Essential

questiofl
How does economics
OurjState
affect people, businesses,
communities, and
governments?
Economy

The WO

246
 Chapter

Comprehension Strategy

Take Notes

When studying new

information, taking
notes can be very
helpful. We can write
down thoughts we
have about the text
as we read. You might
write things you find
interesting. You might
want to write things
you do not understand.
MUSEUM Any notes you take help
you comprehend what
you read.
In this chapter, you will
learn three different
ways to take notes as
you read about New
Mexico's economy.
MUSEUM
R E srane••

247
 Listen

Understanding Economics
conomics is an important force in the world. People both need
Key Ideas and want goods and services, but because resources are limited,
we have to make choices about how best to use them. Economics
• Trade means buying and
isthe study of how individuals, busines:.æs, the government, and society
selling. or exchanging, one
manage and make decisions about limited resources. It has to do with
thing for another.
the production, distribution, and consumption of goods and services,
• Money is the most widely so it includes the study Of money, employment, business, and industry.
accepted means of exchange
in most countries.
• Banks provide a service by Trade
helping people manage •lb understand economics, we first have to understand trade. 'liade
their money. simply means exchanging one thing for another. Have you ever traded
something with a friend? 'l?ading is also called bartering. Bartering
means to exchange goods or services without involving money.
Key Terms
For example, let's say you have a hoodie you never wear, but
barter your friend wants it. If your friend gives you something in exchange
coerce for your hoodie, such as paying for your lunch, you have made a

consumer trade. You exchanged something you did not want (your hoodie) for
something you did (a hamburger and fries). You have just made ati
currency
economic exchange!
deposit
economics
interest

producer

Comprehetsion Strategy

Two-Column Notes

It is important that
everyone have
healthcare How is the
healthcare
importarn to the
economy?

248
 .41

Grcxery stores carry

many goods he use
Buying and Selling every day. like these
'l liemost common type of trade is buying and selling. iX'hen you buy vegetables. ho are
something, you trade sotnething you have (money) for something you want the producers of these
(the item you purchase). When you spend money to buy sotrrthing, you are goods? Who are the
a buyer, or cutsunrr. consumers?
Now imagine you own a store. You have stocked the store with goods
you have purchased from manufacturers, or producers. Since your store is
providing goods for people to buy, you are a seller. As a seller, you want
custottr•rs to corne into your store and give you money in exchange for the
things they buy from you, not other goods.

Voluntary Trade
When people trade, do both sides always win? In the example of the hoodie and
lunch. the hoodie probably cost more than a burger and fries, but since you no longer
wanted the hoodie, you were satisfied with the trade. You voluntarily agreed to the
exchange, and both you and your friend now have something that satisfies you more
than the thing you traded away.
Now, in a different example, imagine you are wearing your favorite hoodie and
someone older, stronger. and more powerful than you demands that you give it
to him. Imagine further that the person makes threats against you if you do not
do what he says. In our example. you reluctantly hand over your hoodie. and the
person throws a $5 bill on the ground at your feet. He walks away saying. "Now
you can't say stole it." You gave away something and you received something in
I

return. but was this a fair exchange? Are you satisfied? Did you volunteer to make
the trade. or were you coerced, or forced, to do it?
There is a vast difference between a voluntary trade. like you and your friend
agreed to. and a coerced trade. As long as trade is voluntary. people make the
exchange because they expect to be better off as a result. The value of what they
gain is thought to be greater than or equal to what they give up.
With coercion, the person or group that was short-changed Will refuse to do
business with or even help the person or group that took advantage of them. The
person or group that was short-changed may even hope to reverse the exchange and
somehow get the goods or property back. Consider the many times trade was coerced
rather than voluntary in New Mexicds history. What were the results of the coerced
exchanges at the time? What are the results today?

Our State Economy 249

 corne in and exchange it for silver or
There are many different gold or use the note as money to buy
ways to pay for
things in local stores.
and services- What
form of payment is this After a time, state govenutrnt.s
woman using? printed money, but Jr•ople in other states
sonrtirrrs did trust its worth. 'l hen
US government printed paper money
and made coins that could be across
tlE country and around the world. ()ther
countrB did the sartr•- Most countries
have their own or paper and
coin money. Foreign currencies are not
usually auxpted by Anr•rican businesses,
but they can be exchanged for US
currency at most banks.

Checks, Debit Cards,

and Credit Cards
lu»ng ago, the only options for
getting the goods people wanted were
1 to trade (barter) for them or to spend
cash money (buy) for them. 'IOday,
consumers in the United States have
many spending options, including
checks, debit cards, and credit cards.
People can still Lise cash if they want,
but they do not have to.
Money A check is a document that
'lbday, people in most societies represents money. A check is always
use money to buy what they need, but written frorn one person or business to
People often use credit
cards instead of cash this was not always the case. Indians another. For example, when you go to
to pay for gwds and used the barter systetn to exchange work, the company you work for will
How are items they had for those they wanted. probably write a check to pay you for
credit cards different your work. You can take the check to
Fur traders sometimes used gold or
from cash?
silver coins frorn their native country. your bank and exchange it for cash,
Later, towns and had banks
cities or you can deposit (submit) it into an
that printed paper money called bank account of your own. Your employer
notes. 'l he holder of a note could can also deposit your pay directly
into your bank account. If you have a
checking account, then you can write

0000
0000

.1
 checks to Other people or businesses. the credit card will send a rtuynthly This couße is
reviewing their bank
But you may write checks only for showing all your charges
statements. Why is it
the amount of money you have in 'l be total of all your charges is called an
imprtant to monitor
your account. account balance. When your statement and understand a
Another way to go€kls and services comes, you can pay your entire balance bank statement?
is by using a debit card. Debit cards or part of it.

look like credit cards, but they work

very differently. Debit cards are used to Interest
access the money you have deposited One of the biggest drawbacks to
into your checking account. Instead Of using a credit card to
writing a check, you swipe your is the companies charge
card in a machine. Your bank will then
cardholders. Interest is a fee charged for
transfer funds from your account to
borrowirg rtumey. Banks also charge
the 'I he next
tiltr you look at
interest on Icyans. When you borrow
your account balance, you will see the trumey, it ends up costing you more
amount of your purchase subtracted becatræ of the you tnu.q pay.
from your balance. (.hecking your
account balance allows you to keep
track of your money.
Credit cards, on the other hand, are What Do YOU Think f)
a way to paying for things.
'Olen you slide a credit card through Do you think it is ever a good idea to buy
the machine at a store, the rnoney is not something on credit? If so, why? If not.

removed frorn your bank account. When why not?

you use a credit card, you are borrowing
money. 'I he bank or company that issued

Our State Economy 251

 (10% interest). Hut when you withdraw
Banking your savings plus interest. the balik pays
you Oli]y $102, which is the $100 you
You have read about paytng
deposited plus $2 "l hat means the
interest, but did you know that you
Can also earli it? Interest eari be a bank earned $8 {the difference between
the $110 the bank received from the
good thing if consumers understand
borrower and the SII)2 the bank paid
how to rtiÄke it work for them rather
youL 'Ibis is one Of the ways banks earri
than against them. Banks pay account
holders small of interest enough money to Stay in business.

on the money in savings äCCOL21itS.

means the bank pays you for the Saving Is Smart
privilege Of holding and protecting Saving money is almost as litupcjrt;.uit
your rtjoney. 'l he bank invests your as earning il- People have always tried to
money and earns interest on it. prepare for the future by saving rnoney. Iri

early days, hid money ill fruit

jars in the kitchen, under rüÄtiresses,. or in
Using Your Money
holes in the backyard. "Ibid,ay, banks and
When you put rii01iey in the bank.
credit unions provide a converuient and
itdoes not just sit there with your
name on it. Like any business. banks safe place to keep savings.
Savings accounts allow us 10 put
want to earn money, so the bank uses
your money to make loans. "Ille bank away funds for emergencies. special
charges borrowers rtiOre interest than it occasions, or experisive purchases.
By saving money before you make
pays you on your savings. Alld the bank
purchase, you can avoid paying the
keeps the difference.
"lb understand how this works,
interest charges associated with using
credit cards or borrowing Arid
imagine you deposit in the bank,
your money is safe in bank because
and bank agrees to pay you 2%
FDIC the
interest. While your money is in the
bank, the bank loans it to someone at
it's government
irisured by the federal
through the Federal Deposit Insurance
Corporation {FDICL "lhät means if the
Of 1
interest rate When the
pays bark the loan, she has to pay $11
bank goes Out Of business. the federal
which is the she borrowed plus $10 government will give you bark your
savings up to Sl

To Save or Not to Save ... Hw Dæslt Gr•?

Account starting with Sl,ooo at 2.6% interest
Save for larger items. Abby earns money
(Multiply times 5 if you need $5,000 in years)
babysitting and mowing lawns. She spends her
ENO' NE BAI-ANCL
money quickly on music, fast food. and jewelry.
Abbrs friend Sarah earns money at a hamburger year . $1,026.25

stand. She spends half of her money and puts the 2 years . $1,053.20
other half in the bank. She is saving for a car. 3 years ...................„....... Sit080„85
Save to avoid paying interest. When Sarah first 4 years
started saving at the bank, shewas disappointed in 5 years
the low amount of interest her money earned. Sarah's
parentst however, showed her haw much money she M S5,wo 18% IMereA
would save by not having to borrow money for a car. LENGTH Of LOAN INtCRLSt PAW PAID

Irierest Eured and Pa.id •1 year $845.89 $677-75

Yuu EARN 2 years $713.„31 $810.33
Savings Accounts at a Jank 3 •years $554.80 968.84
Certificates ofOcposit (CD's) ata Bank 1%to 4 years $365.28 %158.36
5 years $138.66 51.384-72
Yuu PAY
Credit Cards 8% to Total paid: S5,ooo.co
Bank or Credit Union Auto Loans Total amount paid over years — $7,617-94

252 Chapter g
 LESSON 2

Free Enterprise
veryone needs basic things to survive—food, clothing, and
Key Ideas shelter. Other things—such as certain brands of clothes, books,

computers, sports equipment, televisions, cell phones, and cars—

• The economic system of the
may be important to your lifestyle. Some
are not necessities, but they
United States is based on
gcx>d.s are manufactured, such as computer software and skateboards.
capitalism and free enterprise,
()thers are grown and harvested, such as pecans and strawlk'rries.
also called a free-market
'liees are cut down, and fish are caught and packaged. Whether they
economy. are u needs" or "wants," all Of these products are goods.
• Supply and demand play a role We also need services frorn people who have skills and training-
in determining value and price When we get hurt or sick, we need the services of nurses and doctors.
in a free-market economy. 'Iéachers educate students, pilots fly business people on trips, plumbers
install pipes in homes, and computer prograrnrtærs develop software.
• People, businesses, and the
People pay other people for these services.
government interact in a free-
market economy.

Key Terms
demand
free enterprise
profit
shortage
supply
surplus

Comprehension Strategy

The Cornell Method

A b'*e shop owner takes an order

over the phone- How does he
from free enterprise?

254 Chapter 8
 goverljment regulations. But while the
goverljmerit does Lake part in many economic
Economic Systems activities, and their businesses are the
An economic System is organized
backbone Of our economy.
way in which State Of riatiOf1
determines how best to use its resources
to produce goods and services and People, Groups, and
provide for distribution to the people. Businesses Interact
Differeüt countries around the world Individuals, groups, businesses. and
have different economie Systems, but the government interact to make a market
all economie SySLeniS answer four basic economy work smooth] yu Follow the diagram
questions—what to produce, how to to see how people. businesses, and the
produce it. how much to produce, and goverljmerit affect each other-
who gets what is produced. James and Marcy are the heads Of the
In the United States, Our Hores household. ('Ibe ltrernbers Of farni]y
system is on free enterprise. Our rtiake up a household.} They have twO children:
system is called capitalism or a Roberto alid James arid Matey work so
1

free„rüarket OL•OüOrny. Instead Of being they eari provide for their children. James sells
controlled by government as in ear'S. Marcy is nurse at the local hospital. She
economy, or by historical provides service.
CuSt01t1 as in a traditi0üÄl System, it is and Marcy are both human resources-
based competition among private
Ori 'l hey kll their labor; to businesses. Iri return
businesses. our system, producers and their labor, they earn rtiOriey,. Of
consumers are free to make economic James and Marcy use their income to buy
decisiori.s„ Business owners decide goods and services. 'lhey buy goods, such as
what to produce and sell, how to produce food, clothing, a:id school supplies for Roberto
and how much to produce in Order to
it. and Lila. 'l hey also buy services, such as roeal
make proflL lhey • le where their at restaurant or visit to the doctor
company will be located, how :rruch they
will charge for their product Or service, Follow the arrows to see how families and businesses
and who will work for them. What are
interact in a free-market economy:
Anyone can start business arid
some examples of how families supply labor to
make or sell goods and
businesses? What are some examples of goods and
Although business Owners eari make
services that families might get from businesses?
their own decision'lß. they rtiust follow

Households and Businesses Interact in a Market Economy

JAMES AND MARCY SUPPLY LABOR TO BUSIN

BUSINESSES DEMAND (BUY) LABOR FROM HOUSEHOLDS

la.rres Marcy

Flores Household Business

Lila Roberto

HOUSEHOLDS DEMAND GOODS AND S FROM BUSIN

BUSINESSES SUPPLY HOUSEHOLDS WITH GOODS AND SERVICES

Our State Economy 255

 SUDDIY and Demand
in the Free Market
In a free-market economy, the price of goods and services is generally determined by the
forces of supply and demand. Supply is the amount of goods and services that businesses
produce. Demand is the willingness and ability of consumers to buy goods and services. A
key goal for business owners in determining how much to produce is the ability to make
a profit. A profit is the amount of money left after expenses are paid. include
employee wages, rent on building or equipment, and taxes, among other things.

Affects SUDDIY Demand

When few people want to buy Mitnething, economists say
there is "low demand" for that good or service. When many
iRople want to buy something, economists say there is "high
Price
demand." Price affects demand. For example, if one candy cmand
bar costs $5, you probably would not want to buy very
many. But if the candy bar 50 cents, you may want
uppfy
to buy severaL

Price also affects M.zpply. If the price of a go«xl is too

high, people either cannot afford it or are not willing
to spend that much for it. Supply piles up, creating a
soplus. Low prices, however, can lead to low supply,
or a shortage, because producers cannot keep up
with the demand.
Price
eman
upply

LOCLULÜAffect
Price is affectedby supply and demand. Going back to the candy bar
example, if the people who make the candy bar only have a small number to sell,
they can charge high and still sell all their candy. When the supply of a
or service is limited. but demand remains high, consumers are willing to pay more.
If they had large numbers of candy bars to sell, they would have to charge lower
prices to sell them alL

256 Chapter 8
The Role of Government licenses to drive big trucks. Men and
'l he freedom to is important women who want to be doctors must
for all Americans. When our nation was graduate from medical school and pass
founded, our leaders created a government tests before they can open their doors to

that would protect vx•ople's freedom. Since patients. How do you think these laws
a market economy is about freedorn and protect the public?
choice, you might think the government has
no role in it. However, the government 'aill Protecting the Environment

has a role. Its job is not to take the place "l he government can watch over
of the market, but to protect workers and how companies treat the environment.
consumers. Itmight rnake laws against dumping
waste into the rivers. 'l hese actions
'l he government must protect lilx•rty
affect all of us.
and keep order at the sartw• time. When
people live and work together in a family,
community, business, or school, they
need to have rules. 'l hey need ways to
solve arguments. For the same reasons,
Linking the Past
the governmetit regulates, or oversees, to the Present
our economy. It makes sure people treat
each Other fairly. It makes sure the big In the past. people often got hurt on the job. Early factories
companies do not bully the smaller ones- were unsafe places. The machines were loud and dangerous.
l-efi look at how the goverrurrnt dcrs Textile mills (which made fabric) had sharp blades to cut
these things. cloth and needles to make stitches. Workers were hurt and
even killed.
Laws to Protect Us Children worked 10 to 12 hours a day in factories. mines.
Business owners are free to make their
and along with adults. If someone got hurt, the
mills, right
own decisions, but their are sorne laws
company did not help. The family simply made less money.
they must follow. 'l he govenrnent makes
these laws to protect workers, consumers, People began to see that this was unfair. They began to
and the environment. work for change. As a result. the govemment passed laws to
make factories and mines safer.
Protecting Workers
New laws said that children had to go to school (at least
Some laws protect workers. In some
some of the time) instead of to work. Today, children under
factories, workers must wear special
age 16 can only work a small number of hours. They cannot
clothes to protect them frorn danger(
work at dangerous jobs. People also won a shorter workday.
liquids or gases. Other workers must wear
An ordinary workday today is about eight hours long.
earplugs or safety goggles.
•Ibe governrnent also sets a mirurnum
wage. "l hat is the lowest arnount Of money
a business can pay a worker. •Ihe current
federal (or national) minirnurn wage is
$7.25 an hour. New Mexico's minimum
wage is higher, at $7SO. 'lhe minimum
wage is supposed to make sure that people
earn enough money to afford the things
their families need.

Protecting Consumers and the Public

Some laws protect consumers. For
example, companies that make toys are
not allowed to use paint that contains
lead. "I his is lead is toxic, or
poisonows, esJk'cially to children.
Chher rules protect the public. For
instance, truck drivers must have special

Our State Economy 257

 Interacting with the Government
Some and businesses sell their labor to
the governrnent. For example, trople in the military
work for the he mayor of your town
or city is a government worker. 'I he police al.u»

work for government. Firefighters, mail carriers,

and garbage collectors are government workers,
too. lhey provide their labor to the govenunalt- In
•

return, they earn incorrr•.

"Ille governrnent needs more than just

workers—it also needs goods and services. It

buys them frotn just like you and I do.

Government offices need palk:r, pens, staplers,

and hole punchers. 'l he government might hire
people from a cleaning company to clean its
offices every night. Or, it might hire a company
to study how pollution affects Jk•ople. As a result,
the government interacts with businesses.

Police protection is one of the services we

get from the government. do we pay
for this service? What do you think would
tnppen if did not provi&
this service?

The Govemment
SUPPLY LABOR TO GOVERNMENT
Interacts with Families
and Businesses in a
Market Economy GOVERNMENT DEMANDS LABOR
Follow the chart to
see how families
and businesses Government
interact with the Households
govemment in
a free-market
economy Give an
example of how TAX DOLLARS
a family might
supply labor to the
govemment. PUBLIC GOODS & SERVICES

258 Chapter 8
 We Pay Taxes
Who pays for the goods and services the government provides? We do—We pay
Taxes are the income the government receives. They are a way of sharing the cost of thngs
we all use and benefit from.
Taxes come in many forms. Each level of govemment collects taxes—federal. state.
and local governments. People and businesses pay an income tax on the money they earn.
Both the federal government and the state governrnent collect income taxes. Your parents
have to pay their income taxes every year by April 15. In addition to income taxes, the state
government collects a sales tax. Every time you buy clothes, video games. books, or other
products. you pay more than just what is on the price tag. The state government adds a
sales tax to the price. The sales tax in New Mexico ranges from 5 percent. to 9 percent.
depending on where you live. That means for every dollar you spend, you must pay an
extra 5 to 9 cents to the state gwernment.
Local governments collect property taxes. These are taxes on land, homes. buildings,
cars. boats. and other vehicles. The money goes into the town's budget. It is used to pay
for local schools and many other services.

Our tax dollars help to pay for road and repair, public edæation, and other public goods. This colorful overpass is known
as ttæ Big-I where 1-25 and 1-40 intersect near the center ofAlbuquerque. Tax dollars gwid for its construction.

BUSINESSES SUPPLY GOODS & SERVICES

GOVERNMENT DEMANDS GOODS & SERVICES

Businesses

TAX DOLLARS

PUBLIC GOODS & SERVICES

Our State Economy 259
 00 to
lthSOUrce!!
Comparing Federal and State Minimum Wage
This chart from the US Department of Labor shows each state's
minimum wage from highest to lowest. You can easily see how
the minimum wages compare to the federal minimum wage of
$7.25 that was set in 2w9.
58.10/51.25'
Ohio...' • • • • - • • $8.05
$8.05
511.50 Arizona
$11.00 58 ns1SA.oos
Massachusetts
Washington, , • • • •
Florida.
Montana.. 51 ss
$10.10 • •

51.50
$10.00 Missouri
Connecticut
510.00 Maine
California 57.25
9.15 New Mexico
Vermont..-••••••• Idaho... • •e - •s • sl.25
59.60
Alaska 91.25
Rhode Island. 5950151.75' Indiana sl.25
59.41
Minnesota $1.25
Washington.. •
59.25 Kansas, $1.25
59.25 Kentucky
Hawaii...••••••• $1.25
Maryland 9.002 North Carolina
North Dakota • ST 25152.006
Nebraska . $1.25
$8.90 Oklahoma
New York . Pennsylvania.. • • 51.25
Michigan • •
58.75
sl.25
sss5
South Dakota
WestV\tginia. - • • • • •e sl.25
•
ssso
Sl.25
58.40 Virginia
Arkansas...•••••••• Wisconsin.. • • • ss.15
ss.38
Oregon $5.15
ss.31
New Jersey . Georgia.
Wyoming.. • • • • •
Colorado •
9.25
$8.25
Delaware
Illinois • • • • • • •

Nevada

OBSERVE EVALUATE CONCLUDE

• How many states have a • What is the difference between • Why do you think some states
minimum wage above the the highest and lowest wage? pay a higher minimum wage
federal minimum wage? How • What is the average minimum than others?
many states are below? wage? • Why do you think some states
• How many states do not have a do not have a minimum wage?
minimum wage law?

260 Chapter 8
 LESSON 3

Working in New Mexico

rom north to south and east to west, in small towns and larger
Key Ideas cities, New Mexicans are working. 'léenage workers may have
part-time jobs in the summer. College students juggle work for
• When people specialize pay with the hard job of getting an education. Adults work in many
in only certain skills, they kinds of jobs that require different levels of education and skill.
become dependent on others. People work to earn money to take care of themselves and their
• The federal government is the farnilies. 'lhey work to feel satisfied when they complete a job and
largest employer in the state. do it well. 'l bey work to contribute to their community and enrich
their own lives.
• The New Mexican economy
is both specialized and

diversified in healthcare,
mining, farming, ranching,
manufacturing, tourism. and
the high-tech industry.
• New Mexico can only grow
so much because of a limited
supply of water.
• New Mexico's Native American
communities oversee their
own economies, but interact
with the state and federal
government to some degree.
Specialization and
Economic Interdependence
Industry is it was in the past. For
more specialized today than
example, there aremany different kinds of farmers. Sorne farmers
grow hay, and others grow nuts- Still, others grow fruits, vegetables,
and grains. farmers do not grow crops but raise dairy cattle that
produce thousands of gallons of milk every day. 'l hese are examples of
specialization. When groups specialize, they develop special skills and
strengths in certain areas. •l hen people and businesses depend on one
another to provide the things they do not produce themselves.

Key Terms
aquifer
interdependence
non-renewable
renewable
specialization
sustainability
urbanization

CornFehensive Strategy

Determine the Importance

262 Chapter 8
 Countries and regions specialize,
too. For example, coffee needs special New Eco hilitary Bases and Nationd Labs
growing conditions not found in must
of the United States. Countries that Colorado
have the right growing conditions
in growing coffee, such as
Colornbia. Similarly, Florida has just
the right climate for growing oranges,
so much of Florida's economy dqrnds
on orange production. When a country
or state sFcializes in a cvrtain product,
it will sell or trade its surplus at a low

cost. 'lhis is the country has

becOtne efficient at prodwing that Santa Fe
and can produce it for much less than
a country that dcxs not specialize in
that good. Countries, states, or even
comrnunities that specialize become Albuquerque
dependent on one another to provide
the goods they cannot provide for
economic
therrrselves. 'Illis is called

When economic interdeT*ndence

works well, groups ccx»perate and
provide for one another, and production
and trade increase. New Mexicans
deTr•nd on Colombia and other
New Mexico
countries to produce most of the coffee
they drink. 'Ibey also depend on Florida Amy

to produce oranges and orange juice.

People in Colombia and Horida depend
on New Nlexico to produce dairy
products, cattle, and much more.
Ai raceBu

New Mexico's Specialties

New Mexico's workers have good
skills, knowledge, and education. 'l
work in many different industries that
produce goods and provide services
for people in our state, our nation, rat

and even the rest of tik• world. New

Mexico's specialties are farming,
ranching, oil and gas production,
El Paso Tex a s
manufacturing, medicine, mining,
retail sales, tourism, and aerospace and
defense technology.
about a quarter of New Meixco's lands
are owned by the federal government.
Federal Jobs 'l his makes the federal government the

'l lie federal government is more largest employer in the state. More than
important to the ecx)ti0tny of New 20 percent of employed New Mexicans
Mexico than it is in most states. 'l lut work at one Of these federal facilities.
is because there are five US military Some New Mexicans venture iLßt over
bases arid two national laboratories the border into léxas to work at an
•

located here (see map). Additionally, army base there.

Our State Economy 263

Farming and Ranching Copper is one of the most valuable
Because New Mexico has less metals in the world, and New Mexico
access to water than most States, most isthe third-largest producer of copper
farmland is ursed for grazing the cattle in the nation. Molybdenum, a metal

that provide our state's roost important used to strengthen other metals, is also
plentiful inour state and is shipped in
agricultural goods: dairy products
and beef. NewMexico has at least 1.4 large quantities to (Alina. New Mexico

million cattle—more than 330,000 of is the largest producer Of potash in

the United States. Potash is shipped
which are dairy cows. 'Ibgether, beef
and dairy products generate about $3
all over the country and used as an
billion in annual revenue. New Mexico excellent fertilizer.

isarnong the top 10 states in milk Additionally, New Mexico has sortr•
production. 'lhese industries should of the richest deposits of uranium found
continue to flourish well into the future. in the country. In fact, only Wyoming
he leading planted crop in the
'l
producx•s rnore uranium than New
state is hay, which is used primarily
Mexico. Four coal mines in Northwest
to feed cattle, but it is also shipped as New Mexico produce more than 25
faraway as Horida and Japan. New millionpounds of coal every year.
Mexico is als the largest producer Nearly half of New Mexico's energy
Of chilies in the United States. New needs are trr•t through coal power.
Mexico can be purchased fresh,
chilies 'l he mined products in New Mexico
frozen, canned, or dried, and the Hatch are non-renewable resources. 'l hat
Chile A.ss€xiation hosts a Chili Festival rneans they exist in limited supply.
every Labor Day weekend. Pecans, Products such as hay and vr•can.s are
apples, onions, pinto beans, and blue renewable because they are unlimited or
corn are other important crops in can be easily replenished. Oil, gas, and
New Mexico. In fact, our state ranks minerals take thousands of years for the
earth to produce. I he world's
•
in the top three for pecan production.
rate of use is far greater than the earth's
'Ihrough irrigation and watersaving
farming our farmers have ability to produce them. "l hat means if

we continue to use these resources, the A harvests chili

established sucQssful systems and peppers. Do you think
prqxesses to continue producing these time will come when they will be gone.
peppers are renewable
products for many years. or non-renewable
resources? Explain

Mining and Oil and Gas What Do YOU Think your reasoning.

Mining is our state's second-largest

industry. Almost 80 percent of our What do you think should be done to
mining dollars come from oil and protect our non-renewable resources?

gas because our state has sorne of the

largest stores of crude oil, dry natural
gas, and natural gas liquids in the
-r
United States.
 Limited Growth Opportunities

While New Mexico seems to have something for everyone. the

reality is that there is less water in our state than in any other. That
creates several problems, not the least of which is how to support the
growing water needs of an increasing population. Water is available in
underground aquifers (deep, water-filled caverns), but it is a limited
it must be carefully managed.
resource. and
Though we have technology to study black holes in deep space.
New Mexicans still have to rety on traditional forms of irrigation. such as
acequia systems, to meet our water needs. For this reason, some New
Mexicans are concerned that we should slow urbanization (the growth
of cities) and population growth rather than promote it.

New Mexico's unique and dry landscape is shomased at Kasha-Katuwe

Tent Ræks National Monument near Santa Fe- The features hiking
trails and wildlife amid cone-shaped tent rock formations. How does this

park illustrate our statÜ economic challenges and opprtunities?

Our Såte Economy 265

 A High-Tech
Impact on
the Economy
ecause of today's computer technology, companies have changed
the way they do business. Computers now help companies store
information about their products and services. People around the
world can communicate through email and sell products and services on
the Internet. New jobs have become available for computer engineers,
systems administrators, designers. and programmers.
Online businesses have been one of the fastest growing economic
segments in New Mexico and across the nation over the last few years.
Some of these new companies offer their products and services only over
the Intemet. This allows them to keep operating costs down because

employees can work from a small office, warehouse, or even from home.
There are no showrooms or stores where people shop- Customers go online
to get a description and to view their products. They can shop, place an
order, and have it sent directly to their home or office, all of which costs
far less than maintaining an actual store—and is much better for the
environment!
Besides Intemet businesses, another advantage to New Mexico's
economy brought to pass by the technological age is the national
laboratories. The labs have brought money and tremendous employment

of the best jobs in the labs were taken by welladucated scientists from

other parts of the country. Often New

Mexicans had to settle for lower
paying jobs at the labs. To combat
this problem, the government created
programs to help New Mexicans learn
the skills needed for betteroaying jobs
at the labs and in other industries.
As technology continues to develop,
there will be many more economic
and employment opportunities for the
citizens of New Mexico.

266 Chapter 8
 Business owners who decide to
Manufacturing
From clothing to chemicals and establish companies in New Mexico
machinery to mattresses, manufacturing have found a welcoming cliltrate and a
companies in New Mexico produce population of hard&vorking citizens.
•l hey have also found state and local
a wide variety of goods. Our state's
governments that offer tax incentives
leading manufacturers produce
computer and electronic equiprnent, and provide land and buildings to
such as silicon computer chips, lasers, encourage business growth. With these
and precision machinery that support kinds of advantages, manufacturers
These workers are
the national laboratories and other are sure to build tnore factories in New
of the production line
high-tech industries.
Mexico in the future. With new in a high-tech solar
New Mexico cornpanies use many businesses will come many more jobs silicon factory

of our agricultural products to make for our skilled workforce.

delicious and nutritious foods, such

as wine, salsa, sauces, lx•ef jerky,
popcorn, honey, iarns, jellies, candy,
cookies, and lots Of products rnade
with chilies. 'l hese can be
purchased online and in gr€xery stores
all over the country.
Besides high-tech machinery
and tasty foods, New Mexicans
tnake cabinets, process cotton into
fabric, and process the minerals that
come from the mines. New Mexico
companies even produce solar energy
panels so not one ray of our blazing
sunshine goes to waste.

New Mexico is horr to a growing

ofcompanies connected
to the solar energy industry- Solar
panels like these convert wnljght
into electricity

Our sute Economy 267

 Retail
Retail sales is the business Of
goods or services from a fixed location.
New Mexicans need cars, clothes, food,
medications, and much more, so they
purchase the goods they need from
retailers. Exarnples of large retailers in
New Mexico include •rarget, Walmart,
and Costco, food stores such as
Allsup's and 'lbwn &
Country, and car
dealerships such as Nlelloy Dodge and
Garcia Honda and Subaru.

A physician comforts
a $Mtient having a CAT
xan (sinüar to an
x-ray)- Why might the
patient be afraid?
Transportation
fransportation is big business in
New Mexico. You have already learned
Medicine
that the Santa Fe 'liail was once one
'l he biggest employer in New
of the most important commercial and
Mexico is the healthcare industry.
military routes in the nation. 'lbday,
Nearly one in six New Mexicans works
thousands of cars, trucks, and vans
in this industry (see chart below).
travel the state's nearly 60,000 miles of
Doctors, nurses, therapists, dieticians,
highway, which includes three interstate
technicians, orderlies, aides,and other
highways. Building and maintaining
employees at more than 100 hospitals
these roadways millions of dollars
and medical centers care for New
and provides thousands of jobs to the
Mexico's citizens. As our population
people of New Mexico.
grows, the need for more and better
healthcare will also increase.

Employment in New Industries

utv%niæs
finnce& Irbizarxe 16.6%
3.3%
& Te&nial Sen•EE

4.1%
16.1%
ReA Heahh Care &

Actmnmd*ims & Food

14.4%
12.3%

13.2% P&AdrMistMim, MgntSeroces

Scxræ: Gzus of and Wage (QCEWI

268 Chapter 8
 NEW+
MEXICO
P ()RTR/NIT
Jon Barela
(1960- )

Jon Barcla has served in tbc cabinet

of Governor Susana Martinez since 2010,
when she him secretary of thc
New Mexico F.-ooomic Development
Ik•partmcnt- He was unanimously
reconfirmed to that post in 201
As the state's chicf cco<uunic
development officer, Barcla has focused
on making New Mexico more business
friendly through efforts to lower taxes on
corporations and simphfy regulations. His
efforts have helped crearc jobs for New
.Mcxicans- During his tcnure, New Mexico
has recognized as the No. I statc in
nation for jobs related to international
exports. Many of tbc jobs are with
com ics that spcxialiiß in exporting
in New Mexico to odrr
countries—chiefly to ,Mcxico- Barela's
work has aso resulted in the expansion
or rclcution of more than SO
to Mexico, including Union Pacifx,
Honeywell, ('omcast, Hagship Food
Group, and fidelity Investnrnts-
Before joining the governor's cabinet,
Barcla worked for Intel as its community
and government affairs nunagcr. He also
The New h€xico Rail Runner Erpress is part o/ the Rio Metro operated his own small business and
Regional Transit District. operated by the state How did New has served on the board of directors for
Mexico raise money for this rail sFtem?
a numlx•r of non-profit organizations-
He began his career in public service
'l lie most exciting recent development in New wotking in the office of latc New Mexico
Mexico's transportation history is the New Mexico Rail Joc Skeen. Barcla a
Runner Express. 'l his commuter train began running in graduate of Ias Cruces High He
July 2006 and travels from Belen to downtown Santa Fe, rcccivcd a &grce in international relations
from Gcotgctown University's School of
covering 97 rniles every day. During peak seasons, the
Foreign Service, as well as a law degree
Rail Runner makes as many as eight round trips from
from the Georgetown School of law-
Albuquerque to Santa Fe each day. In addition to this,
there remains more than miles of active freight and
passenger railroad track in New Mexico.
'l lie Albuquerque International Surtport is the

largest cornmercial airport in the state and handles

about six million passengers every year. 'lhe airport,
like the rest of Albuquerque, is committed to
sustainability. Sustainability refers to activities that
have little long term Irnpact on the environment-

Our State Economy 269

 ew Mexico has so many things to delight tourists that it is hard to know where to
begin! From mountain ski resorts to the Cumbres & Toltec Scenic Railroad to the

Gila Cliff Dwellings and Salina Pueblo Missions, our state offers sights, sounds,
tastes. and activities to please visitors of every age and culture. The wonders of our

"Land of Enchantment" are no secret because thousands of travelers bring billions of

dollars into our state every year.

Choco Canyon

Ghost Ranch

Brodbury Science M{ßeum

270 Chapter 8

Many people like to visit historic sites and
learn when they travel. New Mexico has dozens
Of historic locations where people can learn all
about our diverse history and culture. 'l here are
also history museums featuring Billy the Kid,
the Rouy Riders, Kit Carson, Los Alamos, the
Palace o the Governors (the oldest government
building in the United States), Silver City,
and even Smokey Bear. For those interested
in archaeology, there are the Aztec Ruins and
Bandelier National Monuments.
For the student Of science, there is the Very
Large Array (V LA), where scientists study deep
space. Additionally, there is the Atomic
the Bradbury Science Museum, the Ranch
Living Museum, and Dinosaur Museurn. At the
New Mexico NILLseurn Of Space History, visitors can
see real space rocks. If there's time, do not miss the
Rattlesnake Museum, and the International UF()
Museum. 'IOurists can also visit our four natural
provinces to learn about life in the mountains,
plateaus, tablelands, and plains. Anyone with an
tnterest ingeology should not miss White Sands
and Carlsbad Caverns, with a cavern more than
10 football fields long and 22 stories high! For the
animal lover, New Mexico is home to seven wildlife
refuges and sanctuaries.
A true center for the arts, New Mexico has
enough galleries, studio tours, and artist studios
to satisfy every artistic sensibility. •l here are
museurn.s of Indian Arts, Fine Arts, Folk Art, and
Spanish Colonial Aru '10 get the true flavor of New
Mexico's culture, visit the Indian Pueblo
Cultural Center, attend the Fiesta de Santa Fe or
G7thering o/ Nations Annual Powwow
'V
Tent Rock National Monument
Our State Economy
visit the •liaditional Spanish Nlarket held eveq
July on the Santa Fe Plan. Celebrate our Name
American heritage at annual events, such as the
Navajo Nation Fair and the Gathering Of Nati
Pow Wow. If you are looking for sotnething
different, viGt one of the monasteries, the Ice Y
Caves, or feel the 'l'aos Hum. Holiday travelers
can participate in Eve walks, Easter
pilgrimages, a Victorian Christmas, and even a
Winterfest-
rot
From the Santa Rosa Blue Hole to tir blue skies
stretching as far as the eye can see, adventure lies
around every bend in New Mexico. 'lhe land offers
and hiking and rugged
pristine trails for biking
back country for camping, hunting, rock clitnbing,
and caving- Ihe clear, blue waters in New Mexico's
rivers and lakes invite boating, fishing, rafting,
sailing,water skiing, and even scuba diving. When
you are ready to cottr• out of the water, head to
Deming and catch more water fun at the annual
duck races. Finally, our state's wide, beckoning
skies offer plenty of room for birding, flying, hang
and ballooning.
gliding, parasailing, skydiving,
Each October, Albuquerque hosts the largest hot-air
balloon festival in the world!
•10 indulge means to let go or to give in to a
desire. Many people like to indulge when the
travel. 'l hey eat rich foods, stay up late at ' t,
late in the morning, or lay for hours by the
. New Mexico provides many opportunities
travelers to relax and indulge—from spas, hot
springs, and resorts to the finest hotels, spaciows
adolx• casitas, and cozy historic inns.
International HOtAir galloon Fiesta
What Do YOU Think
Why is calling New Mexico the Land of
Enchantment an appropriate nickname?
271
 Both the federal and state
Tribal Economies governrnent.s also manage dozens Of
programs that support the state's Indian
As you have already learned,
New Nlexico's Indian tribes are population. exarnple, the federal

sovereign nations. VI hey have their own government grants money to help
Indian students afford college and other
governments, their own businesses,
educational opportunities. Increasing
and their own economies. Although
illegal in the rest of the state, casinos
high school and college graduation rates

have beü)tne a major business for many can help improve job opportunities and
stimulate economic growth for Indian
Native American cornrnunities. €1he
communities. 'lhe state government
state government supports gaming on
and assists the
the reservations tribes in also provides funding for community
making the casinos successful. developrnent projects. 'l lie federal,
state, tribal, and localeconomies rise
and fall together, so each has a vested
interest in helping the others succeed.

Former Bill Richardson meets

with several tribal leaders after signing tir
State Collaboration kt-

Free Enterprise v. Acequias

In the free enterprise system of our state and nation.

business owners hope to make profits and build their
companies. Typically, people participating in the same kinds Linking the Past
of businesses do not help one another. Instead. they become
very competitive. Business owners recognize there are limits to the Present
to thenumber of goods they can produce. 50 they want to
produce and sell as much as they can. Business owners do Today. meetings about the acequias
not want competitors to produce more goods than they can sometimes become very heated.
because competitors can then take away business. Water rights user-owners have
There is one system in our state, however. in which people changing needs and may fight for
in competing businesses have worked cooperatively for access to more water than they have
hundreds of years. As you have teamed. the acequias system had in the past. No matter how hotly
is a network of thousands of ditches and canals that carry debated the issues at the meetings
life-giving water to the arid fields and valleys of our state. however, officers will eventually
Even though farmers. ranchers, and landowners depend on reach a compromise. Cooperation
the waterways to sustain their competing businesses. these has been the tradition for hundreds
groups work together to manage the system. Each water of years.
rights user-owner sends one or more workers to the annual
spring cleaning. For generations, water rights users. officers.
and commissioners have met to decide how the water on the
common stream will be divided.

272 Chapter 8