During the second half of the post-industrial 20th century and the first decade of the new millennium, American businesses competed by the steady deployment of innovative technologies, through increasing economies of scale, and from offshoring of manufacturing and services. Through the last several years, however, the businesses that top their competitors roll out disruptive technologies, capitalizing automated processes. During the 1990s and 2000s, mom-and-pop businesses lamented the pervasiveness of big-box retailers. Since 2010, even the ubiquitous chain stores with guaranteed everyday low prices are fighting not be overtaken by online merchants.
The fact is, today’s businesses must adapt at a pace never before seen to keep their doors – hinged or virtual – open. Workers are required to adapt just as fast. New Mexico’s high school and college graduates cannot be merely prepared to enter the workforce; in this rapidly changing global economy, the skills of gainfully employed workers must be continuously augmented, integrated and aligned with the needs of New Mexico’s existing employers and those that might come here. This chapter focuses on alignment between higher education and employer workforce needs, across all types of industries.
New Mexico’s population shrunk in the last decade, and with it, the labor force. How can educational institutions quickly optimize the training of our labor force, both existing and incoming? How can they align with the rapidly changing needs of employers and for high-demand, high-skill, high-income occupations? Given the current labor projections, how might New Mexico avoid a workforce surplus of more college graduates than jobs?
Through much of the 2000s, New Mexico’s unemployment rate tracked with or was better than the national average. The state’s economy was creating jobs, and the population was growing, especially in metropolitan areas. In 2007, employment topped 900,000, and the state’s unemployment rate dipped to its lowest mark, at 3.7 percent. The state government was in surplus, largely due to oil prices.
However, New Mexico’s relative prosperity was unable to withstand the meltdown of global financial markets in 2007, which triggered the Great Recession in December 2007. Within a matter of months, New Mexico’s economy shed 50,000 jobs. The recession officially ended in June 2009, but rebuilding New Mexico’s economy has since lagged behind the nation, making our state one of a few to not recover its lost jobs. Albuquerque Business First, a multi-media news outlet, recently stopped publishing its “Recovery Index,” not because Albuquerque is again whole, but because the index is not changing much month to month. As of December 2017, nearly 880,000 were employed in New Mexico’s labor force, and the state’s 6 percent unemployment rate was considerably worse than the nation’s 4.1 percent and, among states, better than only Alaska’s.
In December 2017, among New Mexico counties, Union and Los Alamos had the lowest unemployment rates, both about 3 percent. The highest jobless rate, at 16 percent, belonged to Luna County. Luna has seen a decades-long run of extraordinarily high unemployment (as high as 37.5 percent in April 1996). 
In the decade since the Great Recession, New Mexico also lost people. New Mexico’s anemic recovery led to an out-migration of more than 37,000 people between 2010 and 2016. Thousands of those who left New Mexico were college graduates. Two of the largest groups in the exodus were professionals aged 40 to 54 and children aged 5 to 19. What that means is that, in addition to the educated workforce shrinking, a large number of school-age children will have left the state before graduating high school and entering one of New Mexico’s higher-education institutions, causing the future talent pipeline to further fall short of employer demand.
Nationally, Baby Boomers (the generation born between 1946 and 1964) are turning 65 at the rate of 10,000 a day and often retiring. Additionally, other groups of people are leaving the labor force. The nation’s labor force participation rate (LFPR) peaked in 2000, at 83 percent. The main reason the LFPR has fallen is a drop among prime age workers (ages 25-54). Declines in employment among young and prime-age adults stem in part from reduced trade and increased use of robots.
In 2016, New Mexico’s per capita personal income (PCPI) was $38,474, which places the state near the bottom nationally, ranking it 48th. (To compare, the national PCPI for the same year was $49,246.) Further, these relatively low personal income numbers contribute to the state’s overall poverty levels; roughly one in five New Mexicans live in poverty. Only Louisiana and Mississippi rank worse.
Within the state, regional disparities in pay can seem as far apart as the miles between them. For the second quarter of 2017, New Mexico’s average weekly wage (of full and part-time workers combined) was $823, including commissions, bonuses and overtime pay. Atop the list for counties’ average weekly wages is Los Alamos County, averaging $1,491 for second quarter of 2017. New Mexico’s oil-producing counties Eddy and Lea second and third on the list with $1,032 and $936, respectively. At the bottom of the list was Guadalupe County, where the average weekly wage was $572.
At the turn of the millennium, Rise of the Creative Class author Richard Florida estimated that 30 percent of the U.S. workforce – 38 million – was comprised of scientists, engineers, architects, designers, writers, artists, or others for whom “creativity is a key factor.” Florida predicted this group would change the way we work and the very fabric of everyday lives. Updating his work in 2014, Florida estimated the number of U.S. workers among the “creative class” at 50 million, with New Mexico’s share at roughly 225,000.
While the creatives make a key part of the workforce, most of our jobs are more traditional. New Mexico’s mix of occupations is similar to the rest of the county. Nearly half of all employment in the state consists of the three largest major occupational groups: office and administrative support; food preparation and serving-related; and sales and related. All three of these occupational groups paid less than the average of all New Mexico jobs in 2016, which was $44,160. (See Appendix J for information on earnings by occupation).
New Mexico has a less-educated populace than the surrounding states and the nation, and improvement is not expected in the near future. Analyses of educational pipeline data suggest that at least half of New Mexico students will not earn a college credential or degree by their mid-twenties.
It comes as no surprise that Colorado, whose median household income is roughly 40 percent higher than New Mexico’s, also boasts a well-educated population. More than half of residents hold at least an associate degree, compared with 38 percent in New Mexico. Possibly influencing Colorado’s level of income even more is the proportion of its workforce with a bachelor’s degree, about 43 percent.
Almost 29 percent of New Mexico’s labor force holds a bachelor’s degree or higher, but only a fourth of the jobs in the state require that level of education.  While this imbalance could be interpreted to mean some employers are overqualified for their positions, or underemployed, it is more likely that employers prefer additional skills beyond the posted minimum level of education and are drawing from this more competitive pool. These additional skills may have little to do with formal education; it is important to view education as only a part of the overall evaluation of how well the workforce aligns with demand.
In 2014, the New Mexico Department of Workforce Solutions (NMDWS) commissioned an employer survey to better understand job applicants’ qualifications and readiness, whether gaps existed between skills and job requirements, how those gaps affected employers’ productivity, and what employers were doing to bridge the gaps. The vast majority of employers reported they could find plenty of job applicants with the needed education levels, but about 47 percent had difficulty finding candidates with the actual needed skills. Many of the abilities applicants lacked could be characterized as “soft skills.” The abilities most cited by employers as deficient were:
Non-skill, “character-related issues” were cited as well. Almost a fifth of employers reported issues with work ethic, drug abuse, accepting supervision or teamwork. Because they were not able to find enough qualified applicants, 21 percent of employers reported a reduction in the firm’s product or service quality; 20 percent cited a reduction in output or sales. One in 10 said not finding qualified applicants prevented them from expanding their facilities.
Nearly three-fourths of employers surveyed provide training to employees, with the preferred method being in-house. When asked what level of training or education would be required for the organization to reach the desired level of productivity and competence, roughly half of employers said their employees would need a certificate or an industry-recognized credential.
Experts predict that the number of New Mexico jobs will grow from 853,910 in 2014 to 919,743 by 2024. Occupations that require high school or less are projected to add approximately 42,000 jobs. Jobs requiring a bachelor’s degree are expected to grow by 13,500; and jobs that require a master’s degree will increase by 2,300.
Based on the average number of graduates New Mexico colleges and universities recently produced, a simple gap analysis would suggest that we have an “occupation oversupply.” Economist Bob Grassberger explained in a recent workforce report on north-central New Mexico that this situation occurs when the average supply of workers exceeds the demand. One conclusion, looking at the table below, may be that if New Mexico’s economy does not create more jobs suitable for associate, bachelor’s and master’s degree holders, the brain drain will continue. Currently, New Mexico is essentially subsidizing education for the states to which our graduates relocate.
Level of Education
Projected Annual Openings, 2014-2024 (Demand)*
Average Annual Completions, 2010-2015 (Supply)
Average Annual Gap
Doctoral or Professional
Sources: Annual openings from NMDWS. Annual completions from Integrated Postsecondary Education Data Systems.
This table presents one way to view New Mexico’s education and workforce gap. Its results are surprising – in fact, reverse – from what most economic developers and educators would expect. From these data alone, it appears New Mexico is graduating almost 14,000 more college graduates a year than it has jobs for. However, NMDWS economist Ashley Leach warned there “are a lot caveats to consider, the biggest that we don’t really know how large or small the gap is without having more information on those program completers.” Some of these graduates likely accept jobs for which they are overqualified. Others leave New Mexico. Some become entrepreneurs, and still others are already in the workplace and earning their degree at the same time. Perhaps the most obvious answer is that New Mexico is not necessarily graduating people in the fields for which we have occupational openings. Whatever the reasons, the gap warrants further discussion and scrutiny.
For the 2014-2024 period, just three major sectors make up nearly two-thirds of all projected employment growth: healthcare and social assistance, accommodation and food services, and educational services.
The NMDWS projects the healthcare and social assistance sector will grow by 28,465 jobs by 2024. (For this reason, this report devotes the entire Chapter 5 to the healthcare workforce.) Two jobs requiring minimal formal education will deliver the vast majority of the annual job openings in this sector: personal care aides (at 1,080 each year) and home health aides (at 350 each year). The median wages for these jobs averages about $20,000 a year. Similarly, the accommodation and food services sector is projected to create 13,160 jobs by 2024. Many of the openings will be for waiters, cooks, bartenders and related fields. These careers pay an average of $17,000 a year.
All the “high demand” jobs above are described as requiring “No Formal Educational Credential,” and they all have a mean wage of less than half the state average in 2016. This volume of low-wage jobs – coupled with the workforce gap data in the table above – point to the critical question of how can New Mexico grow the number of high-skill, high-wage jobs to grow the economy in a smart way.
Given that the 2024 jobs outlook data show that many thousands of high-demand jobs in high-growth sectors are essentially low-wage jobs, New Mexico is at a crossroads. These jobs pay far less than the most recent PCPI of $38,474. New Mexico will not likely improve its poverty ranking we only create low-wage jobs. The best way to predict the future is to create it, and the gap between projected jobs and educated workers may be the evidence New Mexico needs to spur efforts to create a more purpose-driven economy.
For decades, the conventional wisdom of economic development was that geography, infrastructure or natural resources were lynchpins to a company’s location decision. And with such cost-driving assets, companies and industries may cluster to gain productive efficiencies. However, research now shows that human capital, measured by level of education, correlates directly with regional economic success. Places grow more rapidly where higher numbers of talented people live, and those places attract yet more talent. As a result, economic development focus more than ever on human capital.
New Mexico’s higher education institutions are producing certificate and degree holders at rates that outpace the number of jobs that need them. High unemployment and high poverty are telltale signs that talent is not aligned with the needs of existing and potential employers.
From 2013 to 2016, the New Mexico Legislature’s Interim Jobs Council advanced research to gather clarity and consensus on what it would take to get the state back to pre-recession employment levels. Through dozens of deliberations, the Jobs Council concluded that the state must create 140,000 economic-base jobs in the next 10 years. The Jobs Council identified eight basic sectors in which the state could create those jobs: employer recruitment, retention and expansion (traditional economic development activities); solo workers (performing full-time work from a home office, for example); startups; energy and extractives; visitor (tourism and business travel); film and digital media; federal government; and agriculture.
In its final summary report, the Jobs Council wrote that one of the greatest barriers to new economic-base growth is the lack of qualified workers. The report also said it is important to determine how many workers, with what skills, will be needed.
A model of local job-creation planning has been launched in Doña Ana County, which is part of the greater two-country, three-state region known as the Borderplex. Economic development efforts have long sought to promote the business advantages of the region’s geography, infrastructure and natural resources. Local development entities came to realize that their work might fail without a skilled and ready workforce.
The nonprofit organization Bridge of Southern New Mexico convened a broad group of community leaders to form the Workforce Talent Collaborative (WTC). The collaborative focused on eight industries with the greatest potential to succeed, based upon the assets already in place and their higher wages. 
The WTC sees itself as transforming the “future of the region by boosting the earning potential of its citizens,” its workforce plan reads. The group believes that providing people with skills and knowledge to succeed in higher-paying careers ladders will “ripple across the county in an economic cascade of increased incomes and buying power, along with improving every social determinant of health that has held back our citizens for far too long due to the pervasiveness of poverty.”
The WTC mobilized community members toward the goal of workforce talent development are among the barriers WTC identifies to “long-term cultural change in the community.” The WTC is, therefore, targeting members of the talent pipeline about area industries, their respective career opportunities, and the required knowledge, skills and abilities to be successful. In addition, the organization connects people to: skills assessments and skill-based credentials; available training resources; real-time job and career opportunities; and opportunities for the business community to be part of the solution.
WTC has developed “five ships” by which businesses can help build a “larger pool of skilled and ready talent”: leadership, mentorship, internship, apprenticeship and externship.
Innovate+Educate, a nationally recognized nonprofit organization headquartered in Santa Fe focuses on the adoption of new industry-driven, competency-based hiring processes that can create pathways to employment for workers left behind in the current system. The organization has an “assess, hire, train, advance” model to align the workforce with employers. The New Mexico Pathways Project is funded by the W.K. Kellogg Foundation to design education-to-employment plans to unify economic and workforce development. Thus far, the project has operated in five New Mexico regions: Bernalillo County, Doña Ana County, Gallup- McKinley County, Santa Clara Pueblo and San Juan County.
Each regional plan addresses barriers and uses real-time data, predictive analytics, demographics, economic data and critical input from the community. For example, the three-year plan for Gallup-McKinley County makes the following seven issues:
Innovate+Educate is also partner in TalentABQ, along with the City of Albuquerque, the W.K. Kellogg Foundation New Options Project, CNM, and the NMDWS. Launched in 2013, the progam is “a combination of job training, skills assessment and testing that will match could-be employees with employers … built around 26 centers that offer free services. In addition, Innovate+Educate plans to run a statewide pilot this year of a free soft-skills assessment, Core Score. The test will measure core competencies like critical thinking, communication and customer service.
New Mexico job-seekers who do not possess college degrees can get their job skills validated through the WorkKeys skills-assessment system. The assessments are conducted by New Mexico Workforce Connection “one-stop” centers across the state to connect job-seekers with hiring employers.
Interested employers can register with WorkKeys at local Workforce Connection offices. Through an agreement with ACT – the company that developed the college-entrance exam – any employer in New Mexico may use this tool without paying fees. The employer matches company-specific job descriptions with occupational profiles from ACT’s database of nearly 20,000 job titles. Each occupational profile lists skills and levels of proficiency needed for applicants to be successful.
WorkKeys has been used by Innovate+Educate in both its N.M. Pathways Project and TalentABQ initiatives. WorkKeys can screen for foundational skills (i.e., communication, problem solving and interpersonal skills) and performance skills (i.e., negative work attitudes and risky work behavior). When the assessments expose skills deficiencies, ACT closes the gaps by educating job-seekers with its online and interactive program, KeyTrain. Job-seekers who successfully complete the three assessments (applied math, locating information, and reading for information) receive a National Career Readiness Certificate.
Out of New Mexico’s 33 counties, only two are ACT-certified “Work Ready Communities,” as part of their economic development strategies – San Juan County and Quay County. With their certifications, they can more readily attest to the capabilities of the local workforce when potential employers are evaluating their communities.
New Mexico has 21 Workforce Connection Centers, whose charge is “to promote and align workforce readiness activities for adults, dislocated workers, youth, individuals with disabilities and senior workers.” In addition to administering the WorkKeys assessments described above, services include adult education courses, job-seeker assistance and vocational rehabilitation. Statewide, the centers served more than 65,000 people in 2016.
In addition to the physical centers, the NMDWS also offers a virtual Workforce Connection Center online with similar services. The website features an innovative career literacy tool, “Why I Work.” Program administrator Yolanda Montoya-Cordova said the tool enables users to plan their career in reverse, starting with the salaries required for the lifestyle they want. After determining their desired income, users view jobs that would provide sufficient pay. Job titles correspondingly list the educational attainment required. The tool even maps differences in pay and costs of living within the state.
The local centers are overseen by four local Workforce Development Boards, representing the northern, southwestern, central and eastern regions of the state. The boards promote business and community partnerships to grow local economies. In recent years, the boards advanced reforms to make the centers more effective, including aggregating multiple employment and social services under one roof. This change required coordination between the state departments of workforce development, economic development and human services. However, data integration between the core partners remains a challenge.
The first two chapters of this report address opportunities and progress among higher education institutions. Additional types of innovations exist, specifically for industry-specific coursework that can create a strong and versatile labor pool.
New Mexico community colleges are well-known for responding to industry needs. For the 2016-2017 fiscal year, CNM delivered almost 60,000 non-credit workforce training hours. Behind CNM for the same period were New Mexico Junior College (NMJC) and San Juan College, both topping 40,000 non-credit training hours. (See Appendix E for a list of non-credit training hours delivered by other New Mexico community colleges.) While the classes seldom offer hours for college credit, they provide critical job-specific training hours. Through fees and state funding, the training hours also provide the schools with an additional revenue source. For example, NMJC collaborates with training partners (such as other colleges or industry experts) to offer customized training to area employers. One example is oil and gas safety training using an OSHA-approved instructor.
Steve Sauceda, NMJC’s workforce training director, said courses are fueled by demand, which is determined through surveys and informal networking at Rotary clubs or chambers of commerce. Organizers take pride in their ability to ramp up or down as needed, and their willingness to take training to the worksite.  Similar examples exist at other institutions. Central New Mexico Community College offers Deep Dive Coding Bootcamp to train web and app developers and a Cybersecurity Academy, which is a potential growth area for New Mexico.
These types of targeted training may be particularly promising for New Mexico’s unemployed or “hard-to-employ” people. Concrete, hirable skills can make a huge difference for men and women trying to move out of poverty.
An often-cited economic development incentive for expanding New Mexico businesses, and recruiting businesses to relocating here, is the Job Training Incentive Program (JTIP). The program reimburses 50-75 percent of employee wages for up to six months of on-the-job training. Custom training at a New Mexico public educational institution may also be reimbursed. An additional 5 percent may be reimbursed to companies that utilize WorkKeys as part of their hiring process, hire recent New Mexico college graduates, or hire U.S. veterans.
The state Economic Development Department says JTIP has supported the creation of more than 46,000 jobs for New Mexicans in nearly 1,500 businesses.  JTIP-eligible companies are non-retail, economic-base employers creating new jobs as a result of expansion in or locating to the state. In addition to retail, employers in the agriculture, construction, extraction, gambling and healthcare industries are not eligible.
A recent JTIP survey shows 86 percent of employees who benefited from JTIP are still employed in New Mexico, 78 percent have seen wage increases, and 71 percent saw increases of more than 10 percent. In any given year, employer requests for JTIP grants outstrip the funding allocated to the program by the Legislature. In 2018, the Legislature allocated $9 million for the next fiscal year, short of the $12 million requested. To encourage greater investment in employee wages and capital, the state also offers training reimbursement through its Step Up Program. This program is part of JTIP but operates with different criteria, serving different types of employers.
While colleges across the county are producing plenty of certificate and degree holders, the widespread misalignment between education and the labor market has resulted in graduates saying they have buyer’s remorse. While they are generally happy with their decision to attend college, more than half would do things differently if they could, like choose a different major, school or credential.
Aligning college education and training more closely to careers, a recent Georgetown study argues, can be done effectively through a “learning and earning exchange” model in which:
To advance these goals, Georgetown recommends that states develop five sets of tools (most of which exist in New Mexico to some degree):
Greg Powe’s commitment to life-long learning has led to a rewarding career in New Mexico’s aerospace industry. For 22 years, Greg worked at the White Sands Space Harbor providing astronaut training and landing opportunities for the NASA space shuttle program. When the shuttle program ended, Greg realizing he needed to develop new skills to be marketable. He utilized resources from the NMDWS and enrolled in classes at Doña Ana Community College.
Greg believes that getting back into the workforce as an older employee was the biggest barrier he faced. However, the classes Greg took helped him to overcome the challenge. These courses improved his “professional tool box,” allowing him to gain skills in Microsoft Office programs, critical thinking, professionalism and leadership in the workplace, as well as resume building. Greg’s return to school paid off and he was hired by a private aerospace firm to be its facilities manager at Spaceport America. According to Greg, schools that foster a direct connection between employers and students through experiential learning, internships and apprenticeships provide the best ways to ensure student success and career fulfillment.
Update: Since the time of this interview, a company reorganization resulted in Greg finding himself on the job market. Due to his training and experience, he was quickly hired to do aerospace work for a Kansas company and has relocated there.
When New Mexicans imagine the economy of our future, most envision a wide array of jobs that are interesting, pay well and engage our people to stay in the state. However, when problems like “brain drain” deplete New Mexico’s talent pipeline, the labor force that remains must increasingly compensate for the absence. The higher education system’s ability to produce graduates who are valuable to the labor market relies on continuous engagement with employers. Additionally, on-the-job and other skills-based training is equally critical to New Mexico’s current and future workforce.
How can educators, workforce developers, and employers coordinate to meet today’s immediate needs and tomorrow’s desired future? While this chapter lays a foundation for answering that question, clues also lie in other parts of the report. Chapter 5 and 6 each address specific workforce needs for two critical New Mexico industries, healthcare and energy. Chapter 1 offers insights into direct worker training opportunities afforded through community colleges. And the fundamental ability to collaborate across institutions without duplicating efforts is a key topic of Chapter 3. Committed New Mexicans, coming together across interest areas, can find paths forward to advance our future.
 (Worstall, 2013)
 (Elliott, 2018; Petro, 2017)
 (NMDWS; USBLS)
 (Cole, 2018); OCD
 (Cole, NMDWS et al.)
 (NBER, 2010), (Cole, 2018)
 (Vadnais, 2017)
 (NMDWS, USBLS)
 (BBER, 2017)
 (Cole, 2018)
 (Krasnow, 2017)
 (Center for Economic Policy and Research, 2016)
 (Mui 2016; Center for Economic Policy and Research, 2016)
 (U.S. Bureau of Economic Analysis)
 (U.S. Census Bureau SAIPE Program, 2017)
 (NMDWS QCEW, 2017)
 (Florida, 2012)
 (Florida, 2012)
 (Florida, Maddox Distinguished Lecture, 2014)
 (NMDWS, 2017)
 (Southern Regional Education Board, 2015)
 (NMDWS, 2017)
 (U.S. Census Bureau SAIPE Program 2017; U.S. Congress Joint Economic Committee, 2017)
 (NMDWS, 2017)
 (NMDWS, 2017)
 (NMDWS, 2014)
 (NMDWS 2014)
 (NMDWS 2014)
 (NMDWS 2014)
 (NMDWS 2017; NMDWS In-Demand Occupations 2016)
 Grassberger says not to count the Baby Boomers out as they enter their expected retirement years. Many Boomers are taking spending a couple of years in retirement and then returning to the workforce, starting companies or volunteering. Because of modern life spans, Boomers can remain be in the talent asset column for many years to come.
 (Grassberger 2017)
 (NMDWS In-Demand Occupations, 2016)
 (NMDWS In-Demand Occupations, 2016)
 (NMDWS In-Demand Occupations, 2016) Note: High demand means more projected openings than 90 percent of all occupations and greater percentage growth than 75 percent of all occupations.
 The 2016 New Mexico First town hall Economic Security and Vitality for New Mexico yielded the recommendation “Advance a Purpose-Driven Economy,” which entails “a strong workforce, deploying an approach (such as ‘Human-Centered Design’) that enables individuals and communities to recognize, understand and overcome challenges through an action-oriented feedback and adjustment process.”
 (Florida, 2003)
 (Jobs Council, 2015)
 (The Bridge of Southern New Mexico, 2017)
 (Innovate+Educate, 2017)
 (Blivin, 2018)
 (ACT, 2014)
 (W.K. Kellogg Foundation, n.d.)
 (ACT, 2014)
 (ACT, 2018)
 (NMDWS WIOA, 2017)
 (Grassberger, 2018)
 (N.M. Association of Community Colleges, 2018)
 (N.M. Association of Community Colleges, 2018)
 (Sauceda, 2018)
 (Sauceda, 2018)
 (CNM Ingenuity, 2017)
 (NMEDD, n.d.)
 (NMEDD, 2017)
 (Davis, 2018)
 (NMEDD, 2017)
 (Georgetown news release, 2017)
 (Georgetown, 2017)