How Bad Is Bad?
What the economic crunch means for New Mexicans
Miguel Garcia says he’s scared. The married father of one and grandfather of two hasn't had work since Aug. 1. After construction was completed on his latest job, a water treatment plant, Garcia's services were no longer needed.
He's in contact with his union representatives, but he says there's a long list of people ahead of him who are also looking for jobs. "My wife tries to understand," Garcia says. "She tries not to think about it too much."
Garcia's wife Vivian works 40 hours a week as a caretaker for the elderly. Even with that steady income, Garcia says he's struggling to make payments on his house and car. He says he fills out about 12 applications a week, but he can't look for a job every day because gas prices are so high. "There's a lot of people in the same situation as me or worse," Garcia says. "I just take it one day at a time."
There's a lot of people in the same situation as me or worse. I just take it one day at a time.
Miguel Garcia, construction worker
Garcia says he thinks people in power should do what they can to assist those in need. "I hope this government helps the poor workers," he says. "I hope somebody can speak up for us instead of helping the rich people."
Could Be Worse
Stories like Garcia's are becoming more common. Carrie Moritomo, spokesperson for the New Mexico Department of Workforce Solutions, says the state's unemployment rate reached 4.6 percent in August. That's up from 4.1 percent in July and from 3.4 percent in August of 2007.
Albuquerque's jobless rate follows a similar pattern. The city's unemployment climbed to 4.7 percent in August, slightly higher than the 4.2 percent in July and up from 3.4 percent in August of last year.
It's not as bad here as it is in other places.
Terri Cole, president and CEO of the Greater Albuquerque Chamber of Commerce
According to Terri Cole, president and CEO of the Greater Albuquerque Chamber of Commerce, people hit the hardest in the city are car dealers, realtors and housing construction workers. "Those three sectors are pretty slammed," Cole says. "But those industries in other parts of the country are getting devastated. It's not as bad here as it is in other places."
Gov. Bill Richardson's spokesperson Gilbert Gallegos echoes Cole's sentiment. In an e-mail, Gallegos notes, "While unemployment has crept up in New Mexico as a result of a struggling national economy, our unemployment rate is still a full percentage point lower than the national average."
Albuquerque and New Mexico's jobless rates are lower than the 6.1 percent national average. Part of the reason for the discrepancy, Cole says, is the large number of government jobs in New Mexico and Albuquerque. "We're pretty insulated," Cole says. "We don't get the boom that everyone else does, but we don't get the dip either."
While he acknowledges things are worse in other parts of the country, Larry Waldman, senior economist at the Bureau of Business and Economic Research at UNM, says there is cause for concern. "We're struggling," Waldman says. "Job growth has just about slowed to zero and people are hurting."
It doesn't make me feel good to save the bacon for people who have been reckless. But I recognize this is one of those situations where, if you tip over the edge, it's going to be very difficult to pull us out.
Larry Waldman, senior economist at the Bureau of Business and Economic Research at UNM
Wall Street and New Mexico
Though it's a long way from New York City, Waldman says Wall Street’s woes will have an effect on New Mexicans. It'll be harder for Americans to borrow money, he says, and financing or refinancing a home will be more difficult. Pensions will also be negatively affected by the crisis, he says. Less people able to borrow money means fewer folks putting cash back into the economy. That's an ominous sign for the country's financial status, Waldman adds.
Though he finds it hard to stomach, Waldman supports a multibillion-dollar buyout proposal like the one discussed in Congress. He says it's the best way to try to stave off a depression, though it means lending a hand to the Wall Street executives who helped put the country in turmoil. "It doesn't make me feel good to save the bacon for people who have been reckless," Waldman says. "But I recognize this is one of those situations where, if you tip over the edge, it's going to be very difficult to pull us out."
Carol Miller disagrees. She's the independent congressional candidate in New Mexico's northern District 3. Miller would ask that each troubled financial institution be dealt with on a case-by-case basis. She would also push for a time limit on when the money can be paid back to the taxpayers. "The bailout is the equivalent of giving them a credit card with a $700 billion limit," Miller says. "Why shouldn't they have the same accountability to their creditors that you or I do?"
Miller says in a news release any plan intended to help the financial industry should be carefully studied and not quickly approved by Congress. “No good legislation has ever been passed in a rush without time to hold hearings, hear from constituents or even carefully read the bill in its quickly changing versions,” Miller says. “If there is money to bail out the richest corporations and wealthiest people in the country, we must include items that will benefit all Americans.”
Although he agrees with many of the criticisms of the bailout, Waldman says he hopes the financial disaster will mean more government regulation of Wall Street. "We need to make sure this never happens again," Waldman says. "I think this bailout is going to take away some of the financial sector's ability to do things that lead to instability."
On Monday, Sept. 29, the House voted 228-205 against the bailout.
Hope on the Horizon
Gary Bradley is an economist and research director for New Mexico Voices for Children, an advocacy group for working families. He says the federal government should pass another economic stimulus package. Bradley argues the last package significantly raised New Mexicans’ income and helped give Americans enough spending money to keep the economy afloat. "It raises the national debt a little," Bradley says, "But that's what you do in a recession."
While he says he might support another stimulus package, Waldman says it's unlikely one would pass. The national debt is already at $8.6 trillion. "I think Congress would balk at spending that additional money," Waldman says.
Despite New Mexico’s troubles, Waldman says help is on the way—although it'll be awhile before it arrives. He notes that Fidelity Investments, Schott Solar, Advent Solar and a Hewlett-Packard call center will bring hundreds of jobs to New Mexico over the next two years. "Things are going to be tough in New Mexico for about a year," Waldman says. "But we've got some things in the pipeline."