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Aug. 21, 2009
Copyright © Las Vegas Review-Journal

Las Vegas jobless rate hits all-time high of 13.1 percent

By JENNIFER ROBISON
LAS VEGAS REVIEW-JOURNAL

Nevada's unemployment rose to 12.5 percent in July, while joblessness in especially hard-hit Las Vegas surged to 13.1 percent. It’s the highest jobless rate both statewide and locally since the state began tracking data in 1976.

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    • No “green shoots” for Nevada.

    As economists and policymakers nationwide hover over the tender little economic tendrils that herald recovery from recession, Nevada’s economy looks as barren as the Mojave Desert.

    As a trickle of data points to the national downturn’s end, Nevada’s economy continues its descent. Joblessness in the Silver State jumped to 12.5 percent in July, while unemployment in hard-hit Las Vegas leapt to 13.1 percent. Both state and local unemployment scored their highest levels in 33 years of tracking, the state Department of Employment, Training and Rehabilitation said today.

    Nevada’s jobless rate was more than double its level in July 2008, when 6.6 percent of the state’s residents were out of work. In Las Vegas, unemployment was at 6.8 percent in July 2008.

    Bill Anderson, chief economist with the employment department, said Nevada remains stuck in the longest, deepest recession since World War II, and recent labor-market trends don’t signal any improvement.

    Joblessness in Nevada jumped 1.9 percentage points from April to June, the biggest three-month spike on record. Nevada shed nearly 28,000 jobs in the three-month period, including 15,000 jobs from June to July alone. Nationally, unemployment has moderated, declining from 9.5 percent to 9.4 percent between June and July.

    In all, 179,300 Nevadans are unemployed and actively seeking work.

    “It shows just how weak the economy is, that even this late in the recession, we’re still losing so many jobs,” said Jered McDonald, an economist with the employment department.

    Nevada has the nation’s third-highest unemployment rate. The Silver State trails only Michigan, with 15 percent joblessness, and Rhode Island, where unemployment is at 12.7 percent. Las Vegas has born the brunt of the state’s hard times.

    The city recorded the highest jobless rate of any of Nevada’s statistical areas, and it also ranks among the top five markets of its size nationwide for unemployment. Las Vegas lost 11,900 jobs from June to July, and 60,000 jobs year-over-year in July. The employment department blamed the job cuts on cutbacks in local government, slumping convention business and a sustained drop in construction activity.

    Las Vegas also hurts more today because it enjoyed an especially vibrant boom era, said Jeremy Aguero, a principal in local research firm Applied Analysis. The city grew more than most other markets in the 1990s and early 2000s.

    But that expansion came largely from unsustainble levels of consumer spending, Aguero noted, and it relied on a high concentration of workers in the volatile construction sector.

    Plus, Las Vegas feels the downturn more than other areas of Nevada because it’s less diverse, McDonald said. For example, Reno (12.1 percent unemployed) and Carson City (11.7 percent jobless) house more manufacturers, distribution centers, high-tech companies and professional and business services than Las Vegas has, and mining protects the state’s rural areas from the slump. Unemployment is just 6.7 percent in in Elko County, where high gold prices allow businesses to put the labor force to work.

    As high as unemployment is, the broader picture is even bleaker, said Keith Schwer, director of the Center for Business and Economic Research at the University of Nevada-Las Vegas.

    The employment department’s published jobless rate doesn’t include discouraged workers who’ve stopped hunting for jobs, and it doesn’t count underemployed Nevadans who’d like to work full-time but can find only part-time jobs.

    If you factor in the discouraged and the underemployed, Nevada had a 12-month average of 15.2 percent joblessness in the second quarter. McDonald said he suspects the rate is even higher now — perhaps nearly double the stated unemployment rate, and certainly close to 20 percent.

    Aguero sees underemployment written all over the latest figures that gauge hours on the job. The average number of hours worked by all private-sector employees in Nevada was 35.8 hours a week in June. That’s down from 37.5 hours in June 2007. Average weekly earnings also dropped, falling from $739 in June 2008 to $706 a year later.

    “This other layer of unemployment is pretty problematic for us,” Aguero said. “It says there’s substantial compression being pushed down on the average worker, and their ability to earn is much lower. But more important than that, there’s a general belief that both hours and wages will have to rebound before unemployment rebounds. These numbers are a greater signal on whether the economy is showing signs of improvement.”

    Even the basic statewide unemployment stats show few signs of improvement. Just two of Nevada’s major employment categories grew year-over-year in July. Mining added 100 jobs, for growth of 0.8 percent, while the combined category of health and education services gained 2,200 positions, or 2.3 percent.

    Construction lost 32,200 jobs, or 25.7 percent of its work force. Manufacturing employment shrank by 3,800 positions, or 7.8 percent. Leisure and hospitality companies cut 22,700 jobs, or 6.8 percent of their industry’s work force. The banking field was down 4,200 jobs, or 6.8 percent, while professional and business services such as law firms, accounting businesses and engineering companies slashed 10,700 jobs, or 7.1 percent of the sector’s work force. Governments statewide cut 4,400 jobs, or 2.9 percent of their total work force.

    There’s also no indication that the labor pool is shrinking from outmigration or any other cause. The state’s work force expanded 2 percent from June to July, growing by 28,000 people to 1.41 million workers. The local labor force grew 2.3 percent, or 23,200 people, to just more than 1 million. A bigger work force could contribute to gains in unemployment, while a smaller work force could curb jobless levels.

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

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    perry wrote on August 29, 2009 07:58 AM: i just thank my employer to keep me busy. how many people who are unemployed take nevada state money and go homei wonder. this is a transient town always will be


    Lee wrote on August 29, 2009 12:33 AM: Thanks Mr. President for advising companies and federal agencies not to hold their events at "fun" towns like Las Vegas!


    jimbo wrote on August 28, 2009 06:29 PM: I guess its human nature to just enjoy the boom times and forget understanding where the boom comes from.

    In our case it was people cashing out of the phantom equity in their homes courtesy of the banks, and then spending the money on expensive vacations.

    Now there is no equity to borrow against, and so people have to spend according to what they have in their pockets.

    Credit will come back, but its going to be years for it to do so.


    scout702 wrote on August 27, 2009 12:03 AM: Everything started changing in 95-96 in Las Vegas and only became worse.The rejects from the other states should go back home because all they do is come here and leave.I was born and raised here for 35 years and my family has been here since they built Hoover Dam.But no one wants to hire locals anymore because they dont want to pay retirement or benefits to anyone that is not a transient.


    RonNV wrote on August 26, 2009 06:24 PM: These are terrible numbers. We have to get our Senators and Representatives to get Obama to recommend and encourage business groups to convene in Las Vegas. Right now the Obama administration hates Las Vegas and that is really hurting our economy. Remember that in the next election.


    Mike wrote on August 26, 2009 04:56 PM: http://www.eHospitalityJobs.com is a helpful site for LV.


    Kevin Harvey wrote on August 25, 2009 11:44 PM: Hey Dustin, you are nothing more than a flat headed racist. Please be the first Birther/Deather/Nutjob/Pinhead out of town. This is Bush's mess you pathetic idiot.


    get out wrote on August 25, 2009 03:12 AM: Thats right there are no jobs here so everybody leave now. Take about 1,000,000 people with you, then we can get back to yesteryear of vegas. AHHH yesteryear. Oh don't worry about work for me, I do not need it. I trade stocks all day and go out and eat at fine restaurants where my entrees cost about $65 then I go gamble for a couple hours playing $25 slots and $100 hands of blackjack. If more people would learn how to fend for themselves then you wouldnt be taking it up the ... by working for the man. SUCKAS!!!!!!!!!!!!!!!!!!!!


    ocg wrote on August 24, 2009 02:56 PM: Nevada Job Center


    xJonx wrote on August 24, 2009 06:03 AM: >> Folks, ... this recession had its roots and took hold when GW Bush was President - not Obama.

    The TRUTH is that Bill Clinton (and let me just say, I don't blame him), signed into law a bill that allowed financial institutions to INSURE risky loans. The law:
    * did NOT specify that the financial institution providing the loan be the insured.
    * did NOT put the insurance policy under the eyes of the regulators.
    * did NOT specify that there had to be a one-to-one relationship between the loan and a policy.

    The result:
    Multiple financial institutions took multiple insurance policies out on multiple morgages that they EXPECTED to fail. SO, when people started defaulting on their morgages, true, the financial institutions who provided these loans lost money, the REAL drain on the coffers were the payouts of these insurance policies.

    BTW, it was ILLEGAL for the Executive branch (President Clinton, President Bush) to SEE theses insurance policies and the threat they posed, not alone to something about it.

    The bottom line, although the morgage industry was the catalyst for the crisis, it was not the cause AND although being a conservative I would love to blame President Clinton for signing into law the bill that really set the stage, being a fair minded citizen, I have to admit, the law was used in a way NOT intended, and so, I can't blame President Clinton. But, without a doubt, Presidnet Bush was certainly NOT to blame.


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