Report: NM is the only state losing economic freedom since 1981
The Rio Grande Foundation’s mission can be boiled down to one core principle: the advancement of economic freedom. In its most straightforward definition, economic freedom refers to the ability of individuals and businesses to make voluntary financial decisions and engage in free-market exchanges without undue government interference. Such interference can come in many forms—taxes, subsidies, wage mandates, excessive regulations, and other barriers that restrict free enterprise and personal choice.
The concept isn’t new. For decades, the Canada-based Fraser Institute has been a global leader in measuring and analyzing economic freedom through its flagship reports, Economic Freedom of the World and Economic Freedom of North America. These reports consistently show that countries, states, and provinces that rank higher in economic freedom outperform their peers in numerous ways. As the Rio Grande Foundation points out, jurisdictions that protect economic freedom tend to experience stronger economic and population growth, lower poverty rates, better environmental outcomes, and even improved gender equality.
A recent collaborative report by the Rio Grande Foundation and the Fraser Institute shines a concerning light on New Mexico. The study, which is the first of its kind, specifically focusing on the Land of Enchantment, reveals that New Mexico stands alone in an alarming trend. “New Mexico, unique among US states, has seen a decline in overall economic freedom since 1981,” the report states.
This gradual erosion of economic freedom has not been without consequence. According to the findings, New Mexico’s relative stagnation in both economic and population growth can be directly linked to its declining economic freedom. In comparison to neighboring states such as Texas, Arizona, and Colorado—which have generally moved in the opposite direction by reducing regulations, cutting taxes, and creating more business-friendly climates—New Mexico has lagged behind.
Data from the U.S. Census Bureau and other economic indicators underscore this reality. While states that prioritize economic freedom tend to attract more residents and businesses, New Mexico has struggled to keep pace, both in terms of population influx and job creation. Between 2010 and 2020, for example, Texas grew by nearly four million people, while Arizona added over 700,000. Meanwhile, New Mexico saw only modest population growth, adding just over 58,000 residents during the same period.
The Rio Grande Foundation argues that this is no coincidence. They believe policies such as persistent tax hikes, heavy-handed regulations, and restrictive labor laws have created an environment that is less attractive to both entrepreneurs and workers. “Economic freedom is at the heart of prosperity,” they contend, and New Mexico’s continued decline in this area could spell further economic stagnation unless policymakers change course.
In summary, the Rio Grande Foundation’s report serves as a warning—and a call to action—for New Mexico’s leaders to embrace reforms that prioritize economic freedom. By doing so, they argue, the state could unlock its full economic potential and reverse decades of slow growth.
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