The wrong jobs: Why Nevada’s worst-in-US unemployment hasn’t changed
LAS VEGAS (KLAS) — Nevada remains stuck at 5.3% unemployment despite job growth statistics that suggest there’s plenty of work out there.
Why hasn’t the state’s unemployment rate returned to pre-pandemic levels, when it was around 3.6%? That was the lowest it had been since 1976, and it was roughly equal to the national average just before the COVID-19 lockdown four years ago.
Statistics showing phenomenal job growth in the state haven’t translated to a lower unemployment rate as Nevada once again registered the highest jobless rate in the United States in comparisons from the end of 2023. California was next at 5.1% and Washington, D.C., came in at 5.1%.
In terms of the number of jobs, Nevada has actually bounced back. In May 2022, the Nevada Department of Employment, Training and Rehabilitation (DETR) said private-sector employment had exceeded pre-pandemic levels during the previous month, April 2022. The state noted that government and hospitality jobs were still lagging at the time.
The state’s labor force has grown by about 100,000 people since then.
Hospitality jobs just recently met levels from before the pandemic. Jobs produced by the openings of Durango Casino & Resort and Fontainebleau Las Vegas helped.
“Structural unemployment” is a big part of the answer, according to professor Stephen Miller, director of research for UNLV’s Center for Business and Economic Research (CBER). Miller said Thursday that the job market has changed, but people haven’t caught up to it yet. There’s a mismatch between the jobs that are available and the people looking for work.
The changing job market
Employees have become more powerful, he said, citing the strike threats by several unions. The Culinary Union, bus drivers and health care workers have all flexed their muscles.
But while many people are still trying to get a job working at a resort, the available jobs are going to be in other sectors, Miller said. The Culinary Union’s success in negotiating higher pay and better benefits was a big win, but resorts are simply not carrying as many employees as they once did.
Miller points to the impact of federal unemployment benefits and stimulus money that allowed many to wait out the pandemic. “People are intelligent. They’re not stupid. They saved that money,” Miller said. And many used that time and took the opportunity to go to work where the new jobs were.
“Recovery from the pandemic was consumer-led,” Miller said. “It’s a matter of people recognizing what the situation is now.”
He said Reno has made that shift faster than Las Vegas. Where about 25% of jobs in Reno used to be in hospitality, now only about 15% of the jobs remain in resorts, Miller said.
The future of jobs
A report released Thursday by the Governor’s Office of Economic Development (GOED) indicates the state still needs to diversify its economy.
Dr. David Damore, the study’s lead author and the executive director of The Lincy Institute and Brookings Metro West, said, “The economic growth that Southern Nevada experienced over the past decade has been concentrated in lower-productivity and lower-wage occupations. As the COVID-19 recession again demonstrated, the lack of a diverse and resilient economy leaves the region and by extension, the State of Nevada, vulnerable to macro-level economic downturns.”
Miller said structural unemployment is a micro-level factor. There are several other macro-level factors.
Dr. Kris Sanchez, the Nevada State Director of the Department of Business & Industry, identified infrastructure as another factor.
The study was prepared by UNLV’s Brookings Mountain West, CBER and the Transportation Research Center. It addresses barriers and makes recommendations to strengthen and diversify the Southern Nevada economy. Among the study’s findings:
The region lacks coordinated planning and coordination — like a council of governments — compared to other metro areas in the West.
Gaps in job creation, labor productivity and wages have persisted due to Southern Nevada’s overconcentration of employment in low-wage and low-productivity occupations.
Manufacturing lags behind other metro areas, and manufacturing jobs in Southern Nevada pay lower wages.
Nevada can’t compete for some types of federal funding for infrastructure because of the lack of manufacturing and continued reliance on tourism.
Nevada is “overly dependent” on I-15 and pays the costs — pollution, traffic and road damage — from trucking that passes through the state.
The state needs more research facilities to develop expertise and develop funding to support the regional economy.
The study identifies developable land for industrial use: Primm, Jean, Sloan, Boulder City’s Eldorado Valley, Apex and UNLV North.
Those findings are the basis for recommendations that would help build a diversified economy.
The study suggests developing the long-talked-about supplemental airport along I-15 between Las Vegas and Primm, with warehouses concentrated there. It also cites the importance of I-11 as the flow of goods originating from Mexico and Latin America increases. Spending on transportation infrastructure — both road and rail — is important.
North Las Vegas is another focus, with recommendations to develop large-scale industry at Apex and research centers at the UNLV North Campus.
Another suggestion involves pursuing more development of electric battery industries and clean energy, both of which are priorities that carry federal funding support.
The study suggests the creation of an inland port authority “to develop and administer large-scale industrial infrastructure projects, along with a council of governments to coordinate development efforts.
See the full 170-page study here.
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