Economy

Why are Americans wary when the economy is healthy? Look at Nevada.

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

Ms. Irizarry, 64, oversees a cafe at the Orleans Hotel and Casino, a property just off the Las Vegas Strip that caters mainly to locals. The guests returned, filling the blackjack and roulette tables amid the cacophony of clinking slot machines – the sound of money.

She started in the hospitality industry by looking for tables when she was just 16 years old. His wages allowed him to buy a house, raise three children and buy each of them their first car. But as she contemplates the future, she can’t shake a feeling of foreboding.

The opinions of people like Ms. Irizarry could be crucial in determining who occupies the White House. Nevada is one of six battleground states that could decide the outcome of November’s presidential election. Its economic centerpiece, Las Vegas, was built on the dream of easy money. It proved a winning proposition for generations of workers, generating middle-class wages for bartenders, restaurant servers, casino dealers, and housekeepers. Yet over the past two decades, a series of shocks have eroded confidence.

First, a speculative real estate bonanza went awry, turning the city into the epicenter of a national foreclosure crisis. The Great Recession forced massive layoffs across the hospitality industry, demolishing the idea that gaming was immune to downturns. Then, in 2020, the pandemic turned Las Vegas into a ghost town.

“There’s this feeling of the unknown,” Ms. Irizarry said. ” People are scared. They think, “If this could happen, which we’ve never had before, what else could happen?” »

That the fate of the 2024 presidential election could depend on economic sentiments is widely accepted among political actors.

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

Such signs of concern appear to be at odds with data that reflects an unambiguous strengthening of the U.S. economy. Incomes have increased, unemployment remains low and consumer confidence is improving. Recession fears have given way to exultation over economic growth that registered 3.3% in the final three months of 2023. And the Super Bowl, which will take place in Las Vegas for the first time on Sunday, will provide a short-term boost to economic growth. up to $700 million to the local economy.

Yet a sense of insecurity has pierced the cracks of daily experience. That feeling is particularly palpable in Nevada, a state that relies on a single industry — casinos and hospitality — for about a quarter of its jobs.

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

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

But these figures do not leave aside the main sources of distress that are manifesting across the country and even globally, and whose origins are not limited to the four-year periods usually used to evaluate presidential administrations.

Although prices for many goods have stopped rising, they remain higher than before the pandemic, especially for essentials like gasoline, groceries and rent.

Rising interest rates – the result of the Federal Reserve tightening credit to quell inflation – have increased the credit card burden for those carrying balances. They increased mortgage payments for homeowners whose interest payments fluctuate with wider rates.

Nevada is particularly concerned that potentially lucrative activities such as advanced manufacturing could take years to create a significant number of jobs.

For decades, Nevada leaders have sought to reduce the state’s reliance on casinos and tourism. Las Vegas is rapidly filling with warehouses as the metro area emerges as a hub for product distribution. Companies focused on the green energy transition are generating good-paying jobs, especially near Reno.

Nonetheless, Nevada remains heavily dependent on the willingness of people from around the world to fly in, gather at resorts and convention centers and disperse their dollars at casinos, restaurants and entertainment venues. This exposes the company to sudden changes in fortune. Which 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 American economy decides to take a nosedive, we will not be any more resilient than before. »

Much of the discontent in Nevada, as in the rest of the country, focuses on the high costs of daily goods as well as housing.

Antonio Muñoz, a former police officer, owns 911 Taco Bar, a restaurant nestled in a food court near the Strip. He laments how the price of chicken increased from $1.20 a pound to $3.50 before the pandemic. A five-gallon jar of cooking oil went from $25 to $60. He was forced to raise salaries to keep his five full-time employees.

A large part of its activity is dedicated to catering. Big events have come back in force, he said. The annual Consumer Electronics Show, held in early January, saw a surge in orders for rib-eye and shrimp tacos as technology companies hosted visitors in private suites. He was preparing for the Super Bowl.

But small bookings – particularly birthday parties – fell last year by a fifth compared to 2022. He blames the ongoing war in Ukraine, the Middle East conflict and acrimony over elections Americans to make people nervous and short of money.

He fears the worry itself could bring down the economy.

“I feel like things are faltering,” Mr. Muñoz said. “People seem to be waiting to see what happens. »

One group celebrates huge gains. After threatening to strike, tens of thousands of people represented by Culinary Workers Union Local 226 and Bartenders Union Local 165 have won a contract agreement that includes 32 percent raises over the five coming years.

Union workers played a critical role in turning out Mr. Biden four years ago, and their higher pay could motivate them to repeat that effort. And given the importance of their salaries in fueling 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 work is physically exhausting and frustrated by the pitfalls of dealing with clients who are “drinking and gambling, and not in their right frame of mind,” she said. Yet it manages these risks for the resulting security.

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

The union contract has reinforced the feeling that the economy is strong. “I see a lot of hiring at my job, at hiring events all over town,” Ms. Dopler said. “I feel like people have good opportunities in this city to find 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. Her mother worked as a cocktail waitress at Stardust. His brother is a hunter at Bellagio.

Before the pandemic, Mr. Lujan had never been unemployed. When the restaurant where he worked closed, he dipped into his savings, but many of his co-workers live paycheck to paycheck.

He remains confident in a future focused on the hotel industry.

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

Yet for workers without the protection of a union, Las Vegas remains something else: an economy subject to violent fluctuations.

Before the pandemic, Carlos Arias, 51, 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 earning only a quarter of his previous income, Mr. Arias and his partner, a McDonald’s manager, struggled to pay the $1,100 monthly rent on their one-bedroom apartment. They saved their credit cards to keep gas in their car. They reduced their grocery purchases to the bare essentials like rice, beans and instant ramen.

They fell behind on their Cadillac van payments. One morning, he disappeared, seized again.

He found a new job as a cook at a Mexican restaurant for $1 more an hour, then a second job at an Ellis Island casino restaurant. For a year, he worked both jobs, getting up at 4 a.m. for the early shift and sometimes not getting home until after midnight.

He felt dizzy and his vision blurred. He couldn’t tell if he was sick or just exhausted, and he didn’t have health insurance. When he nearly collapsed, he went to the hospital and was diagnosed with diabetes. The medications prescribed by the doctor cost more than $50 for a 30-day course, more than he could manage.

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

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

But he earns less than half of what he earned before the crisis began.

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