Thursday, Jan. 3, 2002 | 11:19 a.m.
Source: Nevada Department of Employment
Like a bolt of lightning, a Wall Street Journal story on Wednesday sparked new flames in the longstanding rivalry for economic bragging rights between Northern and Southern Nevada.
Journal reporter Robert Gavin wrote that the Reno economy is coasting thanks to its recent efforts to attract new, non-gaming businesses. In the meantime, Gavin wrote that Las Vegas' tourist-dependent economy is getting battered in the recession and terrorist-caused tourism slowdown.
"Over the past decade, while Las Vegas boomed with new casinos, hotels and tourist attractions, the Reno area pursued a less glitzy economic-development strategy: diversification," Gavin wrote. "Instead of high rollers, the region sought and landed manufacturing, high tech and financial services companies."
Gavin cited statistics that indicated Reno's November unemployment rate of 4.2 percent was below the national average of 5.7 percent and substantially lower than the current 6.5 percent jobless rate in Las Vegas. He also indicated that Reno is growing far differently than Las Vegas in terms of its reliance on the gaming industry as a primary employer.
"And while gambling employment in Reno grew by just 10 percent over the past 20 years, accounting for only 4 percent of new jobs created during that period, gambling employment in Las Vegas more than doubled during that period, accounting for more than 25 percent of the city's new jobs, the most of any sector," Gavin wrote.
That reasoning didn't sit well with Somer Hollingsworth, who works with business and civic leaders to diversify Southern Nevada's economy as president and chief executive officer of the Nevada Development Authority. He dismissed claims that Reno is doing a better job of diversification than Las Vegas as a "bunch of malarkey."
"That article was a great spin on something that is factual if you only look at certain facts," said Hollingsworth.
Southern Nevada's diversification efforts have actually exceeded those of Reno, considering the growth that's occurred in both cities over the past decade, Hollingsworth said.
Hollingsworth said approximately 120,000 Southern Nevada residents, or about 28.5 percent of the area's total workforce, were employed by businesses in the hotel, gaming and recreation sector in January 1992. By May of last year, that percentage had dipped to less than 25 percent despite the addition of nearly 80,000 jobs at new Las Vegas megaresorts such as Bellagio, Mandalay Bay and the Venetian.
"With all the gigantic growth that gaming had, non-gaming growth not only kept up with (gaming), it surpassed it," Hollingsworth said.
"If what happened Sept. 11 had happened back in 1992, you would have seen huge layoffs not only in gaming but in what we classify as non-gaming businesses because they were so related. This community has done a phenomenal job in bringing non-gaming companies in."
Though he had not read Gavin's article, R. Keith Schwer, director of UNLV's Center for Business and Economics Research, said the facts support Hollingsworth. To illustrate the challenges associated with comparing Las Vegas and Reno solely by their employment percentages, the longtime economics professor offered a food-based analogy.
"The portion of Southern Nevada's gaming pie has remained the same, but the pie has become much bigger," Schwer said. "In Reno, the pie isn't growing as much, but the slice that is gaming has grown smaller."
Schwer also said Reno's shift away from gaming took place out of economic necessity more than as a part of a concerted effort to change its economic dynamics.
"Reno had to diversify," Schwer said. "It took them awhile, but they finally came to the striking conclusion that gaming was not going to grow very much there.
"Gaming and travel/tourism has grown (in Southern Nevada), but they were simply unable to continue to grow that in Northern Nevada. At best, it was stagnating for them but that clearly was not the case here in Southern Nevada."
Chuck Alvey, president and CEO of the Economic Development Authority of Western Nevada, was more receptive to Gavin's article.
"The Wall Street Journal article is a tremendous testimony to the variety of factors that helped minimize the (recession's) impact here," Alvey said. "At the top of that list is a broadening economic base, which is the heart of our efforts in economic diversification. This is a wonderful win for the region to be featured so prominently in this prestigious publication."
Gavin also credited organizations like EDAWN with helping the Reno area to land several high-tech operations including Microsoft, Oracle and Cisco Systems.
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