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Mar. 07, 2009
Copyright © Las Vegas Review-Journal

SHRINKING WORK FORCE: Jobless picture worsens

Construction, hospitality industries lead decline in state employment

By JENNIFER ROBISON
LAS VEGAS REVIEW-JOURNAL

Ricardo Puniel-Alvarez sits by a phone Friday to get information on unemployment insurance at Nevada JobConnect in Las Vegas. Puniel-Alvarez, who was on speaker phone, had been on the phone for several hours. One in 10 Southern Nevada workers was looking for a job in January, a 25-year high.
Photo by John Locher.

One in 10 locals were looking for work in January as Nevada's jobless rate surged to a 25-year high, and even major resort openings at the end of 2008 couldn't reverse a yearlong slide in hospitality employment.

Employers across Nevada slashed nearly 60,000 jobs from their payrolls year-over-year in January, the state's Department of Employment, Training and Rehabilitation said Friday. Among the casualties were 20,100 jobs in construction, 19,000 in hospitality and 10,800 in professional and business services. The result: a 10 percent jobless rate in Las Vegas and 9.4 percent unemployment statewide. That's up from 5.6 percent locally and 5.3 percent statewide compared with January 2008.

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    • The Department of Employment, Training and Rehabilitation seasonally adjusted statewide numbers, but not local data. Unadjusted, the state's unemployment level reached 10.2 percent in January.

    Employers cut 20,000 of those 60,000 lost jobs from December to January alone, said Brian Gordon, a principal in economic-research firm Applied Analysis.

    The trend indicates "an accelerating pace of contraction that is absolutely concerning," Gordon said.

    Blame that fourth-quarter spike in joblessness on the September collapse of Lehman Bros. and the ensuing credit crunch, said Keith Schwer, executive director of the Center for Business and Economic Research at the University of Nevada, Las Vegas.

    "That (Lehman Bros. failure) set in motion a whole series of contractions, and that has really sent the economy cascading downward," Schwer said.

    Troubled lending markets hit Las Vegas especially hard, because the city had more ongoing investment in new construction in the fall than most other cities could claim, Schwer said.

    Nevada's unemployment rate continues to surpass the national average, which clocked in at 7.6 percent in January. Numbers released Friday show a February jobless rate of 8.1 percent nationwide, the highest level in a quarter century.

    "This recession continues to impact Nevada disproportionately," said William Anderson, chief economist for the department of employment.

    Reps. Shelley Berkley and Dina Titus, both Democrats representing local districts, released statements on Nevada's ballooning unemployment.

    Berkley said the numbers highlight the need for expanded unemployment benefits that will give the jobless an additional $100 a month in payments.

    Titus pointed to the importance of a projected 34,000 Nevada jobs the recent federal stimulus package is designed to create.

    Nationally, the recession, now in its second year, has cost Americans 4.4 million jobs.

    But, the economic slump has hurt Nevada more than other states because the bust centers on housing and discretionary spending, two areas the Silver State traditionally leaned on for its strong growth.

    With fewer Americans traveling, Las Vegas' economic engine sputtered to a stop, Gordon said.

    Despite the November opening of Aliante Station and the December launch of Encore at Wynn Las Vegas, which collectively added 6,400 jobs to the tourism economy, the local hospitality sector dropped more than 13,000 jobs in the year prior to January.

    If resort operators continue to shed jobs through 2009, the openings of Fontainebleau and CityCenter won't have much more than a "modest" effect on the local economy, unlike the booms that previous big resorts initiated, Gordon said.

    Nor does he expect last Sunday's opening of the M Resort, which debuted with 1,800 employees and plans to add 250 more in coming weeks, to spur sizable job growth in February and March.

    A handful of sectors added jobs year-over-year in January.

    Mining added 600 jobs to expand 5 percent, from 11,900 workers to 12,500 laborers. The combined category of education and health services grew 3 percent, from 93,200 staffers to 96,200 workers. Government added 2.1 percent to its work force, going from 156,600 workers to 158,700 employees.

    And though Anderson said it's common during a recession for the unemployed to quit looking for work if they believe no jobs await them, the latest labor force numbers don't indicate that's widespread in Nevada or Las Vegas yet.

    The state's labor force increased 4 percent statewide, going from 1.35 million to 1.41 million year-over-year in January. The increase in Las Vegas was 4.5 percent, from 972,100 to 1 million.

    The employment department also noted that 96,000 Nevadans a week receive unemployment benefits now.

    Several "wild cards" could affect the trajectory of the state's job loss, including whether federal stimulus spending creates jobs in construction and green energy, Anderson said.

    "This is a very deep, prolonged recession," he said. "Absent those wild cards, it's going to take us a while to get out of this dilemma."

    Gordon agreed, noting that some early reports reveal a significant downturn in visitor spending in recent weeks.

    "The downturn was not unforeseen, but certainly, it's severe," Gordon said. "I think we're going to continue to see things worsen in the near term."

    Schwer said the local economy won't trend upward until the national economy recovers and consumers renew spending. Until that happens, Nevada could move toward an unemployment rate of 12 percent, he said.

    Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.

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    Lucy Hamilton wrote on April 10, 2009 12:03 AM: I'm trying to find your piece on Mr Cy's Casino ('Does anyone remember Mr Cy's Casino - the free breakfasts, dinners?'etc) and also an ad I found yesterday for the auctioning of one of Mr Cy's black plastic coupons. I came over from England as a youngster - travelling the States by Greyhound in the 70s.


    Emily wrote on March 13, 2009 09:24 PM: Eric where did you go to college, prestigious UNLV? Your ignorant comment leads me to believe that you spent too much time parting and not studding. Go back to school genius.


    aj wrote on March 08, 2009 06:07 AM: Eric,
    I happen to come from a lower middle class family who did not have the funds to send me to college. Agreed i did not excell an get a scholarship which i could have done, but my family needed money so i went to work to help out. Your comments are very elitist and stereotypical of the so called educated mighty left. I never had my hand out for anything either and always worked since i was 15 years old.
    blame barry
    Yes i will blame barry . He is not instlling confidence in any of his redistibution of wealth package. no one likes his ideas because they will take too long to institute and make a difference even if investers agreed and liked obummers ideas. But the one that really gets me is the so called top 2% tax increase for the wealthy making over 250,000 combined income which is not wealthy. While a very good income after taxes these people are the ones more likely to spend a few extra dollars and hire people in there small businesses . There goes there jobs. It is clear while obummer can talk intellegent. His policys are far from it!


    Don't Blame Barry wrote on March 08, 2009 01:38 AM: Until the banks get on stable footing, the economy is going to suffer. I don't think anyone wants the government to take over the banks.

    Obama and Bush both showed restraint in this area when most people know that many of them are insolvent. We may have to keep throwing money in that black hole because the government running banks is unthinkable

    It is not Barry's fault!!!!


    Eric wrote on March 08, 2009 01:16 AM: All of the jobs lost are for the uneducated. Get an education. Geniuses.

    Morons, live amongst us.


    The fact wrote on March 07, 2009 08:06 PM: The fact is that congressional republicans have been reduced to whiney pi55 ants without any real power. They mean nothing, they did it to themselves. Way to go GOP.

    So many idiots in this forum that only want to toss moronic insults, you know which ones you are!


    Amazing wrote on March 07, 2009 07:56 PM: to really,

    Limited math skills? you must be referring to yourself. The 12 zeros mean trillion and that 5 is the number of trillions.

    Obama an arsonist? ho ho ho laddie you are in total delousion and denial!


    Keep on Dreaming wrote on March 07, 2009 04:45 PM: "curious wrote on March 07, 2009 09:24 AM: How can it be that Nevada, with the lowest government employment per capita, and no state taxes can be in a mess?

    I thought the KEY to success in the world was no taxes and less government.

    Is it possible that I have been wrong all along?"
    ****************************************

    No state taxes? How about sales tax, gasoline tax, auto registration tax, real estate tax, liquor tax, tobacco tax, business tax, mining tax, gaming tax, insurance premium tax, and many, many more!


    Herb wrote on March 07, 2009 04:05 PM: Two of the main culprits in this economic meltdown are Barney Frank D-MA and Chris Dodd D-CT. They forced banks into giving poor people loans for McMansions they could never afford to pay back. That started this whole spiral down.


    What? wrote on March 07, 2009 03:39 PM: HA! Obama has been in office under 2 months! YOur wrong, this has been a LONG time in the making! Bush and Clinton own this one!


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