By Katie Ann McCarver, Vegas Inc, June 12, 2023
Though a recent report shows Nevada leading the country in unemployment rate, experts say the statistic isn’t so simple.
Nevada had the highest unemployment rate nationwide in April, at 5.4%, according to the U.S. Bureau of Labor Statistics. Nevertheless, it also saw the largest percent increase in employment, at 4.2%.
“We sort of naturally think unemployment is a bad number—if there is more unemployment, that it equals more badness,” said David Schmidt, chief economist of the Research and Analysis Bureau of the Nevada Department of Employment, Training and Rehabilitation. “I don’t think that’s necessarily always the case.”
Nevada saw employment and unemployment increase simultaneously, Schmidt said, which means the latter is not the result of people losing work.
“We have this kind of weird distinction where we have the highest unemployment rate and the fastest job growth rate,” he said. “So part of the answer to that is, these are two different surveys.”
Nevada’s rapid employment growth—despite its unemployment rate being well above the national average of 3.4%—could indicate that data from one survey is collected more slowly, and defines employment differently than the other.
For example, a survey of households might differ from a survey of employers, because it can record self-employed individuals, said Stephen Miller, UNLV professor of economics and director of research at the Center for Business and Economic Research.
Miller emphasized that seemingly contradictory unemployment and job growth rates are not abnormal, and in fact the bigger story might be a shortage of labor. There are many more open jobs than people looking for work, he said.
“That’s a very unusual situation in the labor market that came as a result of the pandemic,” Miller said.
He pointed to a phenomenon called “excess savings,” in which money that people received from the government during the COVID-19 pandemic was saved instead of spent. Now, those excess savings are still available, and have given people in the labor force more time to be selective of where they work, career changes or benefit demands.
The labor market is certainly tight, Miller said, but mostly because employers are struggling to find employees.
“As a measure of labor-market tightness, workers still feel like they have a lot more control, instead of workers holding on to their jobs with the white-knuckle grip,” Schmidt said. “It’s more like employers trying to hold on to workers with that white-knuckle grip.”
Unemployment numbers could also be skewed because of transitional periods, Schmidt said, like those of people in between jobs. He cited a survey that shows more than half of job separations being the choice of a worker who quit.
“There’s been a lot of workers saying, ‘Hey, I have the opportunity to leave,’ ” Schmidt said. “It might be they’re leaving to take another job. … For whatever reason, they feel comfortable enough in their personal circumstances that they are OK walking off the job.”
Transitional periods not well-reflected in unemployment rates could also include people moving in and out of the state, he said, noting that Nevada has seen larger population growth than many states with lower unemployment rates.
“I don’t think it’s necessarily the case that we’ve seen lots of people losing their jobs and being separated from employment,” Schmidt said. “I think it’s more people coming back into the labor force and people coming to Nevada, looking for work and looking for opportunities.”
Aubrie Jones, owner of HADCO Staffing Solutions, said the Henderson-based company hasn’t had any trouble finding workers for conventions and special events in Las Vegas.
Nevada’s unemployment rate surprised her, Jones said, because Las Vegas and its opportunities are growing so rapidly. Many people in the city, however, might choose to work in temporary positions like bartending or security, she said, because they want to retain a certain level of freedom when it comes to scheduling, or just as a form of supplemental income.
“Maybe unemployment is higher, but I also think that there’s tons of work out here,” she said. “And I think a lot of people maybe aren’t wanting to fill a lot of those positions, because they want to have that option of making the choice of where they work and when.”
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This story appeared in Las Vegas Weekly.