Employment Ebb

Persistent trouble hiring for local businesses driven by multiple factors, economists and Santa Fe city officials say

Business owners across sectors in Santa Fe have struggled to fill their workforces for months, even as indicators such as gross receipts tax revenue pointed to the city’s economic recovery.

Multiple forces drive the stagnant hiring, city officials and economists tell SFR, including health concerns, a child care shortage and career changes.

Plus, the pandemic hit Santa Fe particularly hard in terms of job losses because its economy is reliant on customer service industries, says Michael O’Donnell, acting director of the University of New Mexico’s Bureau of Business and Economic Research. That’s made staffing up difficult.

Santa Fe has “had a bigger hole to dig out of,” O’Donnell says, adding that other New Mexico cities that were hit hard with job losses at the beginning of the pandemic bounced back fairly quickly, but that hasn’t been the case for Santa Fe.

Those nuances run contrary to a popular narrative that emerged about this time last year across the country, as business owners and lobbyists, mostly in the restaurant industry, lamented understaffing in one news story after the next—often blaming their difficulty finding workers on people cashing in on unemployment or stimulus checks.

Overheated coverage included reports from Albuquerque in which fast food joint franchisees and restaurant owners blamed a lazy potential workforce for hiring struggles. And though Santa Fe has largely been spared the horror stories, some business owners have raised the specter of a deadbeat working class in interviews with SFR in recent months.

The numbers do, in fact, still look depressing. New Mexico has seen a 1.6% decrease in its labor force participation rate—the percentage of the working-age population that’s employed or looking for employment—between December 2019 and December 2021, when the rate hit 57%. The nationwide rate last December, meanwhile, was 61.9%.

The participation rate isn’t regularly tracked by county because county populations are difficult to estimate monthly, says Stacy Johnston, spokeswoman for the state Department of Workforce Solutions.

The Santa Fe Metropolitan Statistical Area had an unemployment rate of 4.6% in December, slightly higher than March 2020, when the pandemic began and the rate was 4.4%.

In analyzing businesses’ trouble hiring, O’Donnell says it’s important to look at the participation rate rather than just the unemployment rate, which is the number of unemployed people as a percentage of the labor force.

“If the labor force size falls, the unemployment rate can fall also, even if it’s the case that you don’t have more people employed,” O’Donnell says.

The state’s most recent Labor Market Review lists health concerns as one potential reason for the participation rate decline.

Fears about getting sick or exposing vulnerable family members to COVID-19 have kept some people out of the job market, says Ali Arshad, who teaches economics at New Mexico Highlands University.

“People are always worried about falling sick and having to pay tons of money for health care,” Arshad says.

Rich Brown, director of the City of Santa Fe’s Economic Development Department, cites two reasons for hiring struggles in the city. One of them is a child care shortage, which predates the pandemic but has been exacerbated over the past two years, particularly when schools were operating remotely.

O’Donnell agrees that it’s likely a major factor.

“I think that the increase in costs of child care and the difficulty there make it so that if you are somebody working in some of these industries, it might not make sense for you to go back to work,” O’Donnell tells SFR.

Another factor, Brown says, is people switching jobs.

“People are pivoting,” Brown tells SFR. “We’re trying to figure out where they might be going so that we can establish job training…I think there’s a cushion [from the volume of job openings] that allows some workers to say, ‘I’m going to find my own way and I have a little bit of time to do that,’ knowing that there are a lot of open jobs.”

Take Emilio Nava.

The 25-year-old worked as a custodian at the Georgia O’Keeffe Museum for nearly two years. He says the museum paid him decently and took care of him during the pandemic, plus the schedule worked well with his two kids.

But he wasn’t happy there, so he quit last year and took a cut to his pay and hours to pursue his passion and start budtending at local cannabis company Best Daze, where he’s now an assistant manager earning more than he was at the museum.

Nava says he thinks there’s a generational divide in how people think about jobs.

“We saw our parents and grandparents do a job that they weren’t necessarily happy about for all of our lives,” he says. “I think we just watched so many people that we love struggle that we figured, well, if we’re gonna struggle, might as well struggle while doing something we love. I think our generation isn’t afraid of the failure aspect of it anymore.”

O’Donnell points to economic restructuring that’s happened over the past half century, and how events like the Great Recession have shaped people’s views on work.

“I think there has been this trend over time, at least with a portion of the population, that they feel they need to follow their dreams,” O’Donnell says. “Things obviously aren’t like they were in the ‘50s and ‘60s where we had this large workforce that worked for their employer for 25 years and then collected their pension.”

Looking forward, Arshad says he thinks some businesses have taken steps in the right direction by raising wages and creating flexible schedules. Universal health care and federal minimum wage increases and paid sick leave would be more significant, impactful steps, Arshad says.

Starting in July, all private sector employees in New Mexico will accrue one hour of paid sick leave for every 30 hours worked.

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