To Reignite Its Light, Las Vegas Needs To Diversify Las Vegas has 13 percent unemployment and the country's highest foreclosure rate. But there are short-term signs of life, including Zappos' bringing 1,000 jobs downtown, and long-term potential in medicine and IT. Mayor Carolyn Goodman says that to prosper, the city needs to offer more than gaming.
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To Reignite Its Light, Las Vegas Needs To Diversify

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To Reignite Its Light, Las Vegas Needs To Diversify

To Reignite Its Light, Las Vegas Needs To Diversify

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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From missing money to missing jobs. Last week, I went to Las Vegas, one of the country's highest unemployment zones. I was interested in signs of the region's short-term recovery and its long-term prospects. One place I visited was the Las Vegas Culinary Academy, a joint labor-management project where workers are trained for hotel jobs.

JULIE SAYESTRE: How did you guys feel about the mock interviews?


SAYESTRE: Excellent. You feel much better, right?



SIEGEL: In Julie Sayestre's(ph) classroom, there were 20 middle-age trainees preparing to apply for new jobs that are very much like the old jobs they just lost. They all worked at the Sherwood Forest coffee shop at Excalibur, the medieval-themes casino hotel on the Las Vegas Strip. The coffee shop is close now, and Excalibur is opening a restaurant themed around the rock band Lynyrd Skynyrd instead. That fictional leap in time from knights in shining armor to "Sweet Home Alabama" is only a little longer than the real leap in time since Julie's students were last on the job market.

SAYESTRE: When was the last time you went for a job interview?

UNIDENTIFIED GROUP: Twenty years ago.

SAYESTRE: Twenty years ago. And that was a different world back then, right?


SAYESTRE: OK? Even 20 years ago, they didn't have email or Internet, OK.

UNIDENTIFIED WOMAN #1: No, we have (unintelligible).

SIEGEL: Here's the most salient factor about the economy of Las Vegas. Unemployment is down, but it's still over 13 percent. Not too long ago, it was around 15 percent. Here's the second most salient factor about Las Vegas. It is home to the country's highest rate of foreclosure. Of course, before it epitomized the housing bust, it was the epitome of the housing boom.

ROB LANG: People were building housing for other people building housing. We were building it for the hotel workers.

SIEGEL: Rob Lang runs the Intermountain West - Brookings Institution at the University of Nevada, Las Vegas. Those jobs - building housing - gone.

LANG: And that's the biggest share of unemployment. It's 100,000 displaced workers in that industry across the state, the majority being in Las Vegas. And in gaming, by contrast, you know, we bottomed in '09. There's 16,000 jobs added. And, of course, the gaming operations outside of Las Vegas - in China, in Singapore - are booming, and that wealth is accruing to the management of those firms.

SIEGEL: So the real hurt is in construction. Even so, there are silver linings to that cloud. You can see them in every cul-de-sac.


TERRI MONROE: It smells like new carpet.

SIEGEL: If you happen to be looking for a second home - or like Richard Smith of Altus, Oklahoma, you're about to retire and move - then real estate agents like Terri Monroe, in suburban Henderson, Nevada, have no shortage of houses to show you. Like this one, 2,100 feet, modern kitchen, huge garage.

MONROE: They're asking 219.

SMITH: Two-hundred nineteen?

MONROE: Mm-hmm.

SIEGEL: Thousand dollars for a...

MONROE: Right.

SIEGEL: ...over 2000 feet, a three-car garage.

MONROE: A three-car garage. It comes out to $103 a square foot.

SIEGEL: What's the history of a house like this? What would it have sold for?

MONROE: In 2005, it would have sold for 450 to 500,000.

SIEGEL: Lost more than half of its value, you figure...

MONROE: Lost more than half of its value.

SIEGEL: ...since that time.

MONROE: Definitely.

SIEGEL: Terri Monroe says the real estate market is looking up, slightly. But no one expects construction to return to what it was: 12 percent of the state's economy, the second biggest local industry. Of course, there is no question about what's number one: gaming. And if people elsewhere praise the job-creating powers of small business, in Las Vegas, big business, big hotel owners, historically drive the economy. Carolyn Goodman, the mayor of Las Vegas, cites a common rule of thumb, the ratio of population growth to increases in the number of hotel rooms: 6-to-1.

MAYOR CAROLYN GOODMAN LAS VEGAS: Our community will grow by that number, whether it's specifically, you know, for the upkeep of the room, but then we have a cleaner, and we have a market, and we have a dentist, and we have - all that growth will continue, that we get moving into our city during the high growth period for every room that was built. This was an early on formula.

UNIDENTIFIED WOMAN #2: Please hold the handrail firmly at all times. Next stop northbound is Harrah's-Imperial Palace Station.

SIEGEL: This is the monorail that runs around the Las Vegas casinos connecting mock-ups of Venice, Paris, New York City, Luxor, Camelot. Keep that 6-1 ratio in mind, look at all those imaginative high-rise hotels, skyscrapers in the desert, and you can feel how Las Vegas became, as it used to be, the fastest growing city in America.

UNIDENTIFIED MAN #1: This is the closest station to Forum Shops at Caesars.

SIEGEL: These days, the hotels are full, thanks to low room rates, and it's widely, if anecdotally, observed that the tourists are spending less than they used to. When tourism fell off in the recession, work on the planned new hotel casino, the Fontainebleau, stopped, and then a mainstay of the Strip since 1952 closed its doors.

UNIDENTIFIED MAN #2: Please note the Sahara Hotel and Casino closed to the public on May 16, 2011. The Sahara Station will remain accessible via escalators, elevators and stairs at street level on Sahara Avenue and Paradise Road.

SIEGEL: The Sahara employed 1,050 people. And with over 1,700 rooms, apply Mayor Goodman's 6-1 ratio, and you can see that the Sahara's end was very bad news indeed, which raises the question, shouldn't this metropolitan area of 2 million start diversifying its economy? Mayor Carolyn Goodman says yes.

VEGAS: We definitely want to attract the businesses into this state and the different industries. I see IT is incredibly important and programming, and people up in the Silicon Valley need to be coming down here because the weather is perfect. It's the ease of everything here.


SIEGEL: The city of Las Vegas is home to just under 600,000 of the area's residents, But it has managed to keep alive a kind of local public works program flying in the teeth of the downturn. A symphony hall, the Smith Center, is going to open next year. That's something this showbiz capital never had and its construction has provided more than 3,000 skilled jobs.

There's also going to be a new city hall. The old one, where Mayor Goodman's husband Oscar held office for 12 years is going to become headquarters for the online retailer, which is planning to employ 1,000 people there. Zappos moved from San Francisco to suburban Henderson a few years ago and now it's moving downtown.


SIEGEL: Zach Ware of Zappos met me at an offbeat cafe-cum-art gallery and lending library called The Beat, where there's a collection of vinyl albums that the customers can play on an old fashioned turntable. Ware says Zappos's anti-hierarchical informal ways fit well with Las Vegas and he said there's a real advantage for a business that runs 24/7 to be in the city that never sleeps.

ZACH WARE: That's what's so nice about Las Vegas is, you know, we see it as this really vibrant, rich community that also happens to have this 24-hour infrastructure, not only because of the Strip directly and the tourists that are there, but because of the people that work there. They work three full shifts and they need to eat at 4:00 in the morning, not because they've been out all night, but because they're getting up or finishing work.

SIEGEL: Rob Lang of Brookings Intermountain West says the Las Vegas area has some other natural opportunities to diversify. For one thing, he says, so many people in the area still have lives in southern California or elsewhere that they tend to do some things back home, like seeing the doctor or going to the hospital. In the rush to build so many casinos so fast, the region didn't grow normally.

LANG: We have only about 60 to 65 percent of the predicted medicine we should have. Backfilling medicine for the next 10 years would add 10, 20,000 jobs in that sector alone. It's labor-intensive. It's decently high pay, so there is prospects of diversifying the economy by just right-sizing the rest of the economy to what would be predicted for two million residents.

SIEGEL: And there are some big Internet businesses nearby, including much of what we call the cloud, as in cloud computing.

But there's a problem for Las Vegas as it looks ahead. For decades, it was the city where a high school education and a will to work could get you a good job making beds, serving drinks, parking cars, a job with union benefits. You could buy a home and a piece of the American dream. It wasn't about education.

More sophisticated businesses will need a better educated workforce. They'll also need the amenities to attract professionals, amenities like very good schools that the area is lacking. But Rob Lang of the University of Nevada, Las Vegas is hopeful about the long term.

LANG: We're advantaged by having relatively low cost housing, relatively low cost industrial space. This has happened before. Go check in with the cities that were left for dead at the end of the S&L crisis. They were Dallas, Phoenix, Denver. Shut out the lights, they said.

SIEGEL: In Las Vegas, where there's a museum devoted to neon signs, people figure the lights will shine for some time.

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