KRWG

Look To Vibrant Urban Areas For Ways To Ignite New Mexico's Economy

Apr 6, 2018

Commentary: One of the best indicators of the vitality of an economy is population growth. The idea is simple. People move to places where there is opportunity and from places lacking opportunity. By this stand, U.S. urban areas are doing very well.

Between 2010 and 2017, the Census Bureau estimates growth has been 7.1% for cities with populations greater than 1 million. Meanwhile smaller cities, so called micropolitan areas grew only .3 of 1% during the same period.

Rural areas have done much worse. Population has declined by 1.6%, reflecting a long-term trend of increasing urbanization.

If population growth indicates vitality, then New Mexico is on life support. Growth in Albuquerque has only been 2.4%. This is less than half the national average, and only about a third of the large city growth rate. Las Cruces was not much better at 2.6%. Santa Fe was 2.9%. Farmington did worse of all, actually losing population, growing at a negative rate of 2.5%.

It doesn’t have to be this way. Cities in our neighboring states are doing well. Houston, Denver, Phoenix, Salt Lake, and Oklahoma City all grew at double digit rates. El Paso grew at 4.5%.

What New Mexico needs to do is figure out how to attract the creative classes as it is the creative classes—the programmers, web designers, product developers, and yes also, the artists, performers, authors—that are driving urban growth. These workers tend to be affluent job creators. We are not doing well here.

The creative classes seek out each other as proximity allows for cross fertilization of ideas. This means congregating in places where other creative types live and that tends be where there are fun things to do. And cities are where the fun is. The large populations mean that there is the critical mass to support all sorts of activities, certainly on the weekends, but during the week also. Variety and availability makes for an attractive life style.

This strategy is sometimes referred to as “bright lights” model. The idea is that the bright lights of the big city attracts the young affluent creative types, and the creative types then drive the dynamics of the urban economy.

Its not just about entertainment. Big cities also have infrastructure. Public schools, research universities, roads, mass transit, high speed internet, good air connections—all are important. Cities can spread these services high fixed cost of over a large population, making higher quality more affordable.

All these factors are self-re-enforcing. Affluent creative classes, “bright lights”, and infrastructure—one begets the other creating a virtuous cycle. Just the opposite is at work in New Mexico. Few affluent workers, limited entertainment and lack of infrastructure makes growing hard. We face a difficult situation where our creative youth have to leave the state to find the economic environment that allows them to follow exploit their creativity. The virtuous cycle of other cities become a vicious cycle for us.

Christopher A. Erickson, Ph.D., is professor of economics at NMSU. He teaches in the NMSU Doctor of Economic Development program. The opinions expressed may not be shared by the regents and administration of NMSU. Chris can be reached at chrerick@nmsu.edu.