“I’ve got a lead on a night clerk job at Payless Shoes,” said a celebrant at the Nevada Day parade in Carson City last Saturday. “But it pays three-fifty, so I don’t know.”
He was walking toward the corners of Robinson and Carson streets, where the Carson Nugget is located. Upstairs in that building was Lt. Gov. Brian Krolicki, who was serving free chili to all comers. Krolicki will have a good deal to say about the job market in Nevada over the next four years.
In a time of little optimism, Krolicki is upbeat, “Because I think we’re making great strides today. While it may not be evident because of the high unemployment numbers that we experience today—and I know people are hurting—we’ve created over 22,000 jobs or sustained new jobs up to 22,000. … We’ve got people investing capital towards new corporate opportunities that will create jobs for Nevadans, including some offshore capital, which is exciting. You know, people from Asia are investing in Nevada. We just created 1,300 jobs in Nevada, [manufacturing] LED lighting and wind turbines.”
He will need that optimism, because the trials facing the state are discouraging. There are the oft-cited first-in-the-nation rates for joblessness and foreclosures and bankruptcies, and after three weary years of recession, the election results suggest the public’s patience is thin. This was the second election in a row in which the same bad economy was the principal issue.
Nevada may not have hit bottom yet. In recent months, historian Guy Louis Rocha has frequently argued that Nevada—because of its arrested population growth and the gloomy prospects of the gambling industry—could undergo a one-state depression akin to that experienced by the state for 20 years after the decline of the Comstock Lode.
Economist Glen Atkinson said that the state could yet go into depression.
“I think we’re in for an extended downturn,” he said. “I wouldn’t say a depression. That all depends on what we do about this movement away from a gambling economy. … There’s things we can do in the short run, but I think that we need to get started now to keep it from becoming a depression.”
Nevada’s history in economic development has been one of minimal investment and poaching from other states, particularly California. And the Nevada Legislature was always half-hearted about it as long as the state casino industry was thriving.
“We have squandered what casinos have done for us for all these years and didn’t diversify,” Atkinson said. “And now we’re in the midst of a panic and trying to do it, and that’s a bad place to be.”
The state has gone through fads, as when it tried unsuccessfully to turn itself into a computer-tech Mecca in the 1980s. Currently, it is trying to become a renewable energy center. Nevada has an edge in geothermal but otherwise is competing with states that have been willing to invest more. In addition, even if everything Nevada officialdom hopes for in renewable energy comes to pass, it won’t produce the kind of employment the casinos did.
“There’s no magic potion here,” Atkinson said. “The casino industry was an industry that employed lots of people, at not real high wages, but they employed a lot of people. No single industry that I can see is going to replace that in the short term or the long term. It’s going to be a whole different approach. We have to move away from economic development where we attract companies from other states. We have to find out what we can do best.”
He said he has been studying states that do not have the physical advantages Nevada has, such as Ohio and Pennsylvania, and found that even they were ahead of the Silver State—“alternative energies, material science, those kind of things, and nano-technology, all those things that we don’t have now.”
Reno political scientist Fred Lokken said Nevada’s ability to attract new economic activity will depend in part on what kind of businesses it seeks. It needs to beef up elementary and secondary education to attract companies concerned about schools for their workers’ children. It needs to beef up higher education “to attract the kind of industry that needs that kind of support,” such as renewable energy. And there’s no chance the state will have the money to do both. It will have to build slowly over a period of years, he said.
Governor-elect Brian Sandoval is unencumbered with commitments to interest groups. He was in a commanding position throughout the campaign, reducing the necessity for him to make promises or outline programs. His comments on the state’s economy tended to be general: “The answer to promoting greater economic diversity and broadening Nevada’s economic tax base lies in keeping our tax climate attractive and our tax burden low. I think that most Nevadans would agree that our future depends on being a state where people want to do business. We have to be as good as or better than our competitors and that is especially true when it comes to economic development and diversification.”
He is, however, encumbered in one way—he promised no new taxes, a pledge that even many business leaders considered unwise. “I don’t know how you get Nevada seriously back into economic development unless you rebuild the university system,” said one Reno business leader. “And you can’t do that—you cannot—without more money.” This businessperson, like several interviewed, said he does not believe that Sandoval and Krolicki appreciate the depth of the economic troubles facing the state. Some legislators agree, saying it accounts for Sandoval tying his own hands on taxes.
“I think it’s going to be a shock to Brian [Sandoval] when he gets into the spreadsheets,” said one legislator on a money committee.
Sandoval and Krolicki watched in 2008 and this year as elected officials paid the political price for a troubled economy. As much as they like to say that the private sector and not government creates jobs, the fact remains that the public holds government responsible for a lack of jobs.
Do Nevadans expect a quick fix?
“No, I don’t think they do,” Krolicki said. “And I think they know that government isn’t the answer. As the chairman of the commission of the Commission on Economic Development, I work with development authorities and a team at NCED. We can cheerlead, we can guide, we can help create regulations, we can help eliminate regulations, we can do a better job with statutes—those tools that we can have to help cheerlead and bring this kind of corporate opportunities and job openings to Nevada. … I’m excited about what we’ve done, I’m even more excited about the prospects going forward. We can’t do it quickly enough, again, when you’ve got 14 and a half percent unemployment. But I think people know that this is going to be slow.”
Lokken believes otherwise.
“They are looking for a quick fix,” he said. “Voters don’t have patience.”
He said the change of governors will both improve governance and raise expectations still higher.
“In Nevada, there’s also the void after Jim Gibbons,” Lokken said. “There’s this feeling that we haven’t had a governor for the last few years. … There was no real effort to revive tourism. It was a hand-wringing approach to the governorship. … I think that there will be a host of challenges and expectations that he [Sandoval] fix everything yesterday.”
There’s one factor bolstering state officials. That sound that broke across Nevada on Tuesday evening was a mass sigh of relief from economic development folks at the reelection of U.S. Sen. Harry Reid, source of federal dollars and loans for alternative energy projects and infrastructure. They had been particularly alarmed by Reid’s opponent calling green jobs a “scam.”
Lokken: “Thanks to Sen. Reid, for instance, we’ve seen pretty substantial grants running into the DRI [Desert Research Institute] and the campuses that help with energy.”