The Troubling Case of New Mexico’s Disappearing Workforce

There is widespread consensus that New Mexico’s economy is struggling. Unfortunately, when it comes to understanding the strength of both New Mexico’s and the US economies, traditional measurements of unemployment rates are misleading. That’s because the statistic only measures those who are actually looking for work.

Many economists and analysts including those at the Rio Grande Foundation believe that “workforce participation” is a better measure of the strength of a given state or national workforce. As the charts in this paper illustrate, New Mexico’s workforce participation rate saw incredible reductions during the recent economic downturn. And, while New Mexico is not the only state in the Southwest to suffer from relatively low workforce participation rates, it is indeed the lowest and the situation, while stabilized, shows few signs of turning around.