million a day is how fast New Mexico’s unemployment insurance trust fund is getting drained, according to the Legislative Finance Committee.
The LFC’s 2010 “Post-Session Review,” a 123-page overview of the state’s financial situation, contains any number of dubious assumptions. The most significant may be its timeline for economic recovery.
The LFC expects the state employment rate to decline 3.5 percent through the fiscal year ending in July. After that, job growth will pick up, increasing by 1.6 percent in the next fiscal year. In a few years, New Mexicans will be back to work as though the Great Recession never happened.
That scenario depends on many things going right that are beyond the control of anyone in New Mexico. Elsewhere, the report contains cause for pessimism.
For instance, the state’s unemployment insurance trust fund is bleeding. Only two years ago, the LFC says, “the fund was among the most solvent in the nation, with a balance of $553.3 million.” Now, LFC projects it will run out in nine months.
And if New Mexico’s unemployment rate continues to rise, increases to the unemployment insurance contribution by employers will likely continue, the LFC report says.
It gets worse. SFR’s analysis of the latest jobless figures suggests at least 35,000 out-of-work New Mexicans aren’t receiving unemployment benefits.
The US Bureau of Labor Statistics counts unemployment several ways. The “official” unemployment rate is widely considered an undercount. More relevant is an alternative measure the BLS calls U-6, which also includes part-timers who’d rather work full time and “discouraged” workers who’ve given up looking.
As of March, that number made up 14.5 percent of New Mexico’s labor force, or 116,000 people. Also last month, the New Mexico Department of Workforce Solutions handled approximately 85,000 new or ongoing unemployment claims.
Which means roughly 1 in 4 working-age New Mexicans who can’t find steady work receive no jobless benefits. With luck, some may be eligible for the minimum $16 monthly food stamp allotment.