Posted on: Jan 25, 2021, 01:59 am.
Last update on: January 25, 2021, 02:22 pm.
Nevada’s economy needs to grow beyond reliance on the gambling industry and add other types of industries, two economists said. Her prescription is in response to a recent call by Governor Steve Sisolak (D) to diversify the state’s industries in light of the coronavirus economic downturn.
Nevada Governor Steve Sisolak, shown above, called for a more diverse economy last week. Two leading economists agree that the state’s economy should be less dependent on the casino. (Image: AP)
According to Stephen Miller, director of the UNLV Center for Economic and Economic Research, 30 percent of Clark County’s jobs are currently in the gambling, recreation and hospitality sectors.
We need to rely less on sectors where people interact face to face like restaurants and bars, hotels and casinos, etc. to address the pandemic recession. “ Miller told Casino.org.
Shortly after the coronavirus outbreak last March, the Nevada unemployment rate rose to over 30 percent in April. Gradually, the unemployment rate partially recovered.
In November it was over 10 percent. Unemployment is closely related to the decline in gaming revenue in places like casino-dependent Clark County.
Despite the gradual improvement over 2020, gross gaming revenue (GGR) on the Las Vegas Strip was $ 349.8 million in November. According to reports from the Nevada Gaming Control Board, that’s a 32.5 percent reduction from November 2019.
Since November, the gaming floors, bars and restaurants in Nevada have also been forced by Sisolak to reduce occupancy to 25 percent of capacity. Some hotel casinos also close hotels in the middle of the week due to lower reservations.
Tesla offers variety
But not all of Nevada has that kind of trust. Miller gives the example of the Tesla Gigafactory in Storey County’s Tahoe Reno Industrial Center. It is located near Reno in nearby Washoe County.
The plant produces lithium-ion batteries and components for electric vehicles. It employed about 7,000 workers two years ago.
The region “is doing better through the COVID-19 recession because it has diversified its economy”. Miller said.
With that Tesla plant and similar changes, Washoe County’s reliance on recreational and hospitality jobs rose from 30 percent to 15 percent, Miller said.
Economic diversification in Clark County
Clark County wasn’t that lucky. A few years ago, the county was hoping for a more diverse economy when Faraday Future planned to build a $ 1.3 billion electric vehicle plant in north Las Vegas.
But the company dropped its plans in 2017. With the abandoned plans, the district lost the more than 4,000 expected new jobs.
In retrospect, Miller said, Nevada’s efforts to diversify through the governor’s economic development have been in the state since the 2007-09 recession.
John Restrepo, Principal of RCG Economics in Las Vegas, theoretically agrees that the state’s economy should be less dependent on traditional sectors such as gambling.
“The current economy in Nevada has become economically fragile over time as the world economy and technology have changed. Economic disruptions are not handled very well as they depend largely on this discretionary spending by outsiders – individuals and businesses – as well as … a large number of low-skilled, low-wage workers, “Restrepo told Casino.org.
He would like more investment in higher education and the training of the workforce.
In Nevada, too, there are more immediate steps towards a stronger economy. Including widespread use of the COVID 19 vaccine and robust infrastructure programs.
“Economic development is a realistic goal, but it will take a lot of time, talent, treasure and political will from the private and public sectors, as I often say,” Restrepo added. “Nevada really has no choice if it is to have a more resilient, sustainable, and modern economy.”