NNBW Editor Column: We’re No. 1! At unemployment…
Way back on March 12 (yes, I can say “way back,” because in the year 2020, the year of the coronavirus, time can no longer be measured in realistic terms), we published the following story on our website: “Nevada jobless rate hits record low.”
The state’s 3.6% unemployment rate at the time was the lowest reported in Nevada since 1976, said Dave Schmidt, chief economist for the Department of Employment, Training and Rehabilitation, and it was the first time since July 2007 that the Silver State had matched the national rate.
“With unemployment insurance claims also at historic lows, Schmidt said, the competition for the diminishing pool of workers should support rising wages and expanded job opportunities,” the story declared.
That seemingly innocuous article was our latest in a what felt like a never-ending string of monthly stories detailing the Silver State’s impressive rebound from the Great Recession.
On its face, the news was simple — we were knee-deep in the “tech-splosion” of companies relocating to Northern Nevada, and the venture by regional business leaders and economic development experts to become the next Silicon Valley was gaining sufficient steam.
Everything, in essence, was hunky-dory, peachy-keen. We were right on schedule. In a way, it was as if the story of Nevada’s thriving economy and tumbling jobless rates had, by the turn of the decade, become stale.
Admittedly, these types of articles had almost become obligatory in nature for us to publish. Basically, it went like this: DETR churns out a press release with record-setting or near-record-setting numbers; we snag some quotes from Schmidt and/or other economists; maybe pepper in some reinforcing commentary from EDAWN or GOED; and a handful of paragraphs later, we publish the latest round of positive employment news and move on with our day.
My, oh my, how times have changed.
To absolutely nobody’s surprise, the latest unemployment figures released Friday by the state of Nevada continued to paint a bleak picture for the Silver State as the COVID-19 crisis continues.
Here are some “highlights” (probably a poor choice of word use here, but I’m not sure “lowlights” does it justice, either) from Friday’s DETR reports:
- Nevada’s unemployment rate ballooned to 28.2% in April, the worst-ever jobless rate in the 156-year history of the state.
- To add insult to injury, it’s also the highest mark in all of America.
- The state lost roughly 244,800 jobs in April, which led to the unheard-of 21.3 percentage-point increase from March’s unemployment rate of 6.9%.
- April’s jobless rate is also up a whopping 24.2 percentage points compared to April 2019’s rate of just 4%.
- More jobs were lost in April 2020 than throughout the entire 2008 recession.
- Nevada’s hospitality industry, not surprisingly, has been hit the hardest. More than 122,200 leisure/hospitality jobs were lost in April alone, accounting for roughly 36% of the labor force in that sector.
- So far in 2020, DETR has recorded 480,233 initial claims for unemployment, with 458,581 of those coming in the last 10 weeks.
- The number of claims so far in 2020 is equivalent to 31% of Nevada’s workforce.
You get the picture.
“Nevada is facing record high unemployment and the sheer numbers are difficult to comprehend,” Gov. Steve Sisolak said in a Friday press release that announced some of the statistics. “… Nevada is working diligently to get people back to work as fast as possible, in a safe and responsible manner.”
In a tandem statement Friday, the aforementioned Schmidt of DETR said the numbers, “while sobering, do not come as a surprise.”
“There is no precedent for data like this, neither the magnitude of the shift nor the speed with which it has happened,” Schmidt stated, while adding: “Because this is largely driven by policy response designed to prevent the spread of COVID-19, as businesses in the state are allowed to reopen, we should expect to see a corresponding decline in the number of people unemployed as Nevadans return to work.”
That last comment is key: Slowly but surely, there will be fewer people unemployed. That much is true. But what we don’t know is what those figures will eventually become.
I find it hard to believe that as the weeks and months progress, we’ll see a corresponding decline. There’s just too much uncertainty with the virus and with how robust business operations can be this summer and beyond to be that confident in a commensurate rebound.
As I write this on the Friday before Memorial Day, we remain in Phase One of the “Nevada United: Roadmap to Recovery Plan.”
It could be days or even weeks until we get to Phase Two, let alone Phase Three — meaning some of Nevada’s most important revenue-generating businesses (i.e. casinos and bars/restaurants) will be closed, or at best operating with severely limited abilities, for an entire three months and counting.
Three months! Just imagine, an entire quarter with little to no revenue coming in. All the unemployment benefits and bailouts in the world won’t change the fact businesses small and large are being crushed by this crisis.
As Mike Bosma writes in his Covering Your Assets column this week, when you add all this up, more and more business owners are just plain tired, so it shouldn’t come as a surprise if more people decide they don’t have the capital — or, frankly, the energy — to keep their business afloat and start over.
I hope I’m wrong. But, in terms of employment, we are at levels not seen since the Great Depression. To liken it to environmental terms, consider this a 100-year flood event.
Unfortunately, I’m not convinced the waters will be receding anytime soon.
Kevin MacMillan is editor of the Northern Nevada Business Weekly. Email him at email@example.com.
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