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Low unemployment in Santa Fe — but also low wages

July 24, 2018

Scientist, teacher, waiter or waitress.

From entry-level customer service to high-paying tech jobs, there’s something for everyone right now in Santa Fe. But while employers are offering higher wages in some cases, those increases — especially in the lower-page service sector — are not keeping pace with other costs, including housing.

The jobless rate in the city rose 0.8 percent to 4.2 percent in June, according to preliminary data released Friday by the New Mexico Department of Workforce Solutions. That’s up slightly from the rate in May of 3.8 percent. But even with that, the Santa Fe rate is lower than the statewide rate of 4.9 percent, according to the department.

“The low unemployment rate in Santa Fe is because the labor force grows very slowly,” wrote Jeffrey Mitchell, director of the Bureau of Business & Economic Research at The University of New Mexico, in an email last week. “Since 2000, [the] labor force in Santa Fe has grown by just 3.7 percent, compared to 15.6 percent in Albuquerque and 23.6 percent in Las Cruces, and much faster rates in neighboring states.”

Thanks to its slow-growing work force, the city over time has consistently the lowest jobless rates of any major metro in New Mexico, Mitchell added. In 1999, just 2.8 percent of the labor force was without work and 3 percent in 2007, just before the Great Recession.

For Tony Bennett, proprietor of Kakáwa Chocolate House on Paseo de Peralta, low unemployment and a tight labor market represents a challenge to restaurateurs.

“It forces you to raise wages, definitely,” he said Thursday. “The pool that you have to select from is much smaller. You have to do a lot more background checking and that sort of thing.”

Bennett, a board member for the Greater Santa Fe Restaurant Association, said the hardest jobs to fill are those that deal directly with the customers. Skilled culinary specialists tend to stay longer with one employer, he said.

One obstacle to hiring wait staff, he added, is the lack of affordable housing.

“The housing situation in Santa Fe is so expensive that I don’t think these people have an opportunity to obtain housing,” he said.

The problem affects other sectors as well: housing remains a factor, for example, when it comes to recruiting teachers and other staff to work in Santa Fe Public Schools, Jeff Gephart, assistant superintendent of engagement and innovation, wrote in an email Friday.

The median sale price of a home in Santa Fe, at $343,200, according to Zillow, is nearly twice that of Albuquerque, $191,400, Gephart wrote.

The school district has 76 vacancies to fill, 47 them of them teachers, he wrote. The turnover rate for school teachers in the district has ranged from 21 percent in the 2014-15 school year to 24 percent in 2016-17. In the 2017-18 school year, 21 percent of its teachers left the district, he wrote. The district employs 1,841 people, some of them part time.

To make itself a more attractive prospect, the district approved an average 4.85 percent pay raise for teachers this year, nearly twice the mandate from the New Mexico Legislature, Gephart wrote. The 2017-18 teachers salary schedule indicates a range from $34,000 for starting teachers to $54,922 for the most experienced.

Wages may be higher in Santa Fe thanks to higher demand for labor, but that doesn’t mean pay has kept pace with economic growth, Mitchell wrote. The comparatively slow growth of the labor force is one reason, he said. The large service sector is another. After government employment, leisure and hospitality is the next largest employment sector in the city at nearly 12,000 workers in June, according to the federal Bureau of Labor Statistics.

“Wages are generally low because jobs in Santa Fe are disproportionately in lower paying industries while the cost of living, particularly housing, is extremely high compared to other areas in New Mexico,” Mitchell wrote.

In the tech realm, however, housing costs are less a factor than the housing supply. At Descartes Labs, a company that commercialized satellite imaging, some of its recruits are coming from areas where housing costs are three or more times that of Santa Fe. Now with about 70 employees in three locations, the company expects to hire another 15 to 20 by year’s end.

The company pays competitive salaries for highly trained, skill-specific men and women, said Julie Crabill, the chief marketing officer, and Jett Metcalf, technical recruiter.

“Certain kinds of of candidates are always going to be hard to find, no matter what market you’re in, no matter where you’re trying to draw from,” Crabill said. “We have a lot of really specific needs at points where it comes to engineering and scientific backgrounds.”

Some of those hires are locals, some are “boomerang New Mexicans,” folks who grew up here, went to school here or just lived here for a time and wind up coming back, Metcalf said. The third category, newcomers, are drawn by the work itself and opportunity to stretch themselves career-wise, but also by the low cost of housing compared to tech hubs such as Seattle and San Francisco, Crabill said.

“I think there’s a lot of people that are in tech hubs that are tired of the rat race; they’re tired of the ridiculous housing prices,” Crabill said. “They want a place where they can stretch out and raise their families.”

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