Causes of low incomes are multiple

Education, language, racism and the border contribute

CHRIS ERICKSON

State of the Economy

Our city has seen rapid growth in the last few years and enjoyed low unemployment, yet the average employee in Las Cruces earns only 71 percent as much as the national average. Among 363 metropolitan areas tracked by Bureau of Census, Las Cruces per capita income ranks 349th. What accounts for this contradiction – a strong local economy and low incomes?

First is education. High school dropouts earn on average only earn 83 percent of what is earned by high school graduates and less than half as much as a college graduate. The high dropout rate contributes considerably to low incomes.

In Las Cruces, 26 percent of people over 25 are high school dropouts, compared to 16 percent nationally. If we could reduce the dropout rate to a level similar to the national rate, and if we could increase the number of college graduates, we would go a long way to reducing income short falls. Another factor that contributes to low local incomes is language.

Non-English speakers often find themselves trapped in low-income jobs. Locally, 57 percent speak a language other than English in the home compared to 20 percent nationally. For new immigrants, lack of skills in English make it harder to transfer skills learned in the home country to U.S. labor markets. Even native-born Americans who lack English skills face discrimination that can limit earnings.

Speaking of discrimination, another factor leading to low incomes in Las Cruces is the large Hispanic population. Hispanics earn about 15 percent as much as Anglos, after correcting for education.

Hispanic professionals (e.g., doctors, lawyers, dentists) actually fair worse than other Hispanics, earn only three-fourths as much as their Anglo colleagues.

Other immigrant groups have suffered discrimination, including the Irish, Eastern Europeans, and Italians. As these groups transformed and were transformed by U.S. culture, assimilation occurred and discrimination diminished. African Americans, however, even after 400 years, still face discrimination.

Whether Hispanics enjoy the assimilation experience of various waves of European immigrants or will suffer the discriminative history of African-Americans, only time will tell.

Finally, Las Cruces’ location near the border is another factor accounting for low wages. Of the nine metropolitan areas located on the border, seven are on among the 20 poorest. Exactly why border communities are low income is unclear.

Certainly, part of the reason is demographic – large Hispanic populations, low educational attainment and large populations of non-English speakers.

But border communities face additional problems. The border is disruptive.

It is hard to maintain social contact, and doing business is complicated by having to navigate the border. Of course, many

Las Crucens maintain close ties with family and friends in Mexico, but doing so is more difficult than maintaining relations with people who live, say, 50 miles north rather than 50 miles south.

Low incomes cannot be solved overnight. Some causes really can’t be addressed. There is no magic wand that will make the border disappear or eliminate the effects of discrimination. Other problems, like low educational attainment, can be addressed and the sooner we do the sooner we will see positive results.

Chris Erickson is an associate professor of economics and international business at NMSU. He wishes to thank the Arrowhead Center Entrepreneurship and Small Business Program for funding. Views expressed here are solely those of the author.