Nevadans’ wages sank during ‘90s

By Timothy Pratt

Wednesday, Dec. 11, 2002 | 11:07 a.m.

The paychecks most Nevadans took home during the '90s did not keep up with the rising cost of living during the same period, according to a report issued today.

The report said that the median, or midpoint, of all wages in Nevada fell from $11.56 an hour in 1989 to $10.72 an hour in 1998, adjusting for inflation. The drop of 7.3 percent during this period was the third highest in the nation.

Done by the Progressive Leadership Alliance of Nevada, the study says that despite growth in the economy represented by such indicators as an increase of nearly a million jobs during the last two decades, the average worker in the state is having trouble making ends meet.

"When hourly wages decline in a booming economy, it's a sure sign of trouble," said Susan Chandler, associate professor of social work at University of Nevada, Reno, and the report's author.

Only Alaska, which say a 10.8 percent drop, and California and Hawaii, which each had a 7.9 percent drop, had greater decreases, Chandler said.

The report recommends raising the Nevada's minimum wage, currently $5.15 an hour, setting up what is called a living wage for employees of local government and businesses that receive government funds, and increasing such "social safety net" benefits as Medicare and TANF. Living wages would begin at $8.53 an hour, according to the report.

Reactions to the report were mixed. Some observers criticized the study's methods, business leaders disagreed with the findings and recommendations and union officials trumpeted the findings.

"Those statistics would be much bleaker if it wasn't for the union," said Glenn Arnodo, political director for the Culinary Union, which represents about 45,000 resort workers.

"There has been tremendous job growth in nonunion casinos as well as other sectors of the economy and labor should reach out to these sectors as well because that will be the only way wages and benefits will improve," he said.

The report said that unionized casino workers in Las Vegas earn 40 percent more than their nonunion counterparts in Reno and have better health insurance.

The union renegotiated its contracts with the casinos this past summer, and Arnodo said union wages have increased a total of $1.95 an hour since 1997.

Justin Doucette, chairman of the Nevada Restaurant Association, is not sure if the report's numbers apply to his industry, which employs more than 66,000 statewide.

"As far as the restaurant sector, I'd have to question the conclusions," he said. Doucette, who also owns Coyote Cafe in the MGM Grand, said that his industry is creating some new positions and upgrading others, meaning that workers are earning higher wages.

The study measures wages for such jobs as cashier, waiter, maids, card dealers, managers, services supervisor and janitor, said Paul Brown, Southern Nevada director for PLAN.

Still, the negative impact of a drop in wages for some of Nevada's jobs over time would be outweighed by the benefits from an overall increase in jobs, Doucette said.

"If the cost of creating more jobs is lower pay, then so be it," he said.

At the same time, he said, the service sector of Nevada's economy has taken a hit since the Sept. 11 terrorist attacks -- a period not covered by the study.

Kara J. Kelley, president of the Las Vegas Chamber of Commerce, took exception to the study's recommendation to raise Nevada's minimum wage.

"We're opposed to this," she said. "We believe this equates to fewer jobs, since if you dictate to business that it must raise minimum wages ... the employer either reduces benefits or reduces jobs to meet higher costs."

Raising median wages for Nevadans, Kelley said, may best be achieved by diversifying the economy.

"The best way to do that is ... to attract new businesses whose average wage is higher -- like high-tech or manufacturing," she said.

Keith Schwer, economist with the Center for Business and Economic Research, said that the study's emphasis on strengthening the state's social safety net is what he called a "legitimate issue."

"This will be critical to the development of ... our future growth," he said.

"Affordable housing, health care and education are critical for Nevadans -- how to get there is the problem."