Nevada’s Roll of the Dice: Author Michael Bowers On What’s Next For The Sagebrush State

Over the years, Nevada has experienced many boom and bust cycles. The most recent chapter was in 2008 when the Great Recession pummeled the state’s housing and jobs economy. 

Today, with the COVID-pandemic in full bloom, Nevada once again has been dealt a difficult hand at the craps table. 

According to figures from the  Nevada Department of Employment, Training, and Rehabilitation economic report, March 2020 initial unemployment claims hit an all-time high -- nearly six times the previous high set in December 2008. This represented a staggering 2,125% increase compared to March 2019. 

And while Nevada’s unemployment rate fell by more than 10 percentage points from May to June, with a return of 73,000 jobs in the leisure and hospitality sector, state leaders warn of potential setbacks whenever spikes occur in the state’s COVID numbers. 

Across the nation, leisure and hospitality, a sector that comprises nearly 30 percent of Nevada’s workforce, has been the hardest hit. According to economist Jeremy Aguero, the U.S. tourism industry could witness a loss of $39 billion over the next 12 to 18 months, impacting more than 320,000 workers.

Rising Economic Fortunes Draws New Residents

In recent years, residents have flocked to the “Silver State,” drawn by the state’s housing affordability and tax-favorable lifestyle. About a third of this in-migration comes by way of California, particularly from families seeking a much lower cost-of-living. 

Nevada as a result has become one of the fastest-growing states in the nation, up about 21% since 2008, according to the U.S. Census Bureau. And job growth pre-COVID had soared for about 100 consecutive months. 

As a peripatetic wanderer, I’ve personally lived in both the Northern and Southern parts of Nevada at various junctures of my life. Most recently I spent 12-months in Las Vegas on a journalistic assignment, which was interesting, to say the least.  I have to admit that I love the state’s free-spirited nature and majestic feel of the mountains. 

Prior to COVID’s arrival, Las Vegas was on the brink of new heights of economic fortune. Blazing along at a blistering pace, the city had enjoyed years of unprecedented growth fueled by resort and home construction, jobs, and optimism.

In particular, the future of sports entertainment in the city has reached new heights with the Golden Knights of the NHL along with the much-ballyhooed arrival of the NFL’s Vegas Raiders, which features a badass, state-of-the-art stadium. There are also plans to add 12,000 new hotel rooms over the next five to six years to the city’s skyline. 

This cascade of fecundity is not just a Vegas phenomenon as there has been a ton of activity as well in the Northern part of the state.  Areas like Reno and Sparks have been a lightning rod of economic activity fueled in large part by Elon Musk’s massive Gigafactory, a producer of lithium-ion batteries —a key supply chain element for the emerging future of electric vehicles.

Will Politics Drive Nevada’s Economic Future?

According to Michael W. Bowers, professor of political science and public law at the University of Nevada, Las Vegas, and author of the book The Sagebrush State: Nevada’s History, Government, and Politics (University of Nevada Press, 2017, 5th Edition). Nevada’s economic and political environment is largely a reflection of the state’s turbulent history and harsh environment.  His book adroitly highlights the dynamics of Nevada’s political history along with how the state’s business and lifestyle culture has evolved over the years. 

Bowers says that in many ways Nevada is no different from many other states for while it was the only state for years to have legalized gambling, that began to change once Atlantic City began opening casinos, a trend which has accelerated since then.  

“Today, there are very few states that do not have some form of legalized gambling whether it be state-licensed casinos, Native American casinos, or lotteries.  In 1931 at the same time that gambling was legalized, Nevada also became a state in which one could get a "quickie" divorce with a residency requirement of only six weeks.  That too has changed as other states have liberalized their divorce laws in the time since.  Nevada does remain unique in that it is the only state to have legal prostitution, but even then that’s true only in a few rural counties (i.e., not Las Vegas or Reno) that have chosen that option.” 

Bowers goes on to note that over the last fifty years Nevada has become a much more urban state with most of its population centered in Washoe (Reno) and Clark (Las Vegas) counties.  As a result of that as well as an influx of residents coming from other states, Nevada has lost much of its individualistic, libertarian spirit. 

He says that the state was once a fairly dependable Republican state but has now become more reliably blue.  For instance, both U.S. Senators are Democrats, three out of four members of the House are Democrats, five of six state constitutional officers are Democrats, and the Democrats have a majority in both houses of the state legislature (with a supermajority in one and one vote short of a supermajority in the other).

Pandemic and Protests Impact The State

When I asked Bowers about what sorts of economic and social trends we’ll likely see in Nevada given COVID’s presence for the foreseeable future, he offered this: 

“ Obviously, COVID has hit Nevada very hard.  As a result of its reliance on tourism and hospitality, the state has lost significant amounts of revenue (at this point well over $1 billion in taxes to the state plus what will be lost by the counties, cities, and school districts).”  

He adds that after the Great Recession of 2008 the state pledged to diversify the economy and did take some steps under governors Brian Sandoval and Steve Sisolak to achieve this but laments that the state is still primarily dependent upon tourism and hospitality.  

“What this means is that in an economic downturn when people have no money when hotels, restaurants, and casinos are closed because of COVID, and/or people are fearful of virus exposure, the state is going to suffer.  Not surprisingly, Nevada has had the highest unemployment rate in the country with the arrival of the virus.” 

Now that many companies have shifted their workforces online, says Bowers,  it is possible that some parts of these businesses will continue to do so even after the pandemic has ended.  That will allow for the elimination of expenditures on leases, utilities, and the like. 

“It’s possible that this will be the wake-up call needed to further diversify the economy.  I am not particularly hopeful, however, that such diversification will happen because once the economy recovers and the hospitality industry is flying high there is likely to be yet another bout of mass amnesia.

In his book, Bowers opines: 

“As Nevada makes its way through the twenty-first century many challenges lie on the horizon. Clearly the state must diversify its economy to a greater extent than it already has. The development of manufacturing and banking centers has already occurred to some degree; more must be done. If the state’s history tells us nothing else, it surely informs us that reliance upon a single industry, whether mining or gaming is a dangerous path.” 

Bowers’ book also takes a look at the racial and cultural makeup of Nevada. What I asked him about this, he shared the following: 

“Nevada is a diverse state with large populations of Latinx, African American, Asian American, and Native American residents.  Indeed, the Clark County School District is a majority-minority district.  The Legislative leadership is African American as is the chief law enforcement officer in the state, Attorney General Aaron Ford.”   

As has been the case in many cities, he says that there have been a number of protests and demonstrations in Las Vegas and Reno tied to racial justice and that the larger public is being awakened to systemic issues faced by minorities.  

In terms of the upcoming election, I ask him for his take on where he sees Nevada falling on the political spectrum? 

“Although the six state constitutional offices and the two U.S. Senate seats are not up for election this year all four members of the House, all members of the state Assembly and half of the members of the state Senate are.  And, of course, there is the matter of the presidential election.  I believe that, like the election of 2018, Nevada will go very strongly blue.  It is highly likely that former Vice President Joe Biden will win in Nevada and that both houses of the legislature could likely see super majorities of Democrats.”

He continues: “Republicans are likely to win one of the seats in the House simply because the demographics of that district so heavily favor Republicans.  A second district is demographically skewed toward the Democrats and it is virtually impossible that they will lose it.  The third and fourth districts are more evenly divided but, if there is as I expect, a blue wave in Nevada the Democrats are likely to win those as well.” 

Bowers adds that there is no doubt that the economy and the state budget will be the biggest issues facing the state over the next year or two and are likely to suck most of the air out of the room.  Basic services such as education and health services, he says,  are likely to see serious cuts even though they are already seriously underfunded, to begin with.  

In the conclusion of this, Bowers offers a final thought: 

“Nevada is a state whose ability to prosper and continue as a land of dreams and opportunity rests in its own hands. Hard decisions -- uncomfortable decisions -- will have to be made on taxation, spending, government services, land and water use, and openness in politics. It is hoped that we will have the foresight, the skills, and the willingness to do what we must to ensure that all Nevadans enjoy the fruits of their labors and that all share equally in the liberties and opportunities available in the Sagebrush State.”