The inflation rate in the USA is even higher than in Germany. Here, too, it is primarily oil, gas and fuel prices that are driving inflation. While the whole country is groaning, the New Mexico state government has figured out a way to take advantage of inflation.
In the southwest of the USA, New Mexico is something like the ugly duckling among the swans. In the east, Texas, which is just bubbling with billions of oil, borders the almost square state, in the north, rich Colorado. Only Arizona in the west also has its problems, but next to it is dazzling California.
And in between: New Mexico. Here, 16.4 percent of the approximately 2.1 million residents live on food stamps because they cannot afford food. The median income here is just under $52,000 per year, ranking 45th among the 50 US states. Only in one state do fewer people have a broadband Internet connection – and nowhere else do so few young people successfully complete school.
That leads to the next problem: At 5.3 percent, the unemployment rate here is well above the US average of 3.6 percent. In general, only 69 percent of those who could work work – also a place far behind in the national comparison. Women in particular often stay at home because the costs of childcare are enormous: families have to spend 720 dollars or 18.3 percent of median income per month, per child. That’s three times the US average.
The latest statistics are no longer surprising: 17 percent of New Mexico residents live in poverty – the third-highest figure among the US states.
All the bad news is now leading to several innovations: First, the ruling Democrats under Governor Michelle Grisham and the opposition Republicans have worked together in recent months. And secondly, they have designed a program that is unique in its radical nature, not only in the USA.
First measure: All 29 public colleges and universities in the state have been free since February for all freshmen who do not already have a bachelor’s degree. While there have been exceptions before, freedom now applies to everyone: youngsters who have just graduated from high school, adults who want to retrain, immigrants regardless of their immigration status. The latter is important because New Mexico borders “old” Mexico to the south. Accordingly, almost half of the residents are first or later generation immigrants.
“We need to get students back into the classroom so they can earn certificates and degrees,” State Senator Gay Kernan told Bloomberg. The Republican voted for the program because it also finances manual training. Four years ago, the state was punished by a judge because the education system systematically disadvantaged poorer people. This is to change now.
But free universities are just one building block New Mexico wants to move forward with. Grisham starts much earlier. Kindergartens and childcare have also been free since May and at least until the end of June 2023. So, at an average cost of $720 per month, parents can save up to $10,000 per child. But that’s not what the state government is about, because many mothers stay at home anyway because they can’t afford the care.
With state help, they should now be able to apply for a job and be able to work again. “If we don’t get more people into work, we’re also missing out on the incredible talent in the women and men that we have in this state,” said Elizabeth Groginsky, chief of New Mexico’s Early Childhood Education and Care Department. Her department has only existed since 2019. At that time, Grisham gave her $300 million for her work, and the budget is expected to grow to $4.5 billion by 2026.
Because despite all the economic difficulties, New Mexico currently has more than enough money. In the southeast corner of the square, the Permian Basin juts into the state from Texas. This is where the USA’s enormous oil and gas reserves are located, which the country has been tapping into more and more in recent years. Oil production in the country has more than doubled since 2008. Natural gas production has increased by two thirds.
Coupled with the recent increase in oil and gas prices – fuel has risen by 32 percent since January – New Mexico’s tax revenues are therefore bubbling up. 42 percent of the budget is now financed by the energy industry. It was $5.3 billion last year, more than twice as much as in 2016. But politicians from both major parties are under no illusions that things will stay that way. “We have to be smart about investing the oil revenues and making changes that will last for generations,” said Derrick Lente, New Mexico House Representative.
How New Mexico wants to earn its money in the future is not yet clear. All that counts for both Democrat and Republican MPs is that this can only be achieved if their children are better educated. A start would be if the most talented among them corrected another statistic: New Mexico has one of the lowest percentages of public companies in the US.
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