If Los Alamos is bringing economic development to New Mexico, why is the neighboring County of Rio Arriba performing so poorly?

Research Note

If Los Alamos is bringing economic development to New Mexico, why is the surrounding County of Rio Arriba performing so poorly? The 2,398 employees of LANL residing in Rio Arriba County pulled in $291 million in LANL salaries in fiscal year 2023. This does not including the substantial sums paid to subcontractors (Ibid., p. 4). Since there are only 9,462 employees total in Rio Arriba County, LANL employees comprise 31% of all employees in Rio Arriba County -- again not counting LANL subcontractors, of which there are hundreds.

Given the enormous economic influence of LANL on Rio Arriba's economy, the County's relative rankings within New Mexico in key social indicators can tell us, more than any other observable measure, how much "economic development" LANL really brings. That relative ranking within New Mexico in effect "cancels out" the effect of statewide variables and policies. The State Department of Health and Human Services as made those rankings, which are here.

What about Santa Fe County? Well, Santa Fe cannot be used for this analysis because Santa Fe County has many other large employers, some as large or larger than LANL's presence in the County (i.e. state and local government, tourism, and health care), as well as a considerable amount of private investment income and income transfers from other states. LANL's 3,975 employees in Santa Fe County comprise just 6.5% of the 61,095 jobs in the County in 2023. Given this, the "signal" of LANL in Santa Fe's overall economic and social development indices is relative faint. The same is true for Sandoval and Bernalillo counties, while Taos County has too few LANL employees -- only 306 -- to greatly affect its economic picture.

So what do we see in Rio Arriba County? Despite over $200 million in LANL jobs, plus more in subcontracting, we see that Rio Arriba ranks in the worse half of New Mexico counties in poverty overall, and has the 4th highest ranking in poverty of minors and elderly. It has the highest rate of accidental death of any New Mexico county, and the second-highest rate of alcohol-related deaths and drug overdose deaths. Rio Arriba's per capita income, food security, and child food security rankings are in the bottom half of New Mexico counties. Rio Arriba County does poorly, despite all its LANL jobs.

This neither proves nor disproves that proximity to LANL, with all its high-paying jobs, has caused this poor economic and social performance. What it does prove, in broad-brush but irrefutable fashion, is that LANL is not any kind of "economic development" engine. Rio Arriba's problems continue despite 80 years of LANL spending, to the tune of approximately $150 billion in today's dollars.

All this could be analyzed in much greater detail, of course, but that wouldn't change the overall reality that all that money from LANL pouring into the region over 80 years has been at best utterly ineffective in producing economic and social development, even within the relatively low standard of New Mexico's economic performance overall. There are many reasons LANL could be said to cause or contribute to this underdevelopment, but for the moment we must leave those for another day. (See also: Does Los Alamos National Lab Help or Hurt the New Mexico Economy? Working paper, Jul 2006.)

For reference see the New Mexico Health and Human Services 2022 Data Book, pages 416 and 417.