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June 4, 2012

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THE ECONOMY:

Prospects are grim for job growth in Las Vegas

By Nicole Lucht

Fri, Aug 28, 2009 (3 a.m.)

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Las Vegas’ economy is going to need more than CityCenter’s opening — and massive hiring — to rebound to pre-recession employment levels, a local economist said.

Las Vegas’ jobless rate jumped 92.7 percent since July 2008, the state’s Employment, Training and Rehabilitation Department reported Aug. 21. July’s jobless rate was 13.1 percent, up from 12.3 percent in June and 6.9 percent in July 2008.

For the employment rate to return to pre-recession levels, an additional 60,000 jobs are needed, said Brian Gordon, principal of Applied Analysis, an economic consulting firm. In July 2006, as the economy boomed, Las Vegas’ jobless rate was 4.6 percent and the economy had a year-over-year increase of 48,900 jobs.

Prospects for job growth in the next six months are few. CityCenter is expected to create 12,000 jobs when it opens in December, and the 3,000 hotel room Cosmopolitan isn’t expected to open until the third quarter next year. CityCenter’s hiring could lower the jobless rate 1 percentage point, Gordon said.

“It will certainly help to stop the bleeding,” he said.

But the economy needs more jobs to heal.

“We need a substantial amount of economic expansion,” Gordon said. “That will certainly take time.”

The gaming sector will have to expand, and construction will have to return to normal levels, he said.

More is needed, though, and noncore industry sectors will also have to expand to shore up employment levels.

“This situation is not going to correct overnight,” Gordon said.

In July, 7,800 additional workers in Las Vegas sought unemployment benefits. The figures don’t include workers who have maxed out their jobless benefits, those who have given up looking for work and those who are working fewer hours than they would like.

The state’s jobless rate experienced the largest three-month surge on a percentage basis since 1976, said Bill Anderson, chief economist of the state’s employment department. Nevada’s unemployment rate in July increased to 12.5 percent while the national rate decreased slightly: down 0.1 percentage point to 9.4 percent.

Statewide, 9,700 additional workers filed for jobless benefits last month.

“For Nevada’s tattered labor market, the bottom of the business cycle can’t come soon enough,” Anderson said.

The decline over the past month is attributed to many factors, including government cutbacks, falling convention business and the ongoing drop in construction activity, he said.

“Six months ago, the economy felt like it was in a free fall,” said Alan Krueger, Treasury chief economist and assistant secretary for economic policy. “We’re seeing increasing signs the economy is stabilizing ... (but) a lot of work remains to be done,” he said Aug. 7 after the national jobless rate was announced.

Krueger touted the federal recovery plan as having a hand in what could be the end of the recession.

Anderson said the state will likely lag behind the national recovery. For example, Las Vegas ranks fifth in unemployment of U.S. cities its size.

Those with jobs are receiving fewer increases in benefits and pay, but experiencing cuts to their hours.

Since 2007, Nevadans are working fewer hours and are earning less, according to the Labor Statistics Bureau. The weekly average for workers in the private sector was 35.8 hours in June, down 1.7 hours from 37.5 hours in June 2007. During that time, the biggest decline in workers’ hours was in the manufacturing sector, down 2.6 hours from 40.3 hours to 37.7 hours. Workers in the business and professional-services sector also experienced cuts in hours, losing 2.2 hours per week from 37.2 hours to 35 hours.

Even with a slight increase in hourly wages — up 13 cents from $19.59 in June 2007 to $19.72 last June, private-sector workers overall are collecting smaller paychecks. Weekly pay went from $734.63 in June 2007 to $705.98 last June, the bureau reported.

On the national level, employers are cutting back on employment costs, the bureau reported. In the past year, employees working in the private sector have experienced the smallest wage and benefit increases since the bureau started recording the numbers in the late 1970s.

In June 2008 workers in the private sector received a 3.1 percent increase in wages; this past June that increase dipped to 1.6 percent.

Benefits also took a hit, from a 2.6 percent increase in June 2008 to 1.3 percent last June.

Nevada’s jobless rate is the third highest in the nation, behind Michigan (15 percent) and Rhode Island (12.7 percent).

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