Two years ago in this space, as the pandemic was starting to hit the Las Vegas economy disproportionately hard, I recounted the utter failure of the area’s movers-and-shakers to diversify the economy. Despite years of big talk, especially in the devastating aftermath of the 2007-2009 Great Recession, I cited a lot of data to suggest the Vegas economy had continued its boom-or-bust reliance on the one-trick pony of gambling/hospitality/live entertainment.
With the pandemic easing–maybe–the big talkers are again saying that now is the time for the Las Vegas to diversity for a sustainable future. ““Our recovery does not necessarily come from rebound, but from rebalancing,” Michael Brown, executive director of the Nevada Governor’s Office of Economic Development, recently told a session of the grandly named Las Vegas Global Economic Alliance. “Rebalancing will build the resiliency that we need in the Nevada economy going forward.”
But in my New to Las Vegas view, if local history is any guide, significant diversification ain’t gonna happen anytime soon. It’s simply a lot easier to stick to what you know best–here, quickly separating visitors from their money–than it is to strike out in a totally new direction involving, say, more better jobs for the locals.
And it’s sort of by a design that goes back to near the advent of legalized gambling–and quickie marriage and divorce–in 1931. The official policy long has been to do little to encourage economic development outside of this core. You don’t have to take my word for this. “Nevada must be kept small; let industry go elsewhere,” political kingmaker Norman Biltz, famously known as the “Duke of Nevada,” was quoted as saying in The Green Felt Jungle, the best-selling 1963 book about Las Vegas mob corruption by Ed Reid and Ovid Demaris. “Large industrial payrolls bring in large families, which cost more money in taxes for public services.”
Nearly six decades later, Nevada remains a minimal tax, minimal government state, with poor public schools and inadequate health care to show for it.
Underscoring this, the recently released new annual economic study by the Milken Institute of the U.S. “Best-Performing Cities” makes very clear that Las Vegas is anything but. On a list of 200 large metro areas, Las Vegas fell from a heady No. 23 in 2018 to No. 149 (a numerically lower rank is better), just outside the bottom quarter. Most of the drop came in the last year alone (from No. 88 to No. 149), one of the biggest falls on the list. This is not surprising, as few economies in the U.S. remain more dependent on a lack of social distancing than Las Vegas. The area now sits considerably behind such exciting large metros as Dayton, Ohio; Wichita, Kan.; Gulfport, Miss.; and Bakersfield, Calif. Continue reading
