Commentary: People sometimes refer to New Mexico as the “thank God for Mississippi state.” Mississippi usually ranks at the bottom on most lists, with New Mexico close behind. Now, New Mexico isn’t even second to last anymore—we’re dead last, when it comes to overall prosperity, according to a new study by the Family Prosperity Initiative.
Unfortunately, these results should not surprise those who follow local politics. The state has been run into the ground by big government politicians who oppose any attempts at real economic reform and progress.
What makes the Family Prosperity Initiative study so unique is that it takes into account factors other than the traditional measures of prosperity like Gross Domestic Product. Factors like illicit drug use, sexual transmitted diseases, and personal health are included alongside the more traditional measurements of economic development. This provides a much more holistic and accurate reading of state prosperity than any other study like it.
There are multiple ways to increase New Mexico’s ranking on the list, including a reversal of Medicaid expansion in the state—and, preferably, repealing the entire Affordable Care Act.
Supporters worry that ending Medicaid expansion will harm those mired in poverty by making it difficult for them to access healthcare. The facts, however, do not back up this claim. The famous Oregon study concluded Medicaid expansion “generated no significant improvement in measured physical health outcomes.” The reasons Medicaid coverage failed to increase physical health included the fact doctors often refuse to see Medicaid patients due to low reimbursement rates and the longer wait times Medicaid patients experience before receiving care.
Ending Medicaid expansion may actually serve to help poor New Mexicans because it would reduce the complexity of the system, meaning poor people would receive better care, and reduce strain on the public budget.
Policymakers should also look at reducing the size of the public sector. According to the report, “the bigger the private sector, the greater per household personal income.” This is because large public sectors crowd out the private sector and reduce efficiency.
New Mexico could increase the size of its private sector by passing a right to work law. RTW influences where businesses choose to locate themselves. Economic consulting firms have reported that 35-40% of automotive companies insist on doing business in RTW states and another 20-25% take it into consideration before opening up a plant. It is therefore not surprising that 79% of the jobs created in the first 6 months of 2015 were slated for RTW states.
Critics of RTW say the name is a misnomer; instead, they say, RTW simply means “right to work for less.” But this could not be further from the truth. When the cost of living is accounted for, workers in RTW states make more than their counterparts in non-RTW states. RTW legislation would attract high paying manufacturing jobs to the state—just what we need to jumpstart our lagging economy.
A way to shrink the public sector would be to topple the government’s education monopoly. New Mexico’s schools are failing, in part because a growing bureaucracy rewards mediocrity and does little to promote achievement and success. This should not be read as a criticism of teachers; in fact, it is quite the opposite. The problem is the institution and the incentives it creates, not the people within the institution itself. The way to fix our school system is to introduce market forces that stress competition, which leads to higher quality and more efficient schooling. We need “rampant” school choice.
Sweden, which Bernie Sanders considers to be a model of success, has a nationwide school voucher program. According to academic research, the results have been positive.
When sifting through the data in the Family Prosperity Initiative report, clear patterns begin to emerge: the more prosperous states have small public sectors, thriving private sectors, and less dependence. Conversely, the least prosperous states have bloated public sectors, feeble private sectors, and more dependence. The lesson from this is if New Mexico wishes to be lifted out of the doldrums, serious reform must be undertaken.
Alexander Adams is a Policy Analyst at New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.