico has a labor shortage, with many business owners throughout the state reporting they are experiencing difficulty hiring workers despite the state's relatively high unemployment rate.
The authors cite figures showing that, in May, there were 69,997 people without a job in New Mexico who were willing and able to work, while 69,077 job openings were advertised. That worked out to a ratio of 1.01, a figure far below the ratio of 2.76 from November 2009, when the ratio peaked in the state. The authors explain the latter number implies a much more severe labor shortage in New Mexico then than currently.
Friedman and Moskowitz say the data reveals that the most severe labor shortage New Mexico is experiencing now exists in the health care and social assistance industry, especially for registered nurses. There were fewer than 7,000 registered nurses in New Mexico to fill the nearly 13,000 health care and social assistance jobs in the state for May, according to a graph presented in the report.
The authors argue that, in spite of several media reports that have focused on the difficulties those in the food service and retail trades are experiencing in hiring workers, those sectors of the economy are experiencing labor market inefficiencies instead of labor shortages.
"The state's reopening has brought a massive increase in the demand for goods and services, which businesses may be unable nor prepared to meet in the short term," Friedman and Moskowitz write. "Although the data does not indicate a labor shortage, there does appear to be labor market inefficiencies as businesses hire workers to meet pent-up demand."
The authors say another factor that can contribute to the appearance of a labor shortage include a mismatch between an applicant's education, experience and skill level to that of the vacant position. Still others include working conditions such as hours, pay, location and type of work, along with demographic shifts in the population.
The authors conclude by arguing that as "as vaccination rates increase and conditions return to normal, many of the other conditions hindering return to work (health concerns and child care) should resolve."
Mike Easterling can be reached at 505-564-4610 or email@example.com. Support local journalism with a digital subscription.