In a recent update on Nevada's employment scenario, Chief Economist David Schmidt from the Nevada Department of Employment, Training, and Rehabilitation (DETR) offered a comprehensive overview of the state's remarkable recovery post-COVID. Nevada has recovered all lost jobs and sustained an impressive growth rate of approximately 4.2%, consistently ranking as one of the nation’s top states for job growth.
Despite this positive trend, Schmidt highlighted a distinctive challenge. Nevada currently holds the nation's highest unemployment rate at 5.4%. This unusual situation, characterized by a high job growth rate alongside the country’s highest unemployment rate, is accompanied by relatively lower wage growth, currently at 1.3% annually over the last three months. Nevada’s wage growth ranks the third lowest nationwide. “Because our unemployment is higher, we see less wage growth.”
He explained that 5% unemployment would be considered full employment, more technically considered the “Non-Accelerating-Inflation Rate of Unemployment,” or NAIRU. “It's more of a balanced unemployment rate, where lower rates of unemployment will tend to accelerate wage rates and inflation. The 5% rate is not a precise number, but a rough benchmark for what this rate would be.”
This means a certain percentage of the state’s population is unemployed by choice rather than necessity. Nevada does not have a high unemployment rate due to job losses. Most of Nevada’s unemployment results from people entering or reentering the workforce.
This creates a more complex picture of the labor market, where individuals actively seek employment, contributing to the higher unemployment rate. “The challenge for Nevada lies in achieving consistent wage gains without triggering inflation.”
Schmidt also provided insights into the labor pool analyzed by DETR, including those working part-time but seeking full-time employment and individuals outside the labor force expressing a desire for a job. About 30,000 part-time workers in Nevada are searching for full-time work who cannot find it.
Another unique consideration in Nevada is the impact of an aging population, particularly the baby boomer generation moving into retirement, and a portion of the aging workforce only wants to work part-time. Schmidt reported that despite this, there is also an influx of younger workers entering their prime working years, mostly aged 25-35, shifting the demographics of the state’s workforce.
Churchill County is unique because less traditional jobs are often available at NAS Fallon, and the demand for positions like aircraft mechanics is growing. The county has also seen a decline in positions in specific industries like real estate, finance, insurance, even food services, and accommodation.
Nevada faces challenges when it comes to attracting and retaining employers. However, Churchill County faces an even greater challenge due to the housing shortage. Until adequate housing exists, the county will struggle to attract companies that can offer more competitive wages.
In 2024, Schmidt stated, “Projections indicate a continued but moderated growth in Nevada's employment sector.” While careful to note the unpredictability of the future and that these numbers are projections based on current data, he anticipates a gradual slowdown in employment growth as the pool of available workers tightens. Schmidt remarked, “While the state has successfully recovered to 4.2% job levels since the pandemic's onset, a more cautious approach is expected in the coming years.”
Foreseeing the tight labor market and declining unemployment rate, Schmidt believes there will be growing competition for workers in Nevada. As the state strives to return to pre-pandemic employment conditions, an increased need for skilled workers is expected to drive wage growth, with projections suggesting an increase from 1.3% to around 2.5% by 2024.
Long-term factors also affect employment, with population trends, lower birth rates, and housing costs identified as challenges that could impact the state's economic expansion. Slower population growth may have implications for various industries, prompting a need for strategic planning.
Industry growth beyond the gaming and hospitality sector appears to be a gradual positive trend contributing to the state’s overall economic recovery, suggested Schmidt. The state would see much-needed wage gains and economic stability if Nevada could attract more companies in higher-paid industries, such as technology and healthcare.
Aside from the employment data provided, Schmidt reported that DETR will launch a new Unemployment Insurance (UI) system in February that will significantly improve the efficiency of unemployment services for employers. Later, they plan to improve that section of the website to meet the needs of job seekers and unemployment claimants.
Another challenge was addressed, as Schmidt explained how DETR compiles data for the state. Capturing self-employment and contract labor in employment statistics largely relies on surveys of Nevada households. They constantly work to improve data accuracy but are confined to the data they can obtain.
As Nevada continues its recovery into 2024, DETR plans to deliver factual and data-driven information and provide top-notch job-related services to residents.
If you need assistance finding a job, building a resume, getting job training, or obtaining needed items once hired, like work boots, a gaming card, etc., contact Fallon’s EmployNV at (775) 423-5115.
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