“Overall, Nevada’s job market has been performing at a relatively strong pace post-pandemic,” said Brian Gordon, principal, Applied Analysis. “The state continues to be near or at the top of the list in terms of overall growth performance nationwide. At the same time, Nevada has ranked atop the list in terms of the overall unemployment rate. So, Nevada is faced with this unique circumstance of leading the nation in jobs gains but also at the rate of unemployment.”
There’s a reason for the seeming dichotomy. Nevada was one of the hardest hit economies during the COVID pandemic. As the economy continues to recover from the disruption of the pandemic, the state has made great strides in recovering workforce and lowering unemployment. Concurrently, the state has more people entering the labor force which results in an unemployment rate greater than nearly every other state in the nation.
“Nevada has the highest unemployment rate, in part, because we had such a high unemployment rate during the pandemic,” said David Schmidt, chief economist, Department of Employment Training and Rehabilitation (DETR). “No other state was anywhere close to where we were, and no other state has seen as big a drop in their unemployment rate. Because the second highest state had 22 percent unemployment. Our unemployment rate has come down 25 percent since the height of the pandemic.” The rate in June was 5.4 percent.
“The fact that more people are entering the workforce is a positive sign that there’s strength in the overall economy, and people see economic opportunities here,” said Gordon.
“This is a really unique time in workforce development,” said Lisa Levine, executive director, Governor’s Office of Workforce Innovation (GOWINN). “The pandemic was a disruptor. In Nevada we had one of the lowest labor force participation rates in the country coming out of COVID and the shutdown, right after we had some of the highest unemployment rates in the country.”
At the same time, enrollment numbers in higher-education institutions were down nationwide, lower even than pre-pandemic numbers. “The question is, where is the underserved population? Where is the unemployed population? And how do we get them back to being engaged in a workforce training program, an educational program, a work-based learning program, or just back into the employment sector, period,” said Levine.
The statewide efforts at diversifying Nevada’s economy can only happen with a skilled, trained workforce ready to go for new industries.
A Tale of Two Markets
Northern Nevada began diversifying its local economy over the past decade. “Northern Nevada performed relatively well during the height of the pandemic and beyond, given its more diversified employment base and increased focus on other industries including manufacturing and mining and other areas that have proven to be critical during times of uncertainty,” said Gordon.
Southern Nevada has made strides in diversification over the last three years. “For a long time we were based on mostly hospitality and we were accustomed to producing a workforce to meet those demands,” said Jaime Cruz, executive director, Workforce Connections. “We were very good at producing that workforce. Over the past decade, though, there’s been a really keen effort in diversifying our economic base. Whether at state or regional levels, there’s been huge efforts to grow our healthcare, IT, manufacturing, transportation and logistics, creative industries, like film and production, clean technologies and business and finance. Those are industries that require a different kind of workforce development strategy. You need a little bit more high-skilled training and hopefully that leads to high-skilled, high-wage jobs.”
The gaming and tourism, leisure and hospitality industry remains the core of Nevada’s economy, especially in southern Nevada, which has transformed itself into the entertainment capital of the world.
“When you have one industry like we have here in southern Nevada, the lodging, hospitality industry, it’s so massive that, although it’s shrunk in size in percent of the total economy over the years, it’s still a pretty massive driver of everything down here,” said John Restrepo, principal, RCG Economics.
Workforce Development and Nevada’s Job Market
A diversified economy is a more resilient economy, one that doesn’t have all its eggs in one basket. In order to be a truly resilient economy, the state needs a skilled workforce.
“You can’t build a resilient economy on the back of large numbers of unskilled, low-wage workers, and that’s something we have down here in southern Nevada,” said Restrepo. “In northern Nevada it’s a much more balanced economy in terms of the skills of the workforce. [Southern Nevada] is heading in the right direction, but workforce development is one of the most important parts of developing a truly diversified economy that’s got long term resilience, at both state and regional level.”
What “moving in the right direction” means to economists is paying attention to the importance of a skilled workforce and putting together the training programs in order to create one. In the last few years there has been a growing understanding and willingness to make the necessary public and private investments to create that skilled workforce.
Nevada’s local workforce boards work together, Nevadaworks in northern Nevada and Workforce Connections in the south, to connect their two customer bases: employers looking to fill positions, and job seekers looking for employment. Nevadaworks is a cooperative agreement with 13 counties, and Workforce Connections covers the remaining four: Lincoln, Esmeralda, Nye and Clark. Both agencies work with the Department of Employment, Training and Rehabilitation.
The local agencies provide services to job seekers with barriers to employment, which can mean individuals with disabilities, those who need a hand in finding work or homeless individuals.
“We work with employers through DETR, to identify needed skills and employer’s job postings,” said Milt Stewart, CEO, Nevadaworks. Working with employers through DETR, the local job boards identify the skills employers need and the postings they’re going to offer. “Then it’s, ‘Okay, employers, you have these openings, we have individuals that want a job, how do we upskill them? How do we give them the skills and training that they need to meet your skills needs so that we can create that talent pipeline,'” said Stewart.
Sometimes that’s easier said than done. What employers are looking for right now is people. Nationwide, companies are struggling to fill open positions. It sounds basic, like bringing job seekers and employers together is the solution. But post-pandemic, there’s a shortage of workers in most industries. One group identified by workforce boards is 16 to 24 year olds who are disconnected from the workforce. They’re out of school, but not traditionally employed. They may be working with the gig economy, taking temporary positions, or just not working.
“That’s a big opportunity for us,” said Cruz. “That’s 42,000 bodies that could be upskilled to meet the demands of employers.”
But only if it’s the right mix of employer and employee. “We want to be intentional. We still want to make sure that we’re meeting the needs of those employers and not just putting anybody with a heartbeat in front of them,” said Stewart. “We want to make sure we’re truly training them so that these individuals will be successful.”
Because X number people looking for work doesn’t equal X number of positions filled. “It’s not always a one-to-one, it just isn’t,” said Stewart. “That’s not the way it works.”
So, there are assessments and aptitude tests and, if the aptitudes and interests don’t match jobs in the market, individuals aren’t trained. There has to be a viable industry for them to be trained for.
The pandemic highlighted significant issues in the state’s workforce. “It was a hard time for everyone involved, but we came out the other end,” said Stewart. “If you took the pandemic period out and looked at the day before and the day after they almost look continuous. The effect here in northern Nevada was very limited in duration because of the diversification of the economy up here; we’re not as reliant on some of the industries and occupations [southern Nevada] is reliant on, and it is quite a struggle to find job seekers here to fill the need.” That is a better problem than not enough jobs, though it does limit growth for some companies.
A year ago, there were a significant number of people who had lost their jobs and therefore had recent work experience. But there’s been an increase in the number of individuals reentering the labor market after time away, and new entrants without experience. This could potentially affect employers depending on the mix of skills, experience and education they’re looking for.
Southern Nevada has more jobs than people seeking them. “That keeps our unemployment rate probably a little higher than other areas,” said Cruz. “It’s because our economy rebounds so quickly we still have employers dying for employees.”
In an attempt to help employers fill future positions in specific industries, workforce boards work with school districts, trying to guide students toward those industries.
“Workforce development doesn’t start on a college campus or even at a training provider,” said Levine. “It starts in K-12.”
It may not lead to college, either. There are many certificate programs that allow high school students to graduate into careers, and most certifications are stackable. If it’s the right career path, individuals can earn more advanced degrees.
“People want purpose. They want to know what the career path is. They want to understand that there are opportunities outside just the work they’re doing today or tomorrow,” said Levine.
Workforce Trends
“We have seen steady employment growth. Employment growth over last year was 4 percent as of June. That was tied with Texas for first in the country, and we’ve been growing at a pretty steady pace ever since the first couple months into the pandemic,” said Schmidt. Nevada is more than 100,000 jobs above where it was prior to the start of the pandemic.
Most industries across the state are growing. The biggest gap in a sector compared to where it was prior to the pandemic is the hotel industry, which is still down 20,000 jobs. “On the flip side, we’ve seen a lot of growth in other industries: transportation and warehousing are the ones that have seen the most growth; they’re about 25 percent above where they were prior to the pandemic,” said Schmidt.
Professional and business services is up 6 percent over last year, and professional and technical services, a subsector, is up 8 percent. There’s strong growth in arts, entertainment and recreation. Healthcare and social assistance is up 7.7 percent, and the construction industry is up 6.8 percent over last year.
“Businesses and employees are functioning different than they were pre-pandemic, and that provides opportunity for some sectors of the economy and may provide some challenges for business owners and management in other sectors,” said Gordon. One of the biggest trends in workforce following the pandemic remains the move to remote and hybrid work.
New industries also drive workforce development trends. Nevada is poised to become a national leader in clean energy with the lithium loop that starts with mining the rare earth metal and ends with it becoming batteries in the Tesla gigafactory. Medical technology and the healthcare industry are expanding into Nevada, requiring a skilled, trained workforce.
The need for trained people to work in the technology sector pre-dates the pandemic. There’s a need for STEM (science, technology, engineering, math) professionals, for engineering technologists conversant in all the different technology occupations. Skills acquired for STEM careers are generally transferable.
Trending Workforces
Business was moving in the technology and AI realms even before the pandemic. COVID just accelerated the process, especially in cases where technology didn’t actually step up and keep businesses going during the lockdown. Disruptive economic events, like COVID and the Great Recession, create change in economies and drive innovative and technological solutions that then become standard operating procedure.
AI has been in the news much of this year, with predictions of widespread upheaval in the workforce and unemployment rising as workers lose their jobs to robots. It seems inevitable that repetitive jobs that can be handled by robots will be, it doesn’t have to be a bad thing.
“It’s how we react and how we respond and to the extent that we can be proactive about it, figure out how to be prepared for it,” said Stewart. “Workers have to recognize that some occupations are at risk and be willing to identify with that and say, ‘I need to be willing to upskill in order to put myself where, if my job does get phased out because of AI, I have other skills that I can rely on.'”
It’s not an easy conversation to have with people who don’t want to upskill or change jobs, but it is a key consideration in workforce development right now.
How AI or emerging technologies affects the job market depends on who you’re talking to and what they might do, said Schmidt. “Whenever there are new tools, new skills, new things that people can learn, there is the potential for some disruption in tasks that can be replaced. But I think that what we tend to see more often is that tools provide a way for people’s productivity to be increased, for people to be able to focus on other higher value type of activities. I think it really depends on the context. I don’t think anywhere in the near term we’re going to see such broad implementation of it that there’s going to be a direct replacement of work that people do. But, it will help people to be able to do things that people do well and offload some of the work that people don’t do well on computers. There’s risks but there are also big opportunities.”
