LAS CRUCES, N.M. — The government shutdown could have a significant impact on the local economy if the shutdown is prolonged for several weeks according to an economics professor at New Mexico State University.
Chris Erickson said if the shutdown extends to more than a month that's when the effects would be more noticeable and could even put New Mexico in a recession because the state relies heavily on federal jobs.
"It's tough to get away from federal jobs because they are a very significant part of our economy," Erickson said.
The state has numerous federal jobs with White Sands Missile Range, labs up north and even the universities.
With the government shutdown, employees throughout the country have been furloughed.
White Sands Missile Range sent about 2,700 civilian employees home on the first day of the shutdown and they are yet to return to work.
Erickson said many of the people that work out of White Sands are working for contractors that could be using reserve funds to pay employees.
"When those contractors run out of funds and they start laying off employees, that will have a very significant impact on Las Cruces and Southern New Mexico," Erickson said.
He added most furloughed employees are likely dipping into savings or their last paycheck to pay for expenses.
Because of that the effects of the shutdown would be minimal if it's a short one but if the shutdown persists then people will not be willing to use up as much of their savings.
"They're going to start cutting back on discretionary spending," Erickson said.
That could mean not having dinner at a local restaurant and slowing down economic growth which according to Erickson is already half of the national pace.
Erickson said growth in Santa Teresa could speed up economic development with the area booming with manufacturing and warehousing jobs.
He added as the shutdown continues federal funding to state and local governments could be affected and could impact various programs and funding to schools that use federal dollars.