Imagine walking into your favorite local restaurant or shop, only to discover that it is closed indefinitely due to a worker shortage. Or worse, the business is still operating, but suffering from understaffing, which leads to long wait times and poor customer service. 

As of the last several years, these scenarios are becoming more and more common in New Mexico, where labor shortages are plaguing businesses of every size. 

Learn More: Understaffing Won’t Save Your Company Money 

What many outsiders don’t realize about New Mexico, however, is that hard work is deeply ingrained in the local culture. From the ranches of the eastern plains to the bustling cities of Albuquerque and Las Cruces, New Mexicans take pride in their ability to get things done. So why is it that the state is currently experiencing a labor shortage?

Read on to learn more about the New Mexico job market from the Sabio Systems team of experienced recruiters: the factors decreasing the labor force participation rate, and how a professional hiring agency can help business owners still stay competitive.  

4 Reasons New Mexico is Facing Labor Shortages

4 Reasons for NM Labor Shortage

1. History of low labor participation rate

In New Mexico, only about half of the workforce is active — 56.9% according to the U.S Bureau of Labor Statistics. This places our desert state as the fifth lowest in the country for labor participation rate currently, but the number of active employees has actually been on the decline for several decades

Before the COVID-19 pandemic tanked employment rates across the globe, New Mexico was already struggling to overcome several cultural and economic components that were negatively impacting the workforce. While just a few of these key factors are listed below, all of the individual considerations are exacerbated by the state’s compounded history of labor shortages. 

In states with higher overall labor participation rates, the bounce-back from COVID was difficult, but not insurmountable. New Mexico, on the contrary, is still struggling. 

Pro Tip: When choosing a recruiter to help scale your business, partner with an agency that has specific experience in navigating unstable markets, like Sabio Systems

2. Continuous population decline

Paralleling the gradual decline of the labor participation rate is New Mexico’s population in general. In the last 10 years, 60,000 more people moved away from New Mexico than those who moved in. 

The population decline has been accelerated by both COVID and the natural flow of time. The pandemic has caused over 9,000 deaths and counting, as well as pushing many to leave the state due to job loss or the need to care for sick family members. As for time: the older generation in New Mexico is aging out of the workforce at a higher rate than in many other states. 

Pro Tip: Working with a hiring professional can mitigate this issue, as your recruiter will have access to a wider range of candidates outside your immediate network.

3. Lower average wage

New Mexico is famous for a lot of things — incomparable green chile, sweeping vistas, rich cultural histories — but having competitive wages isn’t one of them. 

Our minimum wage does currently rank higher than most other states, but New Mexico’s average wage rate ranks lower than 35 other states, putting the state in the bottom 30%. 

The president of the New Mexico Federation of Labor, Vince Alvarado, recently attributed the major labor shortage issues to the national trend of paying workers too little. This is on track with the data available through the Massachusetts Institute of Technology’s Living Wage Calculator

In New Mexico, a single adult with no children would need to make a minimum of $16.25 an hour, working 40 hours a week, to reach a livable wage. With the minimum wage currently set at $11.50, it’s no wonder many active workers are moving to neighboring states with higher wages. 

Pro Tip: Under the guidance of a recruiting expert, businesses of any size can secure premier talent by offering unique compensation perks to supplement salary offers. 

Learn More: What Makes a Good Compensation Package?

4. Limited childcare services

Another factor contributing to the labor shortage in New Mexico — and across the nation — is limited access to affordable and reliable childcare services. 

While this issue may seem like a small piece of the puzzle, it’s a crucial one. New Mexico currently has the 6th highest percentage of unemployed mothers — nearly 75% of mothers with children aged 6-17 are not working. 

New Mexico’s famously low cost of living might make it possible for some families to get by on a single income, but the lack of childcare services presents a major barrier for working parents. With childcare costs rising at an average of 41% each year, many parents are choosing to save more money by staying home with their kids than returning to work. 

Pro Tip: By partnering with a hiring agency like Sabio Systems, you can attract top talent by considering offering benefits like on-site childcare, flexible schedules, or remote work options. 

The challenges facing the New Mexico job market are complex, but our team can help you find the best candidates even in the face of adversity.

Expanding your company with top-tier talent will not only help scale your business but also address a critical need in our community. Contact our team of experienced recruiters — together, we can work to create a more equitable and thriving job market in New Mexico.