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UNEMPLOYMENT DATA: Jobs report only part of story
Official says number of 'distressed' workers
probably close to 25 percent
January 23, 2010 - Sure,
December's jobless numbers look bleak.
But Friday's official unemployment numbers seem positively rosy once you factor
in discouraged workers who've surrendered the job hunt and part-timers who want
full-time positions.
Nevada's unemployment rate surged from 12.3 percent in November to 13 percent in
December, the state Department of Employment, Training & Rehabilitation said
Friday. In Las Vegas, joblessness jumped from 12.1 percent to 13.1 percent.
Include discouraged workers and part-timers, though, and broader joblessness
could be approaching 25 percent, said Bob Potts, assistant director of the
Center for Business and Economic Research at the University of Nevada, Las
Vegas.
"Workers who have lost their benefits, workers who are on furlough days, someone
who was in construction making $25 or $30 an hour and now helps in a school
kitchen making $8 an hour -- they're all distressed workers," Potts said. "A
quarter of our employment base is distressed."
Since employment in Nevada peaked in May 2007, job losses have visited every
category save one: the combined education and health services grouping.
Construction has felt the biggest pinch, with 71,600 jobs gone. The leisure and
hospitality industry is a distant second, with 44,100 positions lost. In
December, 176,000 Nevadans were out of work, including 128,200 Las Vegans.
Blame the December doldrums in particular on slower-than-average retail hiring
and sizable cuts in resort employment. Nevada's retailers hired 3,000 seasonal
workers from October to December, just half of the 6,000 holiday staffers they
normally retain. And even with the December opening of the 12,000-employee
CityCenter, the leisure and hospitality sector cut 3,900 jobs, most of them in
Las Vegas.
"The opening of CityCenter, though very welcome and positive, just doesn't
offset all the negative forces that are in play in terms of consumer spending,
in terms of foreclosure activity and in terms of job losses," said Bill
Anderson, chief economist for the state's employment department. "Those kinds of
forces are still in play."
In fact, resorts have slashed tens of thousands of jobs in recent years despite
long-term growth. Since resort employment peaked at 276,100 in June 2007,
several major hotel-casinos have come online, including Encore, Palazzo, Aliante
Station, M Resort and CityCenter. Yet, employment in the leisure and hospitality
sector, which also includes arts, entertainment and restaurants, has fallen to
242,600 workers.
Brian Gordon, a principal in the local research firm Applied Analysis, said
hotel-casinos pared work forces as visitor volume and discretionary spending
slid. Properties have become more efficient, and the employees left behind
handle bigger work loads. That new operating paradigm isn't likely to reverse
until managers see at least a few quarters of increased demand, and even then,
they'll be cautious about adding too many employees, Gordon said.
Anderson doesn't expect a quick turnaround in the state's employment situation,
either.
"Despite the length and depth of the downturn, Nevada's job market will likely
worsen in the months ahead," he said.
Anderson told the Economic Forum, a group of business leaders who met Friday to
discuss state revenue forecasts, that Nevada would lose nearly 90,000 more jobs
in 2010 and 2011. Observers also say joblessness in 2010 could exceed
September's record of 13.3 percent statewide and 13.9 percent in Las Vegas.
Potts said he expects the "biggest shock" in jobless numbers to come in March,
when the Bureau of Labor Statistics reconfigures its numbers based on quarterly
Census data (current numbers come from sampling and surveys).
"When they rebase those numbers, we will see numbers more dramatic than we've
seen," Potts said.
Gordon added that it's difficult to forecast records, because major shifts in
people leaving or moving to Nevada could affect jobless percentages. But through
the first half of 2010, at least, unemployment could tick upward.
"The fundamentals of the market continue to suggest that we have yet to see the
bottom," Gordon said.
Still, experts said they believe Nevada will get back the jobs it's lost since
the state hit peak employment in May 2007. No one the Review-Journal spoke with
would estimate a time frame on a return to those job levels, but Gordon said
it'll be measured in years, not months.
Recovery in the near term will be uneven, with some industries faring better
than others. Construction should struggle through 2010, while leisure and
hospitality will probably stabilize as room prices firm up and occupancy levels
off, Gordon said.
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