- In April 2020, the Farmington area unemployment rate peaked at 13.3%.
- The unemployment rate today is less than half what it was back then.
- But it is the highest of the state’s four MSAs and remains well above the national rate.
FARMINGTON – The unemployment rate in the Farmington statistical area has declined significantly in recent months, falling to 6.3% in November from 9.3% in July.
But it stubbornly remains the highest of the state’s four MSAs, well above those of the Albuquerque, Santa Fe and Las Cruces areas and the national rate.
With this in mind, a casual observer might conclude that jobs are scarce in San Juan County. But a perusal of help-seeking locations, or even a short drive through Farmington’s business districts, exposes the fallacy of this notion, as many companies appear to be asking for workers and receiving few responses.
How can this apparent contradiction be explained?
Lorenzo Reyes, associate vice president of human, economic and resource development at San Juan College, noted that as of November there were 2,200 open positions in the Farmington MSA, while about 3,000 people were receiving unemployment benefits or were in work in the market pool.
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Under normal circumstances, he said, such figures would result in a rapid drop in the unemployment rate as jobseekers would be matched with those vacancies. However, these are not normal circumstances, he said, describing how the job market has changed rapidly across America and in San Juan County in the wake of the COVID-19 pandemic.
“This scenario is a little bit different now than it has ever been,” he said. “We will continue to see the unemployment rate fall, but we face many challenges that both employers and employees face.”
Reyes said the Farmington area’s unemployment rate of 6.3% in November, the latest period for which figures were available, represents a significant improvement over the unemployment rate it recorded immediately after the pandemic began. In April 2020, the unemployment rate peaked at 13.3%, making the unemployment rate less than half what it was then.
But Reyes said the county could and should do better.
“That’s not where we want to go as an economy — 3% to 4% is the number we’re going for,” he said.
A misalignment in the labor market
Getting there won’t be easy, Reyes said. He said San Juan County suffers from a misalignment between the jobs that are available and the jobs that local workers are qualified for.
“It means you have the jobs (available) but employers don’t have the applicants (they need them) because people don’t have the skills needed for those positions,” he said.
Reyes said that of the job openings listed in the Farmington MSA in November, only 13% required an educational level of a high school diploma or less. Almost 87% of them required a year or more of college.
These jobs were primarily in the healthcare, information technology, education, retail, administrative services, hospitality, and transportation sectors.
“There are job openings in all of these industries,” he said. “And some of them require very specific skills or certifications.”
In San Juan County, other factors are also at play, he said. On Jan. 1, the New Mexico minimum wage rose to $11.50 an hour, increasing labor costs for business owners. And Reyes said that although San Juan County is a long way from the east or west coasts where the phenomenon has received so much attention, the impact of the so-called “Great Resignation” has been felt here.
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“I’m not really concerned about the impact on workers,” Reyes said of the minimum wage hike. “But it will continue to be difficult for employers to find qualified applicants. The bigger concern is retention (of employees). I think a lot of employers are losing skilled workers and are struggling to keep their workforce.”
Reyes pointed to US Labor Department statistics for November showing a record number of workers had voluntarily left their jobs. He said most of them do so because they believe they will have little or no trouble finding another.
Jamie Church, the president and CEO of the Farmington Chamber of Commerce, said she believes the continued presence of the virus is having a major impact on the apparent unwillingness of so many people to delay their return to work. She worries that another potential spike in county COVID-19 cases due to the Omicron variant will make matters worse. But she said she had begun to get the impression in recent weeks that the region’s job shortages were easing.
“I haven’t heard as many members of the Farmington chamber say they couldn’t find help, so maybe they adjusted,” she said.
Church said a bigger problem for many employers is the inability of so many workers to do their jobs as the virus continues to rage through the community. She said this isn’t a big problem for large companies, but for mom and pop operators who only have a handful of employees it can mean two or three employees who are sick for a week have to close temporarily.
“It’s tough when everyone has COVID,” she said.
Getting the upper hand
Reyes said another element contributing to San Juan County’s shortage of skilled workers is the overall shrinking workforce. Before the pandemic, the workforce was consistently more than 50,000 people. Now, he said, that number is closer to 49,000 because so many families have moved.
“That’s a significant (reduction) in a population like ours,” he said.
Reyes recommended that companies act proactively to retain their workforce rather than focus on finding replacements. He said companies that offer flexible work hours, opportunities for additional training that can lead to advancement, free degree programs, better medical benefits and, of course, higher salaries are those that are likely to be more successful in preventing attrition.
“That will require a small departure from the traditional employer model,” he said.
San Juan College plays a big role in addressing the county’s shortage of skilled workers, he said. The institution offers a variety of study and certification programs tailored to the needs of the local job market, and Reyes said he enjoys advising companies on what they need to do to attract and retain a skilled workforce.
However, he acknowledged that employers, long accustomed to having the upper hand over workers, are not always greeted with enthusiasm.
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“Some of the employers are very receptive,” he said. “In fact, I’m in the process of putting together proposals for a few companies to build workforces. Others say, ‘Let’s wait, I think I can keep my current staff.’ But that doesn’t happen.”
Despite her concerns, Church said she is choosing to take a positive approach to the next few months, explaining that she believes many local business owners have taken a hard-hitting approach to dealing with all of these issues and are doing what they always do do when faced with such challenges – make adjustments.
“I’m more optimistic as we head into 2022,” she said. “We are learning to live with the virus and work with it. This is no longer new to us.”
Mike Easterling can be reached at 505-564-4610 or [email protected]. Support local journalism with a digital subscription.
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