Despite New Mexico’s hot air balloon festival and dramatic landscapes, there’s not much else going for the state. They rank low on economic and social indicators, they have an arid climate, they’re navigating complex racial and tribal dynamics…needless to say, they could use a win.
That win may be coming in the form of a state-funded child care program. Funded through the state-level oil fund, an estimated $600 million per year will go into this groundbreaking program. If you’ve listened to me for any time at all, you’ll know the demographic crisis we’re facing. Programs like this are one of the few proven ways to effectively address this issue.
Sure, there are plenty of details to iron out, but let’s take the good news and say happy holidays.
Hey, everybody. Peter Zeihan here coming to you from Colorado. And today we’re going to talk about something that just went down in New Mexico, of all places. Now, for those of you who are not from the United States, New Mexico is a gorgeous state, but it comes in near the bottom of basically all the rankings that you, don’t want to come into the bottom at.
So, you know, crime, labor force participation, income levels, educational levels, infrastructure industry. It’s had a lot of problems. It’s a it’s a pretty arid area. There are very few places get reliable rainfall. You’ve got two major cities in Santa Fe, which is an old historical town that is now the administrative center in Albuquerque, which is the major population center.
But infrastructure is difficult because you get the Rio Grande Canyon that basically cuts right through the middle of the state, and you have a lot of desert and a lot of semi-arid. That’s before you consider, racial issues or the fact that this is one of the densest concentrations of Native Americans. And there’s an issue with reservations.
But anyway, there’s a lot that hasn’t worked out great for them. But the reason I wanted to talk about them is that they just came up with a new policy where everyone now qualifies for state covered child care. One of the problems the advanced world has is that raising a child is a real effort.
Back in the olden days, when we were all agriculturalists and lived on the farm, kids were free labor. So parents would have as many of them as they could because they helped on the farm. When you moved to town, that economic benefit goes away and you just have the expense without any of the monetary benefits. So over time, we’ve had fewer and fewer and fewer children.
One of the things Europeans tried when they tried to reverse this is it really matters what type of social program you put into place. So, for example, if you just say that if a woman is pregnant that she gets a extended maternity leave, what that means is that no one will hire a woman. And so women in their 20s are just simply unemployable.
The places that have pulled this off, getting their numbers back up, it all comes down to child care. Because if you force a woman to choose between being a mother or being a worker, she will then choose one of the two. And that means that some of them won’t have kids or some of them won’t work.
And you had got a problem with the workforce and with your demographics. But if the state can provide a degree of child care, then parents don’t need to make that choice. And the numbers go the other direction. Now, there are undoubtedly a thousand details that matter in the New Mexico situation. So this is not in me endorsing what they’re doing except in principle.
It matters how you pay for it matters how you regulate it. The New Mexicans are planning on using income from the oil fund. They basically have a sovereign fund at the state level. And they expect that it’s going to cost them about $600 million a year. We will see if that is feasible. Will you? We’ll see if that is realistic.
But for the first time in the United States, we actually have somebody at the state level that is thinking about what the future of the demographic profile looks like and what the future of the workforce looks like and is actually putting a fair amount of money behind what might actually work. I call that good news.
