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 V.14 No.47 | November 24 - 30, 2005 

Guest Editorial

Low Wage Capital of America?

“Pobresito Albuquerque”—we're better than that

Congratulations, Albuquerque. According to the city's own website, we are near the top of every list of the cheapest places to do business. We are a leader on the who's who list of cheap labor, cheap office space and cheap real estate. No wonder so many Americans from other cities think we are still part of Mexico.

If current policies continue, Albuquerque is well on its way to becoming the Big Lots of the new economy. “Albuquerque: We don't necessarily have everything you need—but our prices are lower than anywhere else!” Or like one of my aunts used to say about her favorite hole-in-the-wall Chinese buffet: “The food isn't great—but, man, is it cheap!”

It's time we moved beyond this "pobresito" mentality that says we can't do better than low-paying jobs. We're better than that.

For example, some business and political leaders have recently trumpeted Albuquerque's ranking as the fifth best place in the country to do business by Forbes Magazine. What most of them don't mention is that ranking was based on the fact that we had the lowest cost of labor in the survey. In the same ranking, we were 109th in income growth, 50th in cost of living, and 129th in crime rates. (No surprise, given how closely crime and poverty are linked.)

Maybe some think low wages and stagnant income growth is how you build a great local economy. However, I believe our competition should be high-wage cities like Austin, Boston, Portland, Seattle and Denver. Not Calcutta, Juarez, Guatemala City or Jakarta.

A report by the UNM Bureau of Business and Economic Research on Bernalillo County employment and earnings, completed in 2000, indicates that our economic development policies have led to an above-average increase in the number of jobs, but we have fallen behind in terms of wages per job. This has held back the community's economic development and has reduced opportunities for our young people.

The specific findings include the following:

• Private sector growth in the number of jobs in Bernalillo County between 1979 and 1997 was 64 percent higher than the U.S. as a whole.

• However, the average earnings per job in the county (after adjusting for inflation) lagged behind the rest of the country. Earnings per job rose 2.7 times faster in all metropolitan areas of the U.S. between 1980 and 1997 than in Bernalillo County (12.7 percent for the U.S. compared to 4.8 percent for the county).

• In part, this took place because of a structural change in the local economy. Service sector jobs have grown rapidly and now represent nearly 42 percent of all local jobs. Relatively high-paying federal civilian and military jobs have declined.

• During about the last 10 years, about 12,000 new call center jobs have been created. The average starting salaries of these jobs in 2000 was about $8.40 per hour, or $17,500 per year.

We need to draw on the experience of experts, from Angelos Angelou, one of the architects of the Austin high-tech boom, to Ernesto Sirolli, an internationally recognized entrepreneurship consultant, to Richard Florida, author of the bible for creating or recreating unique cities, Rise of the Creative Class, to Michael Shuman, author of Going Local: Creating Self-Reliant Communities in a Global Age. Cities from Providence to Portland, from Chattanooga to San Diego, have figured out that recruiting new companies to our city by offering low wages will not build a long-term sustainable economy.

For Albuquerque to truly prosper, we need to believe one thing: It's not just the quality of jobs but the quality of life that will lead us to a prosperous future. In the new economy, the cities that attract the entrepreneurs, the investment and the best-trained workforce are the ones that offer the highest quality of life. These types of cities were studied by the likes of Richard Florida and described by the many others who preceded him such as former Labor Secretary Robert Reich. And these folks have argued that cities (like states and nations) will compete on the basis not just of how cheaply citizens will work—but how interesting, exciting, diverse and dynamic the city is as a place to live and raise a family.

In an effort to improve our local economy, we need to redouble our efforts to promote entrepreneurship while maintaining our unique places, environment and cultures, so we can attract entrepreneurs and companies seeking a better quality of life. Most importantly, we need to position ourselves as a high-wage city with industries such as renewable energy, aviation and digital filmmaking by providing a real strategy for supporting and developing those industries.

It is time to move to a new economic development model. Albuquerque needs to move into a better future, with more and better-paying jobs—a place where innovators, and the investment that follows them, want to call home.

But we can't do it on the cheap. Developing a high-wage economy based on renewable energy development, aviation and digital film will require a real public-private partnership on investment—not to mention leadership from both elected officials and business leaders.

So let's set our goals a little higher. In 10 years, let's make Albuquerque the high-wage, renewable energy, aviation, digital filmmaking capital of North America. Then, we can stay off the list of pobresitos.

The opinions expressed are solely those of the author.

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