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Central New Mexico Community College

Are We the Reason for New Mexico’s Economic Woes? Forbes Says So

30 Comments

Hey CNM!

Did you know that you live in an economic “Death Spiral State?” That’s what Forbes magazine says about New Mexico. Our state’s economy is burning to ashes, ready to collapse into what Forbes calls a “Fiscal Hellhole.” Know why? Too many takers… Not enough makers, the magazine says.

Do you know what Forbes considers you, as an employee of a state-funded college? What they consider us? “Takers.” In other words, we’re the ones digging the fiscal hellhole.

From Forbes: “Two factors determine whether a state makes this elite list of fiscal hellholes (which includes NM and 10 other states). The first is whether it has more takers than makers. A taker is someone who draws money from the government, as an employee, pensioner or welfare recipient. A maker is someone gainfully employed in the private sector.”

Interesting how they define a public employee as somebody who “draws money from the government,” and someone in the private sector as “gainfully employed.” But we’ve heard this kind of divisive thinking a lot in recent years, if we’ve been listening.

There’s no question – New Mexico and the Albuquerque-metro area are highly dependent on agencies and institutions that are funded by federal or state dollars, like Sandia National Labs, Los Alamos National Labs, CNM, UNM, Kirtland Air Force Base, etc.

But we also know that a lot of private-sector jobs are spawned from places like Sandia and Los Alamos, and that institutions like CNM and UNM prepare students to become the leaders and the backbone of the private-sector economy. Don’t we educate and help empower the so-called “makers?”

Here’s a link to the Forbes story. If you have trouble accessing it in Internet Explorer, try it in a different browser like Firefox or Safari.

So what’s your take on being labeled a “taker?” Are you offended? Or do they have a point – is New Mexico doomed to be a fiscal hellhole because we have too many “takers” and not enough “makers?”  Should we be listening to these kinds of assertions? Or just dismissing them as nonsense?

I really want to hear what you have to think. Please leave a comment.

30 thoughts on “Are We the Reason for New Mexico’s Economic Woes? Forbes Says So

  1. The real “takers” are those that are unfortunately unemployed. State employees fill a useful function by providing roads, teachers and so forth. On the other hand, unemployed and welfare individuals generate no tax revenues and drain resources. It would make sense to pursue getting them back in the work force, rather than bashing necessary infrastructure required to run the state.

    • Thanks for your response. I so agree that get that providing folks the opportunity to get back in the workforce is the key. I think that is why CNM is so important to turning around the economy in Albuquerque, Central New Mexico and throughout the state.

    • Apply a little fact-checking before you make such claims that don’t prove to be facts in the least bit. This is a top down society; not a bottom up one.

  2. I understand the thinking at Forbes, we can just divide the world into good and evil. Then if we add to the good and reduce the evil the world will be a better place. Not so clear is where people get the skills, knowledge, and attitudes to become makers. For more than twenty years I’ve been turning unskilled students into graduates that get middle-class jobs and pay taxes. So according to Forbes my efforts have been wasted and it would be better if all these graduates remained unemployed? I suspect the editors at Forbes would be better critical thinkers if they came to CNM and obtained an education.

    • Bravo Scott. They oversimplified a very complex issue. CNM does a fine job of helping individuals get jobs and make them a productive part of society, therefore, changing “takers” into “makers”.

    • I’ll write them and offer a catalog of our classes! As I said before, the upside of the argument Forbes has developed for their article is that is makes CNM’s role so important to the future of our community – something CNM has been doing well for almost 50 years.

  3. The entire premise of the article is flawed. It is another attempt to further the proclamation that government spending is inherently bad and that the real good guys are private industry. From Sandia Labs(a government run extension of a privately run corporation, Lockead Martin) to Los Alamos National Labratory to White Sands to Walker AFB to Kirtland AFB and more, our state’s contributions to national defense can be surpassed by none. None of the private industry “good guys” could succeed without government. How would they fare without patent rights, copyright protections, protected transport of goods, etc? The argument is so often framed as Private Industry vs. Government or Capitalism vs. Communism when, in reality ,neither model can be exclusively successful. Our country’s success is dependent on the co-existence of Communist ideals and Capitalist ideals, in other words Socialism. The writers, editors, etc involved in publishing this story know this but do everything they can to keep our country on the Capitalist side of the continuum by framing the argument as Socialism vs Capitalism.

    Oh and there is this… Forbes thinks New Mexico is an awful place to be be but the people who live here don’t. Check out the CNN Twitter research about the happiest states.

    http://www.cnn.com/2013/02/19/tech/social-media/twitter-happiness/index.html?hpt=hp_c1

  4. This is a similar type of argument I had to deal with in the trucking industry. Administration of the truck company would look to see what could be cut when expenses outweighed the income. One of the first places that was looked at was the Safety Department because they did not “generate revenue”. What they failed to realize with that thinking was that the department they were cutting was the “profit protection” department. Forbes is looking at this the same way…public employees, such as those in education, are not “generating revenue” directly, thus, under the Forbes definition, become takers from the economy. The way it probably should be looked at is that we are “FUTURE revenue generation producers” given we help others gain the skills to get gainful employment.

    It may be good if somehow we were able to communicate this to people who are in the corporate sector so that they understand the differences and the complexities of what they are saying. Thus it could be understood that not all “revenue generation” comes from profit centers…many times it also comes from the “profit protectors” and “FUTURE revenue generation producers”.

    Another aspect is that public employees provide services that are essential to profit sector organizations. Without the services provided to the private (makers) sector, the private sector would not be able to produce the revenue and the profits they need. Thus, public employees should not be lumped in with takers.

    A true taker is one who gets into the system to receive “benefits” and then refuses to leave that system. Yes there are some in that system who may now be considered takers but they are working their way out of it. Therefore, the delineation that Forbes made is too tough…real life works in many facets that are intereactive adn if they eliminated all who are considered takers, the makers wouldf be in trouble too. Therefore, New Mexico is not a “Death Spiral State” since actually, we are preventing the death spiral from continuing by enabling people and those that Forbes called “makers” to be able to function.

    • I often find myself thinking about the statement “there is so much more that unites us than divides us” and I also often wonder why it is easier to polarize than to support each other. New Mexico’s private sector has been hurt during this economic downturn, and as you so clearly articulated, we in the public sector have so many ways to help. I am hopeful we can come together to help this State we love turn its entire economy around.

    • Real brain power on dipaysl. Thanks for that answer!

  5. The notion that public employment contributes less to the economy than private employment is unsubstantiated and absurd. (Besides, “private” employment … really? In our interlocking economy?) But the Death Spiral article is primarily wrong because it misidentifies the real downward spiral.

    To begin with, Forbes does not class as “takers” the owners and managers of U.S. companies making huge profits off American transactions, then off-shoring those profits to avoid paying taxes to support the infrastructure on which they depend. No, Forbes classes these people as “makers.”

    This false dichotomy of makers and takers would be funny if it didn’t mislabel such a large cluster of serious problems.

    In fact, the so-called takers are essentially a creation of the so-called makers. An economic elite has highjacked our economy, manipulating government policy and financial regulations to hollow out the middle class and balloon profit margins. We tend to forget that only a few decades ago a profit margin of 3 to 7 percent was considered good. Anything over 7 percent was remarkable. In this era of quick-rip capitalism, where the health of a company is measured in quarters, rather than decades, let alone family dynasties, any margin under 10 percent will outrage the day-trading shareholders and draw in the vultures to load the company with debt, loot it of assets and raffle it off as bankrupt.

    As for the “takers” … The productivity of American workers grew by 80.4 percent from 1973 to 2011. During that same period, average hourly compensation–which includes the pay of CEOs and day laborers alike–grew just 39.2 percent. But even that understates the degree to which American workers have been undercompensated for the productivity gains: Median hourly compensation grew by just 10.7 percent. (And again, CEOs and day laborers are equally calculated into that median.) Consistent, if generally moderate inflation has eroded these wage increases into dramatic reductions in purchasing power and living standards for the disappearing middle class.

    The weirdest thing though about these “takers” is, most Americans of working age who are able-bodied actually do work for a living … those who can find a job, that is. But our economy is so warped that working for a living doesn’t actually pay well enough to provide a decent living. Consequently many workers require some level of public assistance, making them, I don’t know, both makers and takers?

    If the editors at Forbes were truly concerned about a healthy economy, they would view the worker-wages death spiral as a much more salient issue than whether or not New Mexico relies on public sector jobs.

    • Just one piece of data for us all to think about – New Mexico ranks highest among the states in the number of individuals 16-25 who are not in school OR working. That statistic, along with the statistic you elude to (New Mexico having one of the lowest per capita incomes in the United States) make for some interesting thinking. But again, CNM’s role becomes more and more significant to this conversation.

  6. I can’t put much stock into this article as Forbes Magazine named Albuquerque one of the Top 25 places to retire in 2012.

  7. What part of the Forbes article do you disagree with? Forbes established a key inidcator by which to provide a measure for “takers” and “makers” states. This key indicator gives potential investors a sense of the economic status of the states by comparing the value with other states. This key indicator is not probably not the only tool by potential investors will use in their comparative analysis. They might also consider the actual number of private jobs created and how receptive a particular state is to potential investors interms of incentives and tax breaks, etc.

  8. I think the catchphrase the Forbes Magazine article employs is something we should heed if we’re thinking of New Mexico’s economic future. We can argue the merits of public versus private sector jobs and still admit that our state is overly dependent on Federal spending. What I took away from the Forbes piece was that states would be wise to balance their public investment, subject to the shifting winds of political fortune, with their economic investment, subject to the rise and fall of supply and demand.

    To wean New Mexico from an over-reliance on Federal subsidies we need to ask ourselves what can a New Mexican labor force produce that emerging markets are willing to buy? For example, there is a market for oil, gas, healthcare, film, and hot peppers, and New Mexican workers are available to fill the demand for jobs in these areas. What other prospects make sense for our labor pool? Aviation and space exploration have yet to get off the ground, but that doesn’t mean that there aren’t other ventures worth exploring. And given the markets I’ve mentioned that we can satisfy, why not redouble our efforts at investing in those areas?

  9. Good thoughts – thanks for weighing in.

  10. There is an old saying that only so many people can hop on the wagon before there is no one left to pull the wagon. I agree with this statement. The majority of New Mexican children are born into some sort of government assistance, 71% is what I read, and 1 in 4 New Mexicans are enrolled in the Medicaid program – not to mention welfare, food stamps, etc.

    That being said, I think the only way out of this problem is to educate the people of New Mexico. Otherwise there is no way out of the poverty for these families. We must invest in education in order to change the tide. Teaching these children how to learn and giving them the skills to be successful is our only option.

    Forbes should not look at educators as a drain, but as an asset.

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  20. The CNM chronicle did a story on this back at the begining og the spring term so I was wondering if anybody reads the college paper because this news broke before march and should have been disscussed sooner

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