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New Mexico Has the Worst Ranking in the 2018 Family Prosperity Index

Posted by Dr. Wendy P. Warcholik - 2018-05-31 14:16:07

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The Family Prosperity Index (FPI) provides federal, state, and local policymakers—as well as religious and civic leaders and community-minded citizens—the roadmap needed to develop economic and social policies that improve the well-being and prosperity of American families and their communities. No other measure provides more credible and comprehensive insights into how the economy affects families, and how families affect the economy.

 

Unlike Gross Domestic Product (GDP), the unemployment rate, and other standard measures of economic performance, the FPI recognizes the vital, central role that families play as the engine of the American economy. Only by recognizing the central role of the family can any measure of the economy provide a complete, accurate, and useful picture of American prosperity and cultural well-being.

 

In the 2018 Family Prosperity Index (pdf), New Mexico has the worst index score of 3.35. More troubling is that the gulf between the top ranked state and the bottom ranked state is growing. In the 2012 FPI, the top ranked state’s score was 75 percent higher than the bottom ranked state (7.01 vs. 4.01, respectively), but in the 2018 FPI the top ranked state’s score was 120 percent higher (7.37 vs. 3.35, respectively). Interestingly, Utah was the top state and New Mexico was the bottom state in both the 2012 and 2018 FPI.

 

#NewMexico Has the Worst Ranking in the 2018 #FamilyProsperity Index http://www.familyprosperity.org @FamProsperity #NMpol #NMleg #NMgov #NMecon (Click to Tweet)

 

More specifically, among the six major indexes that make up the FPI, New Mexico ranks last in three of them: Family Self-Sufficiency, Family Structure, and Family Culture. New Mexico also does poorly on the remaining three major indexes: Economics, Demographics, and Family Health.

 

 

Over time, between the 2012 and 2018 FPI, New Mexico’s score has significantly decreased by 16.6 percent from a score of 4.01 in 2012 to 3.35 in 2018 (the steepest decrease of any state). This decrease was driven by all the six major indexes:

 

  • Economics decreased by 18 percent from 3.70 in 2012 to 3.03 in 2018.

 

  • Demographics decreased by 21 percent from 5.78 in 2012 to 4.57 in 2018.

 

  • Family Self-Sufficiency decreased by 22 percent from 4.09 in 2012 to 3.18 in 2018.

 

  • Family Structure decreased by 0.1 percent from 2.78 in 2012 to 2.78 in 2018.

 

  • Family Culture decreased by 27 percent from 3.08 in 2012 to 2.26 in 2018.

 

  • Family Health decreased by 8 percent from 4.63 in 2012 to 4.26 in 2018.

 

Each of the six major indexes consist of five sub-indexes for a total of 30 sub-indexes. The FPI uses 60 measurements, or variables, of social and economic data, and each sub-index uses at least one of these variables. If a sub-index uses two or more variables, each variable has an equal weight. Regardless of how a variable is used, it has two measures: its level (worth 80% of its value) and its 5-year average annual growth rate (worth 20%).

 

So, what can New Mexico to begin moving up in the Family Prosperity Index? To understand what New Mexico must do, we first must look at what went wrong. In particular, between the 2017 and 2018 editions of the FPI, the Family Structure major index suffered the steepest drop of all the major indexes of 37 percent from 4.43 in 2017 to 2.78 in 2018.

 

The reason for this drop was a steep decline in New Mexico’s marriage rate. In the 2017 FPI, New Mexico ranked 5th in the marriage sub-index, but only 47th in the 2018 FPI. Looking at the marriage data you can see why.

 

The marriage rate in 2014 was 0.84% (of the population) and fell to 0.64% in 2015 (the latest available data at time of publication). So, New Mexico’s marriage rate ranking was 37th in 2015 whereas if it had stayed at 0.84% then New Mexico would have had a top 10 ranking. The sudden change of direction in the marriage rate also subtracted points from New Mexico’s FPI score.

 

Looking historically in the chart below, New Mexico’s marriage rate has been volatile so it remains to be seen if this is a permanent downward trend or if it will reverse itself in the coming years. Averaging out this volatility, New Mexico’s marriage rate is near the U.S. average over this time-period. The first step in improving New Mexico’s FPI score is to permanently and significantly increase the marriage rate above the U.S. average.

 

 

The reason for needing a much higher marriage rate, is that the current low rate exacerbates three other significant and interrelated problems in New Mexico—the low ranking for children living in married couple households (46th), families with related children in poverty (50th) and unwed child birth (49th). The charts below illustrate the extent of these problems.

 

 

 

 

These variables measure the extent of the breakdown of the family which means many of New Mexico’s children are being raised by single parents. And single parenthood results in elevated levels of poverty—nationally, 32 percent of single-parent households are in poverty while only 7 percent of married couple households are in poverty.

 

This higher level of poverty, in turn, negatively impacts New Mexico’s social safety net (Medicaid 49th and Welfare 47th) which helps push up the overall government burden (50th). Greater government dependency reduces the private sector (49th) and, ultimately, per household personal income (49th). The charts below illustrate the extent of these problems.

 

 

 

 

With the Family Prosperity Index, leaders no longer have to guess which policies are better than others. New Mexico must increase family stability through marriage which is especially important for children. This will significantly reduce the strain on New Mexico’s social safety net which will reduce the burden of government taxes and spending on the private sector. A larger private sector will, in the long run, result in higher per household personal income further reducing poverty. This virtuous cycle will result in rising family prosperity, economically and socially, in New Mexico.

 

About the Author

Dr. Wendy P. Warcholik
Dr. Wendy P. Warcholik has worked as an Economist in public policy settings for nearly 20 years. She has extensive experience in applying statistical and econometric tools in public policy paradigms.