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Inequality Presents Major Inhibitor To Economic Development For Las Cruces

Simon Thompson

Income inequality has been on the rise nationally and in New Mexico for the last 40 years. Economists say it’s a drag on growth and opportunity that the federal government needs to address. But as Simon Thompson reports….cities like Las Cruces are already looking for ways to address the issue.

New Mexuci State University economics professor Jim Peach says the growing income inequality and
a vanishing middle class has had a dramatic affect on the economy both nationally and in New Mexico. 

“What does the middle class do? The middle class buy houses they buy automobiles, they spend money in restaurants, the middle class is essential to having a vibrant local economy” he says. 

In fact, in 2012, the Bureau of Labor Statistics reported that consumer spending accounted for almost 71 percent of gross domestic product. 

Peach says increasing demand, investment and growth needs to be met with a national solution- he says increased federal contracts and spending on public work and a federal minimum wage increase would help.

But he says local communities can also make an impact.  Peach says Las Cruces can take notes from Austin, Texas.

"I don't think there is going to be people coming here from all around the country saying, hey I want you to stand on my neck."

Las Cruces resident Leslie Belt started living in Austin in 1990, just as the city’s oil and livestock based economy completely bottomed out and was in a phase of economic reinvention.

“I certainly experienced in Austin watching a community really prosper and pick it self back up by celebrating ingenuity and rewarding ingenuity." she says. 

Belt says this culture and professional mentality allowed her, even as a fresh transplant from Los Angeles with no college degree to establish a career as a copy writer.  She earned as much as $100 an hour on campaigns for high profile clients like HP, NASA  Exxon and 3M.

https://www.youtube.com/watch?v=qhaJuLRwJr0&feature=youtu.be

Life took an unexpected turn and Belt had to let her clients go to care for her partner.

“She got breast cancer nearly died but survived and apparently this is not uncommon when there is a life  altering illness like that for the survivor  to go like ok I don’t want to do this, I am changing my whole life.” she says

Now single and unemployed  Belt ended up in Las Cruces. Noticing the university, economic developments like Santa Teresa and the Spaceport.  

She thought it would be a good place to restart her copy writing career.

“You look out at the beautiful community and also the beautiful setting  and it doesn’t seem like it could be a dead end. Sometimes it really feels like a dead end” she says. 

But all she could find was minimum wage work in a call center. 

“Here in the city, it seems like there is a certain amount of  effort being put  in to holding wages and holding down productivity and it is hard to understand when you are coming here from the outside” she says. 

City councilor Greg Smith says the positive impact of a minimum wage increase proposal has been overstated, he says if it’s too high it could affect business and opportunity.   NMSU professor Peach says the proposed minimum wage increase would likely be re-couped by business through minimum wage earners’ increased spending.

Smith says the minimum wage isn’t the big issue.  He says Las Cruces should work on urban redevelopment and art projects to attract innovators and entrepreneurs while encouraging students to stay here.

“If we continue on working to make this the environment where that kind of thing can happen, then some very interesting exciting things can grow out of that. What kind of home do these people want to live in? What kind of dining experience do these people want to have?  What kind of evening entertainment do they want to have?” he says

Belt agrees that entertainment and other quality of life issues are important, she appreciated those things in Austin.  But Belt says a minimum wage increase is bigger than dollars and cents she says opposition to a minimum wage hike typifies a larger cynicism and classism that’s quashing opportunity in Las Cruces.

“I don’t think there is going to be people coming here from all around the country saying, hey I want you to stand on my neck. It is so sad because it is such a great place.” she says 

Belt says Las Cruces feels like home, she wants to stay but is not sure how much longer she will be able to without a chance to earn a livable wage and flourish professionally.