This story was originally published by Source New Mexico.
New Mexico is in dire need of more service workers, but the state hasn’t changed the industry’s low pay or minimal benefits that makes the job unsustainable for many. Instead, the Department of Workforce Solutions is focused on finding young adults to fill the roles that are being abandoned in favor of better paying positions.
Only a little more than half of New Mexico’s workforce is active, making its labor force participation rate just 56.9% in May, according to data from the U.S. Bureau of Labor Statistics. This is lower than almost all of the other states in the country. New Mexico has been on a gradual decline for the past few decades and is still recovering from the severe drop caused by the pandemic in 2020.
Ricky Serna is acting secretary of the Department of Workforce Solutions until Monday, when he becomes the N.M. Transportation Department leader. He said there are a number of reasons for New Mexico’s low labor force percentage rate, including competitive wages elsewhere, ongoing COVID concerns, the ability and preference to work remotely, and limited child care access.
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Vince Alvarado, president of New Mexico Federation of Labor, said the labor shortage not just in New Mexico but nationally and stems from states not paying workers enough.
Four key industries — service, teaching, nursing and social work — are facing worker shortages, according to the Legislative Finance Committee’s third quarter performance report card for the state. And though in 2021 the Legislature allocated hundreds of millions of dollars to draw people to the latter three professions, little has been done to boost low service industry wages.
A concentration of accommodation and food service jobs can be both good and bad for labor force rate, according to April’s Labor Market Review from DWS. Jobs in service industries can deter applicants because they offer lower pay and can require less skill and education, according to the review’s author, Rachel Moskowitz, the Economic Research and Analysis bureau chief.
But, she continues, some researchers argue low wages can actually boost the labor force participation rate because “more people in the household are now required to work in order to meet household needs.”
Daryl Wagmen has been working as a server and bartender at Outback Steakhouse on and off since 1999, a supplemental income to his salary as an international English teacher. With this line of thinking, Wagmen said people are forced to work 60-hour work weeks just to survive.
“I don’t think it’s a very strong argument to say, ‘Well, let’s keep their wages low, that way more people are working,’” Wagmen said.
To help with the labor shortage caused by competitive pay offered by other jobs, especially entry-level jobs like those in the service industry, Serna said his department is working on pilot programs to train youth workers “to come into entry-level jobs and essentially fill those positions as a result of that shift.” He said Carlsbad and Roswell have already held some of these programs.
And to avoid forcing people to relocate to metropolitan or central New Mexico to find work, Serna said DWS needs to work with the Economic Development Department to expand job opportunities in rural areas.
“We’re really trying to understand how rural and remote New Mexico communities can grow in their ability to offer good-paying jobs to New Mexicans,” Serna said.
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Fewer workers in vulnerable, low-paying positions
Many people are leaving entry-level jobs for other workforces that are offering higher wages, Serna said.
Almost 75% of workers making minimum wage in the U.S. fell under the service industry category in 2021, most of those being food preparation or serving jobs, according to the U.S. Bureau of Labor Statistics.
But New Mexico’s $11.50 statewide minimum wage doesn’t equate to a living wage, even for a state with a relatively low cost of living.
A living wage for a single adult with no children living in New Mexico is $16.25, according to the Massachusetts Institute of Technology’s Living Wage Calculator. Even two adults without children working in the state would need at least $12.84 an hour, according to MIT.
The federal minimum wage should be at least $20 an hour to keep up with inflation and living costs, Alvarado said.
“Look at the cost of fuel right now. Look at the cost of housing for an apartment right now,” Alvarado said. “15 bucks an hour? What is it – 15 times 40? That’s 600 bucks a week. Can you live on 600 bucks a week? Then you multiply that times 52: that’s $31,000 a year.”
Wagmen said just a server salary would be very hard to depend on solely for a sustainable income, he said. A tipped employee’s minimum wage statewide is $2.80 hourly for those making more than $30 in tips.
“Wages are pretty low right now, and it’s really hard to survive,” Wagmen said.
New Mexico had the 19th lowest cost of living in the U.S. in early 2022, according to the Missouri Economic Research and Information Center. But Serna said this low cost of living can actually decrease the number of people in the workforce.
“One of the double-edged swords for being an affordable state to live (in) is that it could very well result in two parent households determining that only one needs to work while the other stays home,” Serna said, “and those are real issues that will plague the participation rate.”
The U.S. Bureau of Statistics reported that men and women with children had similar labor force participation rates nationally in 2020. For parents with children under 18, the number of men and women who were employed was nearly even in March 2020. And just 10% more women than men were unemployed when it comes to parents with kids under 18.
But the pandemic heightened gender disparities in the workforce. Women’s jobs make up about 75% of positions lost in the pandemic, and women are still down nearly 400,000 jobs since the pandemic started, according to the National Women’s Law Center.
Lack of child care services can prevent people from working, but the state doesn’t require employers to provide those benefits. The state encourages those services, DWS spokesperson Stacy Johnston wrote via email.
“Essentially, we’re serving as a resource for employers by promoting creative strategies that increase worker recruitment and retention,” Johnston wrote.
Other benefits like health insurance and education pay also aren’t provided to a majority of service industry workers. In 2017, less than 40% of service workers were offered any medical care benefits, according to the U.S. Bureau of Labor Statistics.
Service industry workers are usually at a higher risk for contracting COVID than many others. They’re frontline positions that often can’t be done remotely. The peer-reviewed journal Health Affairs reported that women, people of color and people with low economic status are more likely to hold these positions and “have disproportionately experienced the negative health and economic consequences of COVID-19.”
Wagmen got COVID in early 2022 and said he isn’t sure if it was connected to the outbreaks his restaurant experienced.
“Even when you as a restaurant practice every safety precaution you can, there’s still this possibility of getting sick,” Wagmen said.
Serna said the state is trying to overcome barriers that the pandemic has created in these jobs, pushing for workers to wear masks and get vaccinated. But in a follow-up email communicated via spokesperson Johnston, she said the department supports the state government’s public health actions, including those around masking, testing and getting vaccinated — nearly all of which aren’t required anymore.
Megan Gleason is a journalist based in Albuquerque for Source New Mexico.
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