News

May 24, 2023

Las Vegas Suffers as Nevada Economy Droops, Costing Jobs

Nevada has the highest unemployment rate in the country at 5.4 percent as officials insist the economy must move away from its focus on gambling. Pedro Alvarez became one of tens of thousands of

Nevada has the highest unemployment rate in the country at 5.4 percent as officials insist the economy must move away from its focus on gambling.

Pedro Alvarez became one of tens of thousands of hospitality workers in Nevada to lose their jobs when the Las Vegas Strip shut down early in the coronavirus pandemic.Credit...Gabriella Angotti-Jones for The New York Times

Supported by

By Kurtis Lee

Reporting from Las Vegas

Pedro Alvarez never imagined his high school job delivering filet mignon and sautéed lobster tail to rooms at the Tropicana Las Vegas would turn into a longtime career.

But in a city that sells itself as a place to disappear into decadence, if for only a weekend, providing room service to tourists along the Strip proved to be a stable job, at times even a lucrative one, for more than 30 years.

“Movie stars and thousands of dollars in tips,” Mr. Alvarez, 53, said. “If it was up to me, I was never going to leave.”

Yet when the Strip shut down for more than two months early in the coronavirus pandemic, Mr. Alvarez became one of tens of thousands of hospitality workers in Nevada to lose their jobs. After the hotel reopened, managers told him that they were discontinuing room service, at least for a while. Since then, he has bounced between jobs, working in concessions and banquets.

“It’s been an uphill climb to find full-time work,” he said.

Nevada is an outlier in the pandemic recovery. While the U.S. economy has bounced back and weathered a steep ratcheting-up of interest rates — and even as many Americans catch up on vacation travel that the coronavirus derailed — the Silver State has been left behind.

Job numbers nationwide have continued to increase every month for more than two years, but the unemployment rate has remained stubbornly high in Nevada, a political swing state whose economic outlook often has national implications.

The state has had the highest unemployment rate in the nation for the past year, currently at 5.4 percent, compared with the national rate of 3.5 percent; in Las Vegas, it’s around 6 percent.

Because of Nevada’s reliance on gambling, tourism and hospitality — a lack of economic diversity that worries elected officials amid fears of a nationwide recession — the state was exceptionally hard hit during the shutdowns on the Strip. Unemployment in the state reached 30 percent in April 2020.

And although the situation has improved drastically since then — over the past year, employment increased 4 percent, among the highest rates in the country — Nevada was in a deeper hole than other states.

“This leads to a bit of a paradox,” said David Schmidt, the chief economist for the Nevada Department of Employment, Training and Rehabilitation. “We are seeing rapid job gains, but have unemployment that is higher than other states.”

Nearly a quarter of jobs in Nevada are in leisure and hospitality, and international travel to Las Vegas is down by about 40 percent since 2019, including drops in visits from China, where the economy is slowing, and the United Kingdom, according to an estimate from the Las Vegas Convention and Visitors Authority.

Union officials say there are about 20 percent fewer hospitality workers in the city than before the pandemic.

Gov. Joe Lombardo acknowledged the state’s high unemployment in a statement, saying that “many of our businesses and much of our work force are still recovering from the turmoil of the pandemic.”

“The long-term economic solution to Nevada’s employment and work force challenges begins with diversifying our economy, investing in work force development and training,” said Mr. Lombardo, a Republican, who unseated a Democrat last year in a tight race in which he attacked his opponent and President Biden over the economy.

The state is making progress toward those diversification goals, Mr. Lombardo said, citing Elon Musk’s announcement in January that Tesla would invest $3.6 billion in the company’s Gigafactory outside Reno to produce electric semi trucks and advanced battery cells, vowing to add 3,000 jobs.

Major League Baseball is preparing for the relocation of the Oakland Athletics to Las Vegas, where a stadium to be built adjacent to the Strip will, by some projections, create 14,000 construction jobs. The Las Vegas Grand Prix — signifying Formula 1 racing’s return to the city for the first time since the 1980s — is expected to draw huge crowds this fall, as is the Super Bowl in 2024.

Despite the state’s unemployment rate, the fact that the economy is trending in the right direction, both locally and nationally, bodes well for Mr. Biden’s chances in the state as the 2024 campaign begins, said Dan Lee, a professor of political science at the University of Nevada, Las Vegas.

“Should it remain on the right track,” Mr. Lee said, “that’s clearly good for the incumbent.”

But a potential complication lies ahead.

The Culinary Workers Union Local 226, which represents 60,000 hotel workers, has been in talks since April on a new contract to replace the five-year agreement that expired in June. The union could take a strike authorization vote this fall in an attempt to pressure major hotels, including MGM Resorts International, Caesars Entertainment and other casino companies, to give pay raises and bring back more full-time jobs.

More than a potential strike, the union, which estimates it has 10,000 members who remain out of work since the pandemic started, is a critical bloc of Mr. Biden’s Democratic base in Nevada. In 2020, Mr. Biden won the state by roughly two percentage points in part because of a huge ground operation by the culinary union. Those members could be difficult to organize should a shaky economic climate in the state persist.

“Companies cut workers during the pandemic, and now these same companies are making record profits but don’t want to bring back enough workers to do the work,” said Ted Pappageorge, the head of the local, which is affiliated with the union UNITE HERE. “Workload issues are impacting all departments.”

For Juanita Miles, landing a stable, full-time job has been challenging.

For much of the past decade, she worked as a security guard, patching together gigs at several hotels and restaurants. But when the pandemic hit and businesses closed, she realized she would need to pivot.

“I’m now looking anywhere, for anything,” Ms. Miles, 49, recalled.

In late 2020, she took a $19-an-hour job as a part-time dishwasher at the Wynn Las Vegas, Ms. Miles said, but the hotel soon reduced its staff and she lost her job. She returned, for a time, to working security at hotel pools, nightclubs and apartment complexes.

But Ms. Miles started to feel increasingly unsafe on the job during her night shifts, she said, recounting the time a man who appeared to be high on drugs followed her onto her bus home early one morning after a shift.

“I was no longer willing to risk my life,” Ms. Miles said inside an air-conditioned casino along the Strip where she had stopped for a respite from the 110-degree heat outside.

As slot machines clanged in the background and people packed around craps tables, Ms. Miles reflected on the job interview she had just come from at a nearby Walgreens.

She thought it had gone well, she said, and she hoped it would pan out. The $15-an-hour pay would help cover her $1,400 rent, as well as the other monthly bills — cellphone, $103; utilities, $200; groceries, $300 — that she splits with her husband, who works at a call center.

“Things are going to be tight no matter what,” Ms. Miles said, adding that if offered the job, she still hoped to eventually find something with higher pay.

Her dream, she said, is to open a day care center — a fulfilling job that would allow her to alleviate some of the pressure she knows rests on many parents.

For Mr. Alvarez, the longtime Tropicana employee, any hope of returning to the job he long enjoyed is increasingly fleeting. The hotel, which opened in 1957, is on track to be demolished to make space for the new Athletics baseball stadium.

“The city and the state seem to be on the rise,” he said. “But workers cannot be left behind.”

After he lost his job at the Tropicana, Mr. Alvarez started working at Allegiant Stadium when it opened to fans in fall 2020.

He helped set up platters of food in the stadium’s suites during football games, but the work, which was part time, ended when the season was over.

“I was putting together two and sometimes three jobs, just to make enough to live,” he said.

Several times during the pandemic, he said, he has feared he might lose his home in North Las Vegas, which he bought in 2008. (Eviction filings in the Las Vegas area in April were up 49 percent from before the pandemic, according to a report from The Eviction Lab at Princeton University.)

He filed for unemployment benefits and eventually found part-time work at the Park MGM as a doorman. On a recent morning, Mr. Alvarez put on his gray vest and tie and prepared to begin his midday shift there.

In June, the Vegas Golden Knights won the Stanley Cup finals at the T-Mobile Arena next door to the Park MGM. Witnessing the joy and celebration that swept through the hotel reminded him of why he had stayed in the industry.

“Helping people and bringing them joy is what this city is all about,” he said. “I just hope I can keep doing this work.”

Kurtis Lee is an economics correspondent based in Los Angeles. Before joining The Times in 2022, he was a national correspondent for The Los Angeles Times, writing about gun violence, income inequality and race in America. More about Kurtis Lee

Advertisement