Why Are Americans Wary While the Economy Is Healthy? Look at Nevada.

Why Are Americans Wary While the Economy Is Healthy? Look at Nevada.

Toni Irizarry acknowledges that the economy has improved. Compared to the first wave of the pandemic, when Las Vegas went dark and unemployment rose to levels not seen since the Great Depression, these are days of relative normalcy.

Ms. Irizarry, 64, runs a cafe at the Orleans Hotel and Casino, a property just off the Las Vegas Strip that caters mostly to locals. Patrons have returned and are filling the blackjack and roulette tables amid the cacophony of jingling slot machines – the sound of money.

She started working in the hospitality industry as a bus driver when she was just 16 years old. Her salary enabled her to buy a house, raise three children and buy each of them their first car. But as she thinks about the future, she can’t shake a premonition.

The attitudes of people like Ms. Irizarry could be crucial to who occupies the White House. Nevada is one of six battleground states expected to decide the outcome of November’s presidential election. Its economic centerpiece, Las Vegas, was built on dreams of easy money. This proved promising for generations of working people, providing the middle class with paychecks for bartenders, restaurant waiters, casino dealers and maids. But over the past two decades, a series of shocks have shaken confidence.

First, a speculative real estate boom went spectacularly wrong, turning the city into the epicenter of a nationwide foreclosure crisis. The Great Recession led to massive layoffs in the hospitality industry, shattering the notion that gambling was immune to downturns. Then in 2020, the pandemic turned Las Vegas into a ghost town.

“There is this feeling of the unknown,” Ms. Irizarry said. “People are afraid. They think, ‘If this could happen that we’ve never had before, then what else could happen?'”

It is widely accepted among political actors that the fate of the 2024 presidential election could depend on economic sentiment.

In battleground states, 57 percent of registered voters identified the economy as the most important issue in an October poll conducted by The New York Times and Siena College. More than half of all respondents described the economic situation as “poor” – a key reason why President Biden trailed his presumptive Republican challenger, former President Donald J. Trump, in five of the six states.

Such signs of concern appear to be at odds with data points that clearly reflect a strengthening of the American economy. Incomes have risen, unemployment remains low and consumer confidence is improving. Recession fears have given way to cheers over economic growth, which was 3.3 percent in the last three months of 2023. And the Super Bowl, taking place in Las Vegas for the first time on Sunday, will provide a short-term boost of up to $700 million to the local economy.

Yet a sense of uncertainty has seeped into the crevices of everyday experience. That feeling is particularly noticeable in Nevada, a state that relies on a single industry for about a quarter of its jobs — casino resorts and hospitality.

In Nevada, 59 percent of respondents described the economy as “poor,” the highest rate among the six states. Seventeen percent of registered Democrats said they would vote for Mr. Trump.

The state’s unemployment rate has fallen sharply, reaching 5.4 percent in November – a fraction of the 31 percent in April 2020 – although it is still higher than any other state. Wages have increased, particularly for more than 40,000 leisure and hospitality workers represented by two local unions. The inflation rate for a number of consumer goods has slowed significantly.

However, these numbers ignore the key sources of distress occurring across the country and even the world, whose origins are not limited to the four-year windows traditionally used to assess presidential administrations.

While prices for many goods have stopped rising, they are still higher than before the pandemic, especially for critical items like gas, groceries and rent.

Higher interest rates — the result of the Federal Reserve tightening credit to curb inflation — have increased credit card charges on balances. They have multiplied mortgage payments for homeowners, whose interest payments fluctuate at higher interest rates.

Of particular concern in Nevada is the realization that it could take years for potentially lucrative activities like advanced manufacturing to create significant numbers of jobs.

For decades, Nevada leaders have sought to reduce the state’s reliance on casinos and tourism. Las Vegas is quickly filling up with warehouses as the metropolitan area becomes a hub for product distribution. Projects focused on the green energy transition are creating good-paying jobs, particularly near Reno.

Nonetheless, Nevada remains heavily dependent on the willingness of people around the world to fly in, pack into resorts and convention centers and spread their money around casinos, restaurants and entertainment venues. As a result, the company is exposed to sudden blows of fate. What makes people nervous.

“We are still very vulnerable to another recession,” said Andrew Woods, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas. “If the U.S. economy decides to go off the deep end, we will be no more resilient than before.”

Much of the discontent in Nevada, as in the rest of the country, stems from the high cost of everyday items and housing.

Antonio Muñoz, a former police officer, owns 911 Taco Bar, a restaurant in a food court near the Strip. He complains that the price of chicken has risen from $1.20 pre-pandemic to $3.50 a pound. A five-gallon jug of cooking oil has risen from $25 to $60. He was forced to raise wages to keep his five full-time employees.

Much of his business is dedicated to catering. Major events have come back strongly, he said. The annual Consumer Electronics Show in early January led to a surge in orders for rib-eye and shrimp tacos as tech companies hosted visitors in private suites. He was preparing for the Super Bowl.

But smaller bookings – particularly birthday parties – fell by a fifth last year compared to 2022. He blames Russia’s ongoing war in Ukraine, conflict in the Middle East and acrimony over the American election for leaving people on edge and strapped for cash.

He fears the worry itself could collapse the economy.

“I feel like it’s fluctuating,” Mr. Muñoz said. “People seem to be waiting to see what happens.”

A group celebrates tremendous success. Tens of thousands of people represented by the Culinary Workers Union Local 226 and Bartenders Union Local 165 have threatened a strike and pushed through a contract agreement that calls for wage increases of 32 percent over the next five years.

Union workers played a crucial role in turning out voters for Mr. Biden four years ago, and their higher pay could motivate them to repeat that effort. And given the importance of their wages in boosting local spending, the new contracts are themselves a source of economic dynamism.

Kimberly Dopler has worked as a cocktail waitress at Wynn’s Las Vegas for almost 20 years. The job is physically demanding and fraught with the pitfalls of caring for clients who are “drinking and gambling and not in the right frame of mind,” she said. Nevertheless, it manages these risks to ensure the resulting security.

“I can go home every day with money in my pocket, take off my shoes and relax,” she said.

The union contract has reinforced their sense that the economy is strong. “I see a lot of new hires at my workplace, at hiring events around the city,” Ms. Dopler said. “I feel like people in this city have a good chance of finding work.”

Raymond Lujan, 61, a union steward and waiter at Edge Steakhouse, a restaurant in Westgate Las Vegas, was born and raised in the city. His mother worked as a cocktail waitress at Stardust. His brother is a doorman at the Bellagio.

Before the pandemic, Mr. Lujan was never unemployed. When the restaurant where he worked closed, he dipped into his savings, but many of his colleagues live from check to check.

He remains confident that the future of hospitality will be the focus.

“This is Vegas,” he said. “It’s still the destination capital of the world.”

But for working people who lack the protection of a union, Las Vegas remains something else: an economy subject to wild fluctuations.

Before the pandemic, 51-year-old Carlos Arias earned more than $2,000 a week as an Uber driver. When the casinos closed, he found work as a cook – first at Denny’s for $13.75 an hour, then at IHOP for 50 cents more.

Suddenly, Mr. Arias and his partner, a manager at McDonald’s, were earning only a quarter of their previous income and struggling to pay the $1,100 monthly rent for their one-bedroom apartment. They tapped credit cards to keep gas in their car. They limit their grocery shopping to essentials like rice, beans and instant ramen.

They fell behind on payments on their Cadillac van. One morning it disappeared and was confiscated.

He found a new job as a cook at a Mexican restaurant for an extra dollar an hour, and then a second job at a restaurant at the Ellis Island Casino. For a year, he worked in both positions, rising at 4 a.m. for the morning shift and sometimes not returning home until after midnight.

He felt dizzy and his vision blurred. He couldn’t tell if he was sick or just exhausted, and he had no health insurance. When he almost collapsed, he went to the hospital and was diagnosed with diabetes. The drug the doctor prescribed cost more than $50 for a 30-day course – more than he could afford.

Early last year, he took a job at a restaurant at the Mandalay Bay Resort and Casino for $19 an hour.

On paper, Mr. Arias presents an example of an improving economy. He earns more than he did during the worst of the pandemic. He has health insurance and takes medication for his diabetes.

But he’s making less than half of what he was making before the breakup began.

“It’s still hard,” he said. “You go to the store and buy $100 worth of groceries and there’s nothing in the car.”

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2024-02-05 19:35:12