NV’s ‘weird paradox’ – highest job growth, but highest unemployment
“This is the first month since the pandemic that the leisure and hospitality industry, and therefore every major industrial sector, has gotten up to having more jobs than prior to the pandemic,” said DETR's David Schmidt. (Photo: Ronda Churchill/Nevada Current)
Every Nevada county has an unemployment rate higher than the national average, but some counties are hurting more than others.
Ongoing recovery from the covid pandemic and increases in short-term unemployment are contributing to Nevada having the highest unemployment rate in the nation, a state economist says.
Nevada’s seasonally adjusted unemployment rate in July was 5.3%, according to the state’s Department of Employment, Training and Rehabilitation. That’s a .1% drop from June.
Though a stark decrease from the nearly 30% rate, the highest in the country, at the beginning of the shutdown in March 2020, the state’s unemployment rate remains higher than the nationwide rate of 3.5%.
Recent data also showed that Nye County has the highest unemployment rate within Nevada at 7.2%, followed by Lyon County at 6.3%. Both counties neighbor the state’s urban counties.
Clark County has a 6.1% unemployment rate; Washoe County is at 4.4%.
Though Nye has the highest rate among the counties, David Schmidt, the chief economist with DETR, said North Las Vegas is the city with the highest unemployment.
“North Las Vegas is sitting at 7.3%,” he said, “but North Las Vegas is part of the broader Clark County area so gets rolled up into the same average.”
White Pine County has the lowest unemployment in the state at 3.8%.
Clark had seen the highest rate since the start of the pandemic but in the last few months it flipped to Nye and Lyon counties. Similar patterns were seen in the Great Recession, said Schmidt.
“One of the trends, if you look at the data following the Great Recession, is as the housing bust hit and different counties were affected, basically for the entire recovery either Nye County or Lyon County had the state’s highest unemployment rate,” he said.
Prior to the housing market crisis of the early 2010s, those counties were seeing more development and investment targeting people priced out of the housing market in the Las Vegas and Reno areas.
“Then the housing crash happened and those areas (Nye and Lyon) got hit a lot harder than other areas of the state so they had that higher unemployment rate,” Schmidt said. “Now, we are seeing Nye and Lyon moving back to the higher unemployment rate as we’ve seen more of the ongoing recovery hit the urban areas.”
‘Number one by a lot’ at pandemic’s start
Overall, the state’s long-term unemployment, or people who have been without a job more than 26 weeks, is significantly down, Schmidt said.
He points to an increase in short-term unemployment from people entering or reentering the labor market as contributing to the state’s high unemployment rate.
“If we were like other states and kind of flat in those levels, our unemployment rate would be roughly 1 percentage point lower than where it is,” he said. “That would not make us in the middle of the pack. We would still be pretty high compared to other states, but we wouldn’t be solidly number one like we are now.”
Short-term unemployment, he added, is typically higher in the summer months when people are graduating high school and college and entering the job market.
Nevada had a significantly higher unemployment rate at the start of the pandemic. That also factors into its current rate being higher than every other state.
“Our unemployment shot up over 30%, and the second highest state had an unemployment rate of 22%,” Schimdt said. Nevada wasn’t “just number one by a little but number one by a lot. It was the highest unemployment for any state, any month going back to 1976 when the record started.”
Despite having the highest unemployment rate, Schmidt said the state has seen large labor growth. He called it a “weird paradox” to have the highest unemployment rate and “the fastest employment growth in the country.”
“This is the first month since the pandemic that the leisure and hospitality industry, and therefore every major industrial sector, has gotten up to having more jobs than prior to the pandemic,” he said.
Schmidt also said seasonal factors contribute to the fluctuation in numbers.
“Typically in July, we see drops in employment and spikes of unemployment due to the regular season activity of schools closing for the summer,” he said. “If you have an area where you might have a larger concentration of the population having school district type employment like you might see in a residential area then the impact of that seasonal swing would be higher in those more residential areas than you would see in the urban areas of the state.”
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