Sin City and Nevada suffer brunt of recession – 25 percent underemployment rate for Nevada reflecting depression like stats.
The great recession has touched every state across the United States with a reverse Midas touch. Every average American has felt this recession to one degree or another. Yet few states have felt the economic implosion like Nevada. Here we have a state that highlights the heavy reliance on the housing bubble, conspicuous consumer spending, and ultimately the pop of the debt bubble. The data coming out on Nevada is not encouraging and overall trends show deep problems for states in the Southwest. Yet now that the curtain is being pulled back, we start getting a bigger glimpse of the profound problems that confront Nevada moving forward. We’ll look at population changes but also examine the housing and employment markets of the desert state.
2,643,085 live in the state of Nevada. Yet this number does little justice to where the bulk of people live. The Clark County population is 1,996,542 and this includes the largest city in the state, Las Vegas. The state heavily relies on gambling revenues for their economy and state budget. Nevada has no state tax. So when a budget crunch hits, there is little to do but to cut. But taking a deeper look at the state we find that revenues have fallen hard:
“(Sunshine Review) Nevada relies heavily on gaming income for state revenue; 53% of the state’s gambling income comes from the Las Vegas Strip. November 2009′s state gaming report for September 2009 showed 21 consecutive months of declines. Nevada News Bureau reports, “State Budget Director Andrew Clinger had no real comment on the gaming report, saying other tax reports due by the end of the month, including taxable sales, will be examined before a decision is made on whether a special session of the Legislature is needed to keep the current budget in balance.”
So for 21 months state gaming revenues have fallen like a lead balloon and have brought some casinos down to their knees. A large part of visitors to Las Vegas come from California. With California dealing with their own troubled economy and persistent unemployment, you can rest assured that the hit Las Vegas has taken comes from the economic ills of their neighbors. Nevada’s problems show how interconnected the economy is and how deep this recession really is. Americans are cutting back and a city that is dedicated to conspicuous consumption unfortunately is not on the menu for many Americans including spend-happy Californians. This is apparent when we track where people are putting their money.
The unemployment rate in Nevada has gone from healthy to depression like in the matter of three years: