For Immediate Release: Tuesday, June 29, 2004

For More Information Contact: Kelly O'Donnell, Director of Research
(505) 792-5095

JOB GROWTH IN NEW MEXICO:

GOVERNMENT AND HEALTHCARE LARGEST EMPLOYMENT SECTORS;

STILL NO SIGN OF ECONOMIC STIMULUS FROM TAX CUTS

New national employment data released today by the Bureau of Labor Statistics show that New Mexico is adding jobs at a faster rate than most other states, but that job growth is not attributable to recent state or federal tax changes. New Mexico's employment growth is concentrated in sectors, such as government and publicly funded healthcare, that are financed by state tax revenue and thus threatened, not strengthened, by tax cuts. Conversely, according to the New Mexico Department of Labor, employment in the sectors expected to benefit the most from tax cuts - manufacturing, information, and business services - is either stagnant or declining.

New Mexico's Job Growth Among Fastest in Country
According to an analysis released today by New Mexico Voices for Children, the BLS figures show that New Mexico job growth in May, when the state added 2,800 jobs, was 8th fastest among the 50 states. Employment in New Mexico grew by 1.8%, or 14,300 jobs, between May 2003 and May 2004. New Mexico's 12-month growth rate is almost twice the national average and 7th highest among the 50 states.

New Mexico's Job Growth Due to Increased Health Care Services and Government Employment
New Mexico's largest employment sectors -- healthcare and state and local government accounted for more than half the job growth. Government employment increased by 3,500 jobs between May 2003 and May 2004. Local governments and tribal casinos accounted for most of the new government jobs. State government added 1,300 jobs. Federal employment, however, continued to decline, with a loss of 400 jobs in the last twelve months.

Health services grew by 4,300 jobs since May of 2003. According to the New Mexico Department of Labor, much of the growth in healthcare employment is due to home health care services provided through New Mexico's Medicaid program.

Tax Cuts Do Not Contribute to New Mexico's Job Growth
"New Mexico's job growth is occurring despite, not because of, state and federal tax cuts," says Kelly O'Donnell, Director of Research of New Mexico Voices for Children. O'Donnell points to a the letter from New Mexico Department of Finance and Administration Secretary James Jimenez directing all state agencies to submit flat budget requests for the next fiscal year (Albuquerque Journal June, 25 2004) as evidence of the looming state budget crisis. "As the revenue consequences of the recent tax cuts become increasingly severe, employment in our state's strongest sectors -- healthcare, education, and government - will cease to grow, and may even decline."

Population Growth Outpaces Job Growth
O'Donnell also notes that growth in New Mexico's working age population has outpaced job growth. According to figures from economy.com, New Mexico's working age population - people aged 20 to 64 - has expanded by over 18,500 people (1.7 percent) in the last twelve months.

"The Bush Administration's 'Jobs and Growth' tax cut plan was supposed to create millions of new jobs. New Mexico's economy is growing, but not in the places or at the pace that the administration promised. Analysis by the Economic Policy Institute at www.jobswatch.org shows that New Mexico and 48 other states continue to fall well behind job growth promised by the Bush administration.

The BLS numbers released today show the failure of the Bush Administration and tax cuts in general to help grow New Mexico's economy," said O'Donnell.

###