Hotel and casino cuts fuel rising jobless rate

By Nicole Lucht

Friday, April 24, 2009 | 2 a.m.

The state’s jobless rate has nearly doubled in the past year.

From March 2008 to last March, Nevada’s unemployment rate jumped from 5.4 percent to 10.4 percent, a 92.6 percent increase. Month-over-month, the state’s unemployment rate increased 4 percent to 10.4 percent. Las Vegas’ jobless rate is also 10.4 percent.

Nevada’s jobless rate hasn’t been this high since March 1983 when it was decreasing from a recessionary peak of 10.7 percent in November and December 1982.

Over the past year jobs in the construction industry dropped 14.3 percent from 94,700 to 81,200, a loss of 13,500 jobs.

Other industries that took a year-over-year hit were information services, such as telecommunications (6.3 percent), financial services (5.2 percent), professional and business services, including employment services (8.9 percent), and leisure and hospitality (5.8 percent).

In the leisure and hospitality industries, the greatest job losses were in hotels and motels without casinos (14,000 jobs cut) and casino hotels and gaming (13,400 jobs).

“Leisure and hospitality, the state’s largest industry in terms of employment, is feeling the impacts of the ongoing economic recession on discretionary consumer spending,” said Bill Anderson, chief economist for Nevada’s Employment, Training and Rehabilitation Department. “Numerous recent headlines highlight the financial difficulties many, if not all, of the state’s gaming companies are facing. On an industrywide basis, leisure and hospitality jobs have trended down markedly as the economic downturn has unfolded.”

Professional and business services lost 10,200 jobs, primarily in the administrative and support services sector. However, the management of companies added 300 jobs, or a 2.2 percent increase.

Health care and social services was one of two industries that experienced job growth over the year, adding 3,600 jobs to the Las Vegas market, a 3.6 percent increase. Air transportation and warehousing added 400 jobs, a 6.8 percent increase over the year.

The federal government added 100 jobs in the past year, although state and local governments lost 500.

UNLV economics professor Alan Schlottmann said the problem with the unemployment rate is that it doesn’t include discouraged workers and people who are working fewer hours for economic reasons.

Although 14,000 people who dropped out of the job market, as the economy improves those workers are going to jump back into the workforce, he said.

“We know that there’s a significant amount of people who are employed, but are employed part time for economic reasons,” he said. “Which means, you’ve got to work through those people becoming full time again before you start adding new workers.”

The Labor Statistics Bureau estimated that nationally, 7.7 percent of workers have stopped trying or are working part time when they would prefer full time. Schlottmann estimated that Las Vegas is at 8 percent since the primary industries, gaming and hospitality, are service-oriented and, as such, are more conducive to cutting workers’ hours.

“The thing that’s frightening about that, is that a lot of those people, at least the part timers, are going to have to be absorbed before they (businesses) start hiring again,” he said. “Until those folks are working full time, nobody’s going to hire a full-time worker.”