Tax cuts not creating job growth

by Bill Jordan, Albuquerque Journal
June 22, 2017

New Mexicans are a tenacious and hard-working bunch. Those who are out of work spend longer looking for a new job than anyone else in the nation, according to the latest data from the U.S. Bureau of Labor Statistics. Weeks – even months – after workers in other states have found new jobs, New Mexicans are still hitting the pavement in search of a paycheck.

Part of the reason it takes so long to find a job here is that New Mexico has the (second-)highest unemployment rate in the nation. An unscientific online survey recently released by the state’s Department of Workforce Solutions offers some anecdotal evidence to the contrary. Employers choosing to take this survey said that they can’t find qualified applicants for the job openings they have. The DWS specifically states that conclusions cannot be drawn from the survey because the response rate was not large enough.

That didn’t stop the editorial board at the Journal from jumping to conclusions – not only that the survey must represent the majority of the state’s employment problems, but that it could all be blamed on all the lazy people who won’t take the scores of good jobs that are available (“N.M. unemployment isn’t because of a job shortage,” June 1).

The most salient fact that the editorial failed to consider is that the unemployment rate measures only those people who are actively looking for work. People who have given up on the job search are simply not counted. So the notion that New Mexico has a high unemployment rate because people don’t want to work is flat-out ridiculous. By definition, the opposite is true. The editorial also implies that New Mexico is overly generous with public assistance programs. However, income eligibility levels for food stamps and Medicaid for adults are set by the federal government, not the states. New Mexico has high levels of participation in these programs because we have a high rate of poverty. Unemployment is only partly to blame for our poverty. New Mexico also has the second-highest rate of working families who are low-income. Too many of New Mexico’s jobs pay low wages. It’s no wonder so many of our best and brightest are leaving the state for better opportunities elsewhere.

New Mexico has high unemployment because the state is not adding enough jobs. Our economy is sluggish primarily because the only economic development strategy we’ve followed is one of tax cuts for the well-connected. We’ve been trying and failing to “create” jobs this way for more than a decade. It’s well past time to give up on this failed strategy, roll back the tax cuts, and reinvest in the things that really do create jobs – human capital, public safety, and infrastructure.

These tax cuts – which made us too dependent on revenue from crude oil and natural gas – led to deep budget cuts to K-12 and higher education, among other vital services. Our kids are in over-crowded, under-resourced classrooms and our college students have faced multiple tuition increases, which have drained the lottery scholarship fund. Our business leaders – and the editorial board at the Journal, which parrots their talking points – need to own up to the fact that they can’t have it both ways. They can either have low taxes or they can have an educated workforce and safer communities. We can’t cut our way to prosperity.

While it’s easy to blame our economic and workforce problems on the workers, it’s simply not accurate. Tax breaks and spending cuts are what truly hold our economy back. We followed Kansas down the supply-side rabbit hole, but it’s finally figured it out and recently repealed many of its misguided tax cuts. New Mexico would be wise to do the same.

Bill Jordan is Senior Policy Analyst And Government Relations Officer for New Mexico Voices For Children

Via Albuquerque Journal (