Why are Americans wary when 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, oversees a cafe at the Orleans Hotel and Casino, a property near the Las Vegas Strip that caters primarily to locals. Guests have returned and are filling the blackjack and roulette tables amid the cacophony of ringing slot machines – the sound of money.
She started in the hospitality industry as a bus driver when she was only 16. Her salary allowed her to buy a house, raise three children and buy each of them their first car. But as she ponders the future, she can't shake a sense of foreboding.
The views of people like Ms. Irizarry could be crucial in determining who occupies the White House. Nevada is one of six battleground states likely to determine the outcome of November's presidential election. Its economic hub, Las Vegas, was built on dreams of easy money. That proved a winning proposition for generations of working people, generating middle-class paychecks for bartenders, restaurant servers, casino dealers and maids. Yet a series of shocks have undermined confidence over the past two decades.
First, a speculative real estate boom backfired spectacularly, leaving the city the epicenter of a national foreclosure crisis. The Great Recession caused major layoffs in the hospitality industry, destroying the idea that gambling was immune to recessions. In 2020, the pandemic turned Las Vegas into a ghost town.
“There is that sense of the unknown,” Ms. Irizarry said. “People are afraid. They think, 'If this could happen, which we've never experienced before, what else could happen?'
That the fate of the 2024 presidential election could depend on economic sentiments is widely taken as a given among political actors.
In battleground states, 57 percent of registered voters named the economy as the most important issue in a poll conducted in October by The New York Times and Siena College. More than half of all respondents described economic conditions as “bad” — a key reason President Biden trailed his presumptive Republican challenger, former President Donald J. Trump, in five of six states.
Such signals of concern appear to run counter to data points that reflect an unequivocal strengthening of the U.S. economy. Incomes have risen, unemployment remains low and consumer confidence is improving. Fears of a recession have given way to elation over economic growth, which reached 3.3 percent in the last three months of 2023. And the Super Bowl, which comes to Las Vegas for the first time on Sunday, will receive a boost in the short term as much as $700 million to the local economy.
Yet a sense of insecurity has seeped into the crevices of everyday experience. This sentiment is especially palpable in Nevada, a state that relies on a single industry — casino resorts and the hospitality industry — for roughly 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 claimed they planned to vote for Trump.
The state's unemployment rate has fallen sharply, hitting 5.4 percent in November — a fraction of the 31 percent in April 2020 — even as it remains higher than any other state. Wages have risen, especially for the more than 40,000 workers in the leisure and hospitality sector, represented by a few local unions. The rate of inflation for a range of consumer goods has slowed significantly.
But these figures leave out major sources of distress that are happening across the country and even globally, and whose origins are not limited to the four-year period commonly used to assess presidential administrations.
While prices for many goods have stopped rising, they remain higher than before the pandemic, especially for crucial items like gasoline, groceries and rent.
Higher interest rates – the result of the Federal Reserve tightening credit to keep inflation in check – have increased credit card costs for those carrying balances. They have multiplied mortgage payments for homeowners, whose interest payments move with broader interest rates.
Of particular importance in Nevada is the recognition that potentially lucrative pursuits such as advanced manufacturing can take years to create significant numbers of jobs.
For decades, Nevada leaders have tried to reduce the state's dependence on casinos and tourism. Las Vegas is rapidly filling with warehouses as the metropolitan area emerges as a hub for product distribution. Companies focused on the green energy transition are generating high-paying jobs, especially in the Reno area.
Nevertheless, Nevada remains heavily dependent on the willingness of people around the world to fly there, move into their resorts and convention centers and spread their dollars among casinos, restaurants and entertainment venues. Which makes the company subject to abrupt changes of fortune. 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 US economy decides to go off the deep end, we will be no more resilient than before.”
The stresses of high prices
Much of the misfortune in Nevada, as in the rest of the country, has to do with the high costs of everyday items and housing.
Antonio Muñoz, a former police officer, owns 911 Taco Bar, a restaurant tucked into a food court near the Strip. He laments that the price of chicken has risen from $1.20 before the pandemic to $3.50 per 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 work. Major events have come back with force, he said. The annual Consumer Electronics Show in early January saw a surge in orders for ribeye and shrimp tacos as tech companies hosted visitors in private suites. He was getting ready for the Super Bowl.
But smaller bookings – especially birthday parties – fell by a fifth last year compared to 2022. He blames Russia's ongoing war in Ukraine, the conflict in the Middle East and bitterness over the US election for making people nervous and tight have made in cash.
He fears that the worries themselves could bring down the economy.
“I feel like it's teetering,” Mr. Muñoz said. “People seem to be waiting to see what happens.”
More pay, greater safety
One group is celebrating powerful gains. After threatening to strike, tens of thousands of people represented by the Culinary Workers Union Local 226 and Bartenders Union Local 165 have agreed to a contract settlement that includes a 32 percent wage increase over the next five years.
Union workers played a crucial role in voting for 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 themselves are a source of economic vibrancy.
Kimberly Dopler has worked as a cocktail waitress at Wynn's Las Vegas for almost twenty years. The work is physically exhausting and fraught with the pitfalls of dealing with clients who are “drinking and gambling and not in the right frame of mind,” she said. Yet she navigates those risks for resulting safety.
“I go home every day with money in my pocket, and I can take off my shoes and relax,” she said.
The union contract has strengthened her sense that the economy is strong. “I'm seeing a lot of hiring at my work, with events happening all over 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 the 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 had never been out of work. When the restaurant where he worked closed, he tapped into savings, but many of his colleagues are living from check to check.
He remains confident in a future in which the catering industry is central.
“This is Vegas,” he said. “It's still the destination capital of the world.”
'It's still difficult'
But for working people lacking the protection of a union, Las Vegas remains something else: an economy subject to wild swings.
Before the pandemic, Carlos Arias, 51, made more than $2,000 a week as an Uber driver. When the casinos closed their doors, 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 manger at a McDonald's, were making only a quarter of his 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 cars. They limited groceries to basic necessities such as rice, beans and instant ramen.
They fell behind on payments for their Cadillac van. One morning it was gone and confiscated.
He found a new job as a cook at a Mexican restaurant for an extra $1 an hour, and then a second job at a diner at the Ellis Island casino. He worked in both positions for a year, getting up at 4 a.m. for the early shift and sometimes not getting home until after midnight.
He felt dizzy and his vision became blurry. 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 handle.
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 during the worst pandemic. He has health insurance and takes medication for his diabetes.
But he makes less than half of what he did before the unraveling 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.”