Economy still weighs on Nevada as Harris and Trump seek an edge

LAS VEGAS – For much of 2023, Las Vegas, the anchor of Nevada’s economy, has watched in delight as visitors have flocked to town for conventions, football games and summer pool parties, further solidifying its rebound from the doldrums after the pandemic shutdowns.

But statewide, the economy is still burdened by high unemployment and higher costs of living – twin pocketbook struggles that animate voters here in one of a handful of states expected to decide the November presidential election.

And about one-fourth of Nevada voters in a New York Times/Siena College poll in August named the economy as their top issue. It was cited nearly twice as often as any other concern, comparable with findings in other swing states.

A topic with particular resonance among Nevada workers – eliminating federal taxation on tips – burst into the national discourse after former president Donald Trump told a crowd in Las Vegas that he intended to do away with the practice if elected. He was inspired, Trump has said, by a conversation with a server in the city.

His opponent, Vice-President Kamala Harris, later endorsed the idea during a campaign stop in Las Vegas, but paired the proposal with a promise to raise the federal minimum wage.

The unemployment rate in Nevada, where nearly one-fourth of jobs are in leisure and hospitality, was 5.5 per cent in August, the highest of any state. Statewide, petrol prices hover near US$4 (S$5.20) a gallon, again among the nation’s highest.

And in Las Vegas, where the unemployment rate was 6.7 per cent in July, some residents feel squeezed by the forces of inflation and a surging housing market shaped, in part, by transplants from California and other states.

“Everything has risen,” said Ms Ana Franco, who works delivering room service at the Bellagio. “Food especially has gone way, way high.”

The employment outlook in Nevada has brightened since April 2020, when the pandemic shuttered casinos along the Strip for two months and unemployment spiked to a staggering 30 per cent. Over the past year, there was a nearly 12 per cent increase in construction jobs, according to the Bureau of Labour Statistics. Leisure and hospitality employment rose 2.4 per cent.

In June, the Las Vegas airport logged its third-busiest month in history, serving five million passengers. In 2023, about 41 million people visited the city, an increase of about 5 per cent from 2022, according to the Las Vegas Convention and Visitors Authority.

“We’ve made significant progress facilitating Nevada’s long-term economic recovery,” Governor Joe Lombardo, a Republican elected in 2022, said in a statement. But, he added: “Nevadans are still suffering acutely from national inflation.”

In August, Mr Lombardo announced the creation of the Nevada Strategic Growth Initiative, a non-profit focused on expanding and diversifying the state’s economy. The board includes a former executive of a major resort and a former labour leader.

Over the past year, rising costs have been at the centre of economic angst in the state.

Nearly 35,000 members of Culinary Workers Union Local 226 and Bartenders Union Local 165, a powerful base for Democrats, authorized a strike last autumn, but last-minute negotiations with the three major resorts – Caesars Entertainment, MGM Resorts International and Wynn Resorts – averted a walkout. By the end of the five-year contract they ultimately secured, most workers will be paid at least $35 an hour.

This summer, a major issue among workers here has aligned with a catchphrase on the campaign trail: No taxes on tips.

Mr Ted Pappageorge, head of Local 226, which has endorsed Ms Harris, said eliminating taxes on tips was a good policy only if combined with getting rid of the federal sub-minimum wage for tipped workers – $2.13 an hour.

“Ending taxes on tips for service and hospitality workers would significantly help millions of workers provide for their families, including in Nevada,” he added.

In interviews with workers and business owners in the Las Vegas area, high prices were a prominent concern. They were divided, however, about which candidate they trusted to improve the economy.

Ms Franco said she was taxed per hour on the tips she made.

“Sometimes we’re getting taxed for something we don’t make,” said Ms Franco, 51, a member of the Culinary Union who earns $17 an hour. “If you have a slow day at work, you’re still getting taxed.”

Nixing taxes on her tips, she said, would “make a world of difference”.

Ms Franco said she supported Ms Harris and did not blame the current administration for her state’s economic struggles.

“It happens all the time – every few years we go through inflation,” she added. “I feel like it was going to happen anyway. We just didn’t know when.”

Economic concerns extend to business owners, including Mr Javier Barajas, who opened a restaurant called Lindo Michoacan in 1990. He has expanded it to several locations while operating a Mexican and Italian fusion place as well – and in recent months, both President Joe Biden and Trump have visited his establishments.

Mr Barajas said overhead costs to run his businesses had tripled since 2023, as the price of groceries has increased. The servers at his restaurants make $12 an hour, the state’s minimum wage, plus tips, and hosts make $16 an hour because they do not earn tips.

“It’s very difficult,” he said. “It’s getting harder and harder for small businesses to pay our bills.”

Mr Barajas, 65, said he planned to vote for Trump, partly because “prices, everything, were just more stable five, six years ago”.

The search for financial stability is what brought Mr Antonio Gonzalez-Petett to Las Vegas.

In 2023, he moved with his wife and their young daughter from San Diego. For years, Mr Gonzalez-Petett, 37, worked in the service industry. He knew he was unlikely to ever be able to own a home in Southern California, where median prices are close to US$1 million.

Shortly after he arrived in Las Vegas, he began working at Lindo Michoacan as a bartender.

“As an immigrant, owning a home is my dream – it’s the American dream,” he said on a recent afternoon while on a break. In addition to earning $12 an hour, he makes $300 to $500 on tips each week. Only in recent months, he said, has earning enough to make a down payment on a home and cover the mortgage felt within reach.

Mr Gonzalez-Petett sees the candidacy of Ms Harris as historic, but he said inflation – his main concern in this election – took place under her leadership. He said he had not decided how to vote.

“There is so much noise,” he added. “If you make below a certain amount of money in this country, then you’re hurting financially.”

“That”, he added, “needs to be corrected”. NYTIMES