Las Vegas Sun

September 17, 2019

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Las Vegas in desperate need of diversifying economy

At a brief glance of a new study recently released by the Brookings Institution, Las Vegas looks strong.

But dig into the research a bit deeper, and the outlook goes downhill quickly.

In the study, which examined economic growth in the nation’s 100 largest metropolitan areas, Las Vegas ranked 29th in terms of overall growth from 2010 to 2015. The area’s total number of jobs increased 14.1 percent — the 22nd-largest percentage in the nation — while gross metropolitan product drew 8.9 percent and the number of firms that either started up or moved here went up 5.9 percent.

But the city ranked 94th in prosperity, which the researchers measured through changes in the annual wage, standard of living and the economic output per job. And in a category that was measured by changes in the median wage, the poverty rate and unemployment, Las Vegas was 84th.

The upshot: Las Vegas has rebounded significantly since the recession in the size of the workforce and in attracting new employers, but the type of jobs we’ve added are relatively low-paying.

So what’s the underlying factor behind the Jekyll-and-Hyde readings for Las Vegas?

It’s our lack of economic diversity.

The study showed that areas where most of the growth came in low-income jobs in fields like hospitality and retail have continued to struggle since the recession, while metros that boosted their workforces in technology and STEM professions prospered.

The good news for Nevada is that the Legislature’s Democratic leadership is working on an initiative to help diversify the economy.

Known as the Nevada Blueprint, the package includes legislation promoting job training programs in advanced fields, boosting public education, and providing additional small-business loans and reducing red tape to help business operators establish and grow new enterprises here.

Another key element: fostering growth in clean energy development.

“I think that’s going to be a significant job grower, and I think it’s going to be something that significantly helps to diversify our economy,” Assembly Speaker Jason Frierson said. “We ... need to be leading the charge when it comes to renewable energy. We have so much sun, and so much land to be able to do it … and I think there is a desire on the part of Nevadans to grow and make us the leader.”

It’s crucial that lawmakers come out of the 2017 session with ways to reduce Nevada’s dependence on tourism, gaming and mining.

The state has taken some steps in that direction, thanks to bold tax incentive packages to attract companies such as Tesla, while private businesses like Switch, the Las Vegas-based digital data company, also have helped broaden the state’s economy.

But there’s a lot more work that needs to be done, as is borne out in study after study. A recent look at Bureau of Labor Statistics data, for instance, showed that while Las Vegas was home to 1,960 percent more dancers than the average community, it has 84 percent fewer mechanical engineers, 76 percent fewer electrical engineers, 54 percent fewer people in computer and mathematical occupations, and 22 percent fewer elementary school teachers.

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