NMSU: Rural New Mexico Economic Conditions and Trends
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Authors: Community Resource and Economic Development Specialists, Department of Agricultural Economics and Agricultural Business, New Mexico State University.

Introduction

Between 2000 and 2007, New Mexico experienced population growth and an expanding economy, overall. Rural areas, however, lagged behind urban areas. This publication examines trends in key economic and demographic factors shaping rural life in New Mexico counties,2 including population, migration, employment, unemployment, farm income, poverty, education, and housing. Knowledge of these trends and their causes can inform the actions of policy makers and local officials seeking to meet the economic development challenges facing rural New Mexico communities.

Population Change in Rural New Mexico, 2000–2007

Population is considered to be a major local economic indicator. Various economic growth and poverty studies suggest that population (or population growth) and economic performance in a locality are positively correlated, but the causal relationship between these two variables is known as a "chicken or egg" issue. While it is plausible that localities with higher economic growth may attract more people, it is also conceivable that high poverty localities may experience population decline as some of the residents move out due to lack of employment opportunities. Contrary to the conventional belief, studies have found that some persistent poverty counties have not experienced much population loss; in fact, some of these localities even experienced population growth due to in-migration of poor people.

According to the U.S. Census Bureau, New Mexico's total population was about 1.97 million people in 2007. New Mexico population grew by 8.14% between 2000 and 2007. The national growth rate for this time period was about 7% . Figure 1 shows that New Mexico's population had steady growth between 1969 and 2007. Despite this remarkable population growth, the growth trend differs substantially between rural (nonmetro) and urban (metro) areas in New Mexico. Not only have rural counties lagged behind their urban counterparts, the gap has been widening since 1969. Between 2000 and 2007, New Mexico's urban population grew by almost 13% , but its rural population declined by 0.04% . Fifteen rural counties had negative population growth. Hidalgo county reported the highest population loss during this time period (-14.2%), followed by De Baca (-13.6%), Quay (-11.0%), Harding (-10.7%), and Union (-9.0%). While De Baca, Harding, and Union counties are categorized as farming-dependent counties by the USDA, Hidalgo and Quay are categorized as non-specialized. The rural counties that reported highest population growth between 2000 and 2007 are Luna (8.0%), Lincoln (6.4%), Roosevelt (6.4%), Cibola (6.2%), Lea (5.2%), and Taos (5.1%). The fastest growing county in the state, Sandoval (which is an urban county), is categorized as manufacturing dependent.

Fig. 1: Graph of population for metro and nonmetro areas in New Mexico, 1969�2007.

Figure 1. Population for metro and nonmetro areas in New Mexico, 1969–2007.

The critical demographic factor for population growth or decline in a locality in the United States is the mobility of people—given the relative stability of current birth and death rates in the country. Most of the rural areas in New Mexico lost more residents than they gained (Figure 2) between 2000 and 2007. Except for five rural counties (Cibola, Lincoln, Luna, Roosevelt, and Taos) that had positive migration, all the other rural counties lost residents during this time period. The loss of population due to out-migration is especially pronounced in Hidalgo, McKinley, and De Baca counties. While finding reasons for this decline requires an in-depth analysis, existing national studies point to loss of earning opportunities due to productivity gains in agriculture, urban-to-rural wage differences, higher unemployment in rural areas or better employment opportunities in metro areas, relocation of manufacturing plants in metro areas and suburbs, decline in farm programs, and lack of social and natural amenities.

Fig. 2: Map of population net migration of New Mexico counties between 2000 and 2007.

Figure 2. Population net migration of New Mexico counties between 2000 and 2007.

Government officials, business leaders, and economic development practitioners need to understand changes related to population. The existence of many rural communities is threatened by population declines that take away the ability of local governments to provide public services to their communities, further aggravating the population decline. These losses can increase the burden on those left behind, since they now have to bear higher costs in order to keep public services running. There is no doubt that strong farm economies have been instrumental in sustaining rural economies, but with the decline in the farm sector due to its inherent tendencies, off-farm employment opportunities, including non-farm self-employment, are becoming increasingly important in sustaining rural economies.

Employment

Employment growth is closely associated with population growth in a region. People change their places of residence based on availability of jobs and job market prospects in a locality. Population growth in a locality also creates new jobs, as there will be an increase in demand for basic services such as education, health care, roads, utilities, and retail businesses. Although nonmetro areas in New Mexico have almost always lagged behind their metro counterparts, the historical gap between metro and nonmetro employment growth appears to be narrowing in recent years (Figure 3). In 2000, New Mexico had 972,954 full- and part-time jobs, of which 310,343 (32%) were in rural counties. The respective numbers for 2007 were 1,115,677 and 351,311 (32%). Overall employment in New Mexico grew by 15% between 2000 and 2007. The employment growth rate during this time period for metro and nonmetro areas was 19% and 13% on average, respectively. From Figure 4, we can see that some nonmetro counties grew faster than other nonmetro counties. Two rural counties, Colfax and Quay, had a negative employment growth during this time period.

Fig. 3: Line graph of employment growth rate in metro and nonmetro areas in New Mexico, 1969�2007.

Figure 3. Employment growth rate in metro and nonmetro areas in New Mexico, 1969–2007.

Fig. 4: Map of total full- and part-time employment growth in New Mexico counties between 2000 and 2007.

Figure 4. Total full- and part-time employment growth in New Mexico counties between 2000 and 2007.

Table 1 shows employment numbers for various sectors in 2000 and 2007 and change in employment in the sectors for the same time period for rural New Mexico. The industries are ordered according to how many people they employed. According to this data, the education and health services sector employed the most workers, followed by trade, transportation, and utilities, and the leisure and hospitality sector. Rural areas in New Mexico had 242,251 employees in 2007, in all industries, including some jobs that the Bureau of Labor Statistics (BLS) could not classify/place into one of the 11 sectors listed in Table 1. During this period, employment in rural areas in New Mexico increased by 44,627 jobs. In terms of employment growth, the most important industry was professional and business services (13,522 jobs).3 It was followed by education and health services (11,204 jobs) and public administration (5,931 jobs). The employment change data also show that manufacturing and information sectors have suffered during this time period.

Table 1. Employment Changes in Rural New Mexico Counties, 2000–2007

Sector Employment, 2000 Employment, 2007 Employment change % Growth, 2000–2007
Education and Health Services 46,385 57,589 11,204 24.2
Trade, Transportation, and Utilities 41,190 42,379 1,189 2.9
Leisure and Hospitality 26,511 30,033 3,522 13.3
Professional and Business Services 13,635 27,157 13,522 99.2
Natural Resources and Mining 15,279 19,419 4,140 27.1
Public Administration 12,414 18,345 5,931 47.8
Construction 9,586 13,733 4,147 43.3
Financial Activities 7,375 8,565 1,190 16.1
Manufacturing 7,712 7,401 -31 -4
Other Services 5,461 5,946 485 8.9
Information 2,781 2,389 -392 -14.1
Source: Northeast Regional Project 1011, University of Georgia (www.georgiastats.uga.edu/sshare1.html), based on BLS data.

Specific changes in employment in the various sectors can be further analyzed using shift–share analysis (SSA),4 a widely used technique to examine changes in employment in a locality. SSA provides useful information about the characteristics of employment growth and change in local industries by decomposing changes in local employment according to local and non-local factors, and by identifying competitive industries in the local economy compared to those of a larger economy (the nation, a state, or a region). SSA helps determine whether a particular local economy has experienced a faster or slower growth rate in employment than the larger economy has experienced. Compared with the larger economy, jobs in a local economy may be concentrated in some industries more than others based on the industrial structure of the local economy. Table 2 presents a shift–share analysis for rural New Mexico using an online calculation tool available at www.georgiastats.uga.edu/sshare1.html. Local competitive advantage accounted for 66.7% of total employment growth in rural New Mexico counties between 2000 and 2007; national growth accounted for 15.9% ; and industrial mix accounted for 15.4% .

Table 2. Shift–Share Results for New Mexico Rural Counties, 2000–2007

Sector National growth component, Jobs Industrial mix component, Jobs Competitive share component, Jobs
Professional and Business Services 577 416 12,529
Public Administration 526 96 5,309
Education and Health Services 1,964 5,691 3,549
Natural Resources and Mining 647 435 3,058
Construction 406 863 2,879
Manufacturing 327 -1,875 1,238
Financial Activities 312 237 641
Trade, Transportation, and Utilities 1,744 -1,089 534
Other Services 231 149 105
Information 118 -548 38
Leisure and Hospitality 1,122 2,516 -116
Total 7,974 6,891 29,764
Source: Northeast Regional Project 1011, University of Georgia (www.georgiastats.uga.edu/sshare1.html).

Unemployment

The unemployment rate is frequently used as an indicator of overall economic performance in a locality. Although the unemployment rate is considered to be one measure of labor market conditions, periods of employment growth are generally associated with lower unemployment. Historical data for New Mexico since 1990 show a steady decline in unemployment for both rural and urban counties (Figure 5). The data also show that although rural counties have lagged behind their urban counterparts in this important economic indicator, the gap has been narrowing since 1990, and rural counties are almost on par with urban counties by 2007. One potential reason for this narrowing may be out-migration of unemployed persons from rural counties. Both rural and urban unemployment rates were lower than the national average (4.6%) in 2007. The trend seems to suggest that New Mexico's rural and urban unemployment rates will continue to decline in the future.

Fig. 5: Graph of trends in unemployment rate in metro and nonmetro areas in New Mexico, 1990�2007

Figure 5. Trends in unemployment rate in metro and nonmetro areas in New Mexico, 1990–2007.

Earnings

Figure 6 shows that although the average wage per job gap between rural and urban counties has widened since around 1985, it seems to have stabilized during the 2000 to 2007 time period. Rural wage per job rose 32% during the 2000 to 2007 period, from $22,724 in 2000 to $30,023 in 2007. Urban wage increased at a lower pace (27%), rising from $26,742 in 2000 to $34,014 in 2007. Rural counties with the highest wage growth per job between 2000 and 2007 were Lee (55%), Eddy (49%), Cibola (43%), Harding (43%), and Hidalgo (41%).5

Fig. 6: Graph of change in metro and nonmetro average wage per job in New Mexico, 1969�2007.

Figure 6. Change in metro and nonmetro average wage per job in New Mexico, 1969–2007.

Farm Income Trends

Figure 7 shows general trends in gross farm income by categories. The trends should be viewed with caution since these are gross income numbers not adjusted for expenses and cost of living. Livestock and related products income has rebounded sharply after a slight drop between 2005 and 2006. Even though not very noticeable, income from crops shows a steady increase throughout the time period. After a sharp increase in 2005, government payments have been declining for the last two years. Other income also slowed down after an increase in 2005. Figure 8 shows that 2000 through 2007 was a very turbulent time period for total net farm proprietors' income. Although the item has shown an upward trend from 2006 to 2007, it is still far below the highest value it reported in 2001.

Fig. 7: Graph of New Mexico gross farm income, 2000�2007.

Figure 7. New Mexico gross farm income, 2000–2007.

Fig. 8: Graph of total net farm proprietors' income, 2000�2007.

Figure 8. Total net farm proprietors' income, 2000–2007.

Poverty

Although the overall individual poverty rate in New Mexico declined slightly between 1979 and 2007, poverty persists in many counties (Figure 9). A total of 17 counties (52%) had a poverty rate of 20% or more, and 29 counties (88%) had poverty rate of 15% or more in 2007, according to the U.S. Census Bureau Small Area Income and Poverty Estimates. The poverty rate for the state of New Mexico fluctuated slightly around 17% over the time period between 2000 and 2007. The national average for the U.S. over the last three census periods was around 13% . Rural counties in New Mexico as a whole can be categorized as persistently poor (Table 3).

Table 3. New Mexico Poverty Rates

Year Poverty rate (%)
Rural Urban Total
1979 20.5 15.7 18
1989 25 18 20.6
1999 22 16 18.4
2007 (latest model-based estimates) 20.8 16.3 17.9
Source: USDA: http://www.ers.usda.gov/StateFacts/NM.htm.

These counties in general have had a poverty rate of 20% or more over the last three census periods. The national average for all rural counties in the U.S. has been fluctuating between 15 and 17% over the same time period. The USDA's Economic Research Service has developed a typology of high-poverty counties. This typology reflects racial/ethnic and regional differences in the character of these counties and is based on one of two conditions: (1) over half of the poor population in the county is from one of these minority groups or (2) over half of the poor population is non-Hispanic White, but the high-poverty rate of a minority group pushes the county's poverty rate over 20% . High-poverty counties are defined as nonmetro counties with a poverty rate of 20% or more based on 1999 income reported in the 2000 census. Of the 26 nonmetro counties in New Mexico in 2000, 16 were classified as high-poverty based on their racial/ethnic characteristics. Out of these, 13 were classified as Hispanic counties and 3 were Native American counties.

Fig. 9: Map of county-wide distribution of individual poverty rate in New Mexico in 2007.

Figure 9. County-wide distribution of individual poverty rate in New Mexico in 2007.

Education

Levels of education attained by rural New Mexicans are at historic highs. In 2000 (Figure 10), nearly one in six (17%) rural New Mexico adults had a four-year college degree. The respective national figure for rural areas in the U.S. was 15% . Almost 9 in every 10 rural adults had a high school education or more (including those who had a four-year degree). The share of adults who were high school dropouts in rural New Mexico, however, was at around 11% , which was slightly higher than the national average (10%) for 2000. The dropout rate for urban New Mexico was even higher, around 14% in 2000.

Fig. 10: Graph of education attainment in New Mexico.

Figure 10. Education attainment in New Mexico.

According to USDA Economic Research Service county typology codes, a county can be classified as a low-education county if 25% or more of its residents age 25 to 64 had neither a high school diploma nor a GED (General Educational Development) diploma in 2000. Research in rural economic growth and development generally suggests that these counties tend to underperform in job growth, as employers increasingly seek skilled workers. Figure 11 shows that there are four counties in rural New Mexico that fall into this category—Hidalgo, Lee, Luna, and McKinley (Doña Ana is a low-education county but not a rural county).

Fig. 11: Map of New Mexico low education counties in 2004.

Figure 11. New Mexico low education counties in 2004.

Housing Stress Counties

According to USDA Economic Research Service county typology codes, counties can be classified as "housing stress" counties if 30% or more of households had one or more of these housing conditions in 2000: lacked complete plumbing, lacked complete kitchen, paid 30% or more of income for owner costs or rent, or had more than one person per room. Figure 12 shows that nearly 46% of New Mexico's counties (or 15 out of 33) were housing stress counties in 2004; the national rate of housing stress in 2004 was 17% . All the metro counties in New Mexico in 2004 were housing stress counties.

Fig. 12: Map of New Mexico housing stress counties 2004.

Figure 12. New Mexico housing stress counties 2004.

Concluding Comments

This guide provides an assessment of the current conditions and trends in the socioeconomic wellbeing of rural people and places in New Mexico during the period of 2000 through 2007. It provides information for understanding the effects of demographic and economic trends and changes in population, migration, employment, unemployment, earnings, poverty, education, and housing in rural New Mexico counties. Based on the most recent data and information available, the guide shows rural areas in New Mexico experienced widespread population decline in the first half of the first decade of the 2000s (2000–2007).

During this period, New Mexico rural areas lagged behind urban areas on several indicators, including employment, earnings, poverty, education, and housing. Several rural counties, nevertheless, experienced positive changes with declines in unemployment, growth in per capita income, and rising earnings (Table 4). Shift–share analysis of employment changes also showed that, overall, rural New Mexico counties have a competitive advantage in producing jobs in several sectors, including professional and business services, public administration, education and health services, and natural resources and mining. Most important of all, rural New Mexicans today have higher average levels of educational attainment than at any time in the past three decades (Figure 10). Most studies show a high correlation between levels of educational attainment and economic development.

Table 4. County-by-County Summary of Key Economic and Demographic Indicators in New Mexico, 2000–2007

Area Name Population change 2000–07 (%) Net migration 2000–07 (%) Employ. growth rate 2000–07 (%) Unemploy. rate 2007 (%) Wage and salary per job 2007 ($) Total net farm proprietor income 2007 ($) Poverty rate 2007 (%) High school dropout rate 2000 (%) College graduate rate 2000 (%)
New Mexico 8 3.2 14.7 3.5 35,980 353,178 17.9 12.1 23.5
Bernalillo 13 7.9 12.3 3.3 38,535 -5,357 14.9 11.7 30.5
Catron -4 -0.5 20.9 4.6 26,613 -5,814 20.8 16.5 18.4
Chaves 2.1 -1.6 11.1 3.6 29,269 110,224 20.5 13.7 16.2
Cibola 6 1 29.3 4 29,698 -3,480 24.5 10.2 12
Colfax -7 -7 -2 3.3 27,588 -10,443 17.1 14.8 18.5
Curry 0.9 -6.9 10.6 2.7 31,696 90,695 18.5 10.3 15.3
De Baca -13.6 -11.9 4.5 3.4 24,630 -4,036 17.8 3.8 16.2
Doña Ana 13.6 5.9 21.4 3.9 30,576 89,405 23.9 11.3 22.3
Eddy -0.9 -3.4 15.5 2.8 39,973 16,753 16.1 11.8 13.5
Grant -4 -5.4 2 3.6 28,681 -8,961 17.7 9.2 20.5
Guadalupe -5 -6 2.8 5.3 23,834 -10,727 25.5 7.5 10.3
Harding -10.7 -7.4 30.3 2.8 27,789 -6,071 13.6 6.8 18.1
Hidalgo -14.2 -19.1 7.6 2.8 28,596 -2,914 24 8 9.9
Lea 5.2 -1.3 27.3 2.3 40,239 24,046 18.6 11.2 11.6
Lincoln 6.4 5.2 14.6 2.9 26,362 -13,830 14 9.4 22.8
Los Alamos 1.5 -1.9 7 2.1 65,327 0 3.1 4.8 60.5
Luna 8 3.9 25 9.5 27,069 1,057 32.5 17.7 10.4
McKinley -6.5 -14.7 9.6 4.4 29,928 -8,001 26.5 10.6 12
Mora -2.6 -2.8 16.6 7.4 27,047 -9,723 22.4 7.2 15.5
Otero 1.4 -2.6 5.7 3.6 31,848 672 20.4 11.9 15.4
Quay -11 -10.2 -2.4 4.2 27,192 35 23.5 10.3 13.7
Rio Arriba -1 -6.9 16.2 4.4 27,749 -9,352 21.2 16.6 15.4
Roosevelt 6.4 0.2 24.4 2.5 26,231 98,478 24.4 8.1 22.6
Sandoval 29.1 24.8 25.3 4 38,789 -7,175 10.3 12.4 24.8
San Juan 7.2 0.2 19.9 3.2 38,111 29,809 18.4 13.1 13.5
San Miguel -4.8 -7 10.5 3.9 27,123 -16,225 24.5 8.2 21.2
Santa Fe 10.1 6.6 14.8 2.8 36,680 -5,716 15 14.9 36.9
Sierra -7 -1 7.1 3.4 24,911 483 23.9 14.5 13.1
Socorro 0.3 -3.7 20.2 3 29,148 5,390 30.4 10.4 19.4
Taos 5.1 2.6 19.7 4.7 27,105 -2,715 17.6 14.1 25.9
Torrance -2.2 -4.5 14.5 4.2 27,929 4,902 22.7 14.3 14.4
Union -9 -8.3 6.5 2.3 24,942 18,630 16.8 4.3 13
Valencia 7.4 3.3 27.4 3.6 27,476 -2,361 15.7 16.7 14.8

The challenge for New Mexico rural policy makers, local officials, and residents is to provide the infrastructure and services that the increasingly educated rural population and workforce will need to establish new businesses, create jobs, and build communities. Adding to the task is the reality that the remoteness of most New Mexico counties from the state's urban centers and low population density pose real challenges for providing basic infrastructure and affordable services. Regional approaches need to be evaluated for providing infrastructure and services as well as promoting entrepreneurship (new business start-ups) and achieving business expansions and business attraction in New Mexico's rural areas.

Data Sources

Population and Migration

U.S. Department of Commerce, Bureau of the Census. USA Counties data files. http://www.census.gov/support/USACdataDownloads.html
U.S. Department of Commerce, Bureau of the Census. http://www.census.gov/population/www/socdemo/migrate.html
U.S. Department of Commerce, Bureau of the Census. Bureau of Economic Analysis Regional Economic Accounts. http://www.bea.gov/regional/reis/

Employment, Unemployment, and Earnings

The University of Georgia, Northeast Regional Project 1011, Shift–share Analysis of Regional Employment. http://www.georgiastats.uga.edu/sshare1.html
U.S. Department of Commerce, Bureau of the Census. Bureau of Economic Analysis Regional Economic Accounts. http://www.bea.gov/regional/reis/
U.S. Department of Labor, Bureau of Labor Statistics. http://www.bls.gov/lau/tables.htm

Farm Income Trends

U.S. Department of Commerce, Bureau of the Census. Bureau of Economic Analysis Regional Economic Accounts. http://www.bea.gov/regional/reis/

Poverty

U.S. Department of Commerce, Bureau of the Census. Small Area Income and Poverty Estimates. http://www.census.gov/did/www/saipe/
U.S. Department of Commerce, Bureau of the Census. USA Counties data files. http://www.census.gov/support/USACdataDownloads.html

Education

U.S. Department of Commerce, Bureau of the Census. USA Counties data files. http://www.census.gov/support/USACdataDownloads.html
U.S. Department of Agriculture, Economic Research Service, Measuring Rurality: 2004 County Typology Codes. http://www.ers.usda.gov/Briefing/Rurality/Typology/

Housing Stress

U.S. Department of Agriculture, Economic Research Service, Measuring Rurality: 2004 County Typology Codes.http://www.ers.usda.gov/Briefing/Rurality/Typology/


1This report focuses on New Mexico rural areas as a whole, rather than any specific county. If you are looking for detailed information about a particular county, please contact a community resource and economic development specialist in the Department of Agricultural Economics and Agricultural Business.

2Rural and nonmetropolitan counties treated here as synonymous, based on USDA-ERS rural–urban continuum codes 4 through 9. According to USDA-ERS, the 2003 rural–urban continuum codes classify metropolitan counties (codes 1 through 3) by size of the Metropolitan Statistical Area (MSA) and nonmetropolitan counties (codes 4 through 9) by degree of urbanization and proximity to metro areas.

3The professional and business services sector consists of these North American Industry Classification System (NAICS) sectors: Professional, Scientific, and Technical Services (NAICS 54); Management of Companies and Enterprises (NAICS 55); and Administrative and Support and Waste Management and Remediation Services (NAICS 56).

4For a detailed account of the SSA, please refer to NMSU Cooperative Extension Service publication Circular 643A (http://aces.nmsu.edu/pubs/_circulars/cr643A.pdf).

5These numbers were calculated without cost of living taken into consideration due to unavailability of a county level cost of living index.


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Printed and electronically distributed April 2010, Las Cruces, NM.