Las Vegas

From Booms and Busts to the Future of Work

In the coming years the workforce in Las Vegas and the state of Nevada will be the most vulnerable in the United States to rapid advances in technology and automation.

The Las Vegas Workforce

A Snapshot

As of October 2018, the Las Vegas-Henderson-Paradise Metro Statistical Area (MSA) had a total workforce of just over one million, with unemployment hovering at 4.9 percent. But a disproportionate share of workers hold low-wage, low-skill jobs in the service sector, working as cashiers, gaming dealers, cleaning staff, and retail salespersons. Most of the tasks they perform are repetitive, which means their jobs are vulnerable to next-generation advances in technology and automation.

Despite attempts at diversification, in 2017 gaming and hospitality still accounted for seven of the top 10 employers.

Top 10 Employers in the Las Vegas Metropolitan Area | 2017

MGM Resorts International
53,157
Caesars Entertainment Corporation
30,000
Stations Casinos LLC
14,000
Wynn Las Vegas
12,000
Boyd Gaming Corporation
11,700
Las Vegas Sand Corporations
8,600
The Valley Health System
7,463
McDonald’s Greater Las Vegas Operator
5,250
The Cosmopolitan of Las Vegas
5,008
Southwest Medical Associates/United Healthcare
4,808
Source: Top 10 Employers in the Las Vegas Metropolitan Area | 2017: The Las Vegas Sun

a disproportionate share of workers hold low-wage, low-skill service sector positions(…) Since their daily routine often involves repetitive tasks, at least part of their work is susceptible to rapid advances in technology and automation.

In October 2018, the median house price in Las Vegas returned to a pre-2008 financial crisis high of $300,000, but wages are not keeping up with the rising cost of living. Nearly 38 percent of Las Vegas households are “cost burdened” by housing, with the figure jumping to 57 percent for low-income households.

Housing in the Las Vegas Metropolitan Area | 2017

  Las Vegas Metropolitan Region US Average
Cost-burdened Households 38% 32%
Cost-burdened Low Income Households 57% n/a
Median Single Family Home Value 300k 216k
Median Household Income 55k 59k
Population Growth (2011 – 2016) 7.3% 3.7%
Housing in the Las Vegas Metropolitan Area | 2017: U.S. Bureau of Labor Statistics and the Las Vegas Review Journal U.S. Bureau of Labor Statistics, July 2016. Eli Segall, “Las Vegas house prices reach highest level in 11 years,” Las Vegas Review Journal, 22 October, 2018.

The Las Vegas area is home to 15 institutions of higher education, including the College of Southern Nevada and the University of Nevada, Las Vegas (UNLV). Nevada ranks ninth in the United States in job growth, with 54 percent of available jobs requiring some form of post-secondary education. However, only 30 percent of Clark County residents hold a post-secondary degree. In national comparisons, the state of Nevada ranks 46th in educational attainment and 43rd in “college readiness.”

Specific Forecasts

The workforce implications of technology and automation are notoriously difficult to forecast. While some studies envision a loss of around 73 million U.S. jobs by 2030, others predict that the introduction of new technologies such as robots and artificial intelligence will create a wave of new jobs.

65.2 percent of jobs in the Las Vegas area are potentially automatable (the highest percentage in the United States).

The impact of technology and automation in the Las Vegas area is evident in the results of recent studies. The Institute for Spatial Economic Analysis at the University of Redlands found in a 2017 study that 65.2 percent of jobs in the MSA are potentially automatable (the highest percentage in the United States). The study also shows that Las Vegas could see a 49 to 52 percent loss in wage share due to automation by 2035. More recently, the Organization for Economic Cooperation and Development (OECD) concluded that the percentage of jobs that could be eliminated by automation is higher in Nevada than in any other U.S. state. The studies found that areas with high shares of low-skill, low-income professions will face larger job losses and wage depreciation, with tasks related to administrative support, service, sales, and food preparation most vulnerable to automation.

Future of Work

In August 2018, the Bertelsmann Foundation and the National Association of Workforce Boards, in cooperation with Workforce Connections, convened nearly 70 stakeholders from Las Vegas and the state of Nevada to discuss the impact of technology and automation on the Las Vegas workforce. These conversations had three goals:

  • Identify the challenges, strengths, and needs of the workforce as it faces the implications of technology and automation;
  • Establish the baseline of a local policy discussion on how technology and automation are affecting Las Vegas;
  • Highlight future of work approaches that are relevant to the issues faced by Las Vegas and other cities.

Stakeholder Map from Las Vegas Discussions

Workforce

Challenges

Las Vegas stakeholders identified workforce challenges ranging from
recreational marijuana to quality of life. Here are the top ten challenges:

LOW-WAGE

A large itinerant workforce attracted by plentiful low-wage, low-skill work in the service sector. In Las Vegas, low-wage, low-skill jobs are sometimes preferable to more lucrative opportunities that require long-term investments in education and training.

UNDERDEVELOPED

Policymakers and business hold an underdeveloped understanding of the workforce; they prioritize connecting the unemployed with any available opportunity. In policy discussions, they neglect crucial issues in workforce development such as job quality, wages, inequality, housing, and transportation.

QUALITY OF LIFE

Quality of life: transportation is “20 years behind population and job growth,” which means that workers are often cut off from access to jobs, training programs, and education due to a lack of reliable transportation. Quality of life issues related to traffic, lack of cultural institutions, and education make it difficult to attract and retain mid and high skill workers and their families.

RETRAINING

Redeploying and retraining workers in vulnerable sectors is not a priority for many businesses undergoing large-scale technology-driven change, especially those in hospitality and retail. Employers are not given incentives to invest in skills development or apprenticeships at the low end of the labor market; this is problematic, because credentialing for soft skills and transferable skills will be key to driving the future of work.

TAXES & INCENTIVES

Policymakers and business focus on taxes, land prices, and incentive packages when it comes to attracting new industries and creating jobs. But this leads to less tax revenue to train or retrain existing workers (not to mention those who may be affected by technology and automation). Las Vegas has a hard time escaping its reputation as a low tax (and low skill) area.

COMPETITION

Competition for jobs and resources between Las Vegas and other cities in Clark County such as North Las Vegas, Paradise, and Henderson leads to a lack of focus on strategy and “big public policy” surrounding the future of work. The race to the bottom mentality regarding taxes and land (see #5 above) curtails long-term planning and workforce development.

EDUCATION

Education: Nevada’s educational institutions are built for jobs that were abundant 20 years ago. The K-12 system is not adequately training students for careers in STEM, and four-year institutions are sometimes divorced from the world of work. Seventy percent of students at the College of Southern Nevada require remedial education. Low enrollment in higher education means that employers struggle to find “right-skilled” workers. Some businesses in need of workers are frustrated by local/state bureaucracy, but this has not translated into large-scale investment in the workforce by the private sector.

VULNERABLE

Large (and growing) vulnerable populations that will also need to be integrated into the future of work:

  • • English as a second language learners/new immigrants.
  • • Workers employed in jobs that are highly vulnerable to technology and automation. There is little existing support structure for workers displaced by technology and automation (other than unemployment or disability insurance, or family).
  • • Nevada’s incarcerated population. There are many of them, and preparing them for the future of work means less recidivism, safer communities, and a higher quality of life.

DIVIDE

Demographics, class, and urban-rural divide: Las Vegas is attracting a lot of retirees, and a lot of young people looking to “make it.” While retirees may favor sunshine and low taxes, young people might prioritize education, training, and jobs. This creates class and generational rivalries that will need to be overcome. At the same time, the urban-rural divide is growing and there is a lack of job diversity. In rural Nevada, “everything is mined or grown,” and it is hard to break out of this cycle.

WILDCARD

The wildcard: legal marijuana has created business opportunities and jobs, but it has also spawned new workforce challenges. Greater access has affected service sector workers and their ability to do their current jobs; how will drug use affect our ability to think about and plan for the future?

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Workforce

Strengths

In addition to challenges, Las Vegas stakeholders identified
unique strengths and points of pride. Here are the top ten strengths:

NOTORIETY

Las Vegas is a destination that everyone has already heard of, and entertainment and conventions attract new people and ideas from around the world. Examples include the Consumer Electronics Show, openness to new technologies such as blockchain, and a budding downtown tech hub.

BOOMING

Las Vegas is booming: unemployment is low, wages are ticking up, construction cranes are everywhere, and housing has rebounded. The startup scene is expanding and Las Vegas is consistently ranked as one of the best places in the country to start a business.

LOCATION

Geographic location and regulatory environment: Las Vegas is well positioned as a hub for transportation, trucking, and warehousing. Nevada benefits from fewer taxes and less regulation than surrounding states - “we’re not California” - while sharing attributes such as a diverse population fluent in different languages and cultures.

OPPORTUNITIES

Early success in attracting next-generation advanced industries and opportunities: examples include drone development around Creech Air Force Base; autonomous vehicles (Navya’s automated shuttle near Freemont Street); Switch and its 5.2 million square foot data center.

CONVERSATIONS

Select policymakers are aware of the challenges and opportunities stemming from technology and automation, and are kicking off broad-based conversations with communities and businesses on how to make the area more competitive and resilient to change. Examples include Workforce Connections; the Las Vegas Metro Chamber of Commerce; and the Regional Transportation Commission of Southern Nevada.

NIMBLE

Nimble and action-oriented policymakers face fewer bureaucratic hurdles than in other states. Examples include:

  • • The Governor’s Office of Workforce Innovations (OWINN), which has played a key role in attracting advanced manufacturing (Tesla, Faraday Future, and Panasonic), while laying the regulatory framework to lure emerging technologies (drones, solar, blockchain).
  • • The Governor’s Office of Economic Development is working with universities to develop technology transfer programs for Las Vegas-based researchers to patent and market their research.
  • • The Regional Transportation Commission of Southern Nevada is focusing on regional planning, including initiatives to pave the way for autonomous vehicle technologies.

PREPARING

Educational institutions are preparing students and workers to reap rewards from technology and automation:

  • • The Clark County Library District operates a Teen Tech Center that combines project-based learning with new tools and technologies (animation, 3D printing, robotics, etc.)
  • • The University of Nevada, Las Vegas is constructing a 122 acre research and technology park that aspires to be a connector between business and workers navigating change brought by the future of work.
  • • UNLV and The College of Southern Nevada are working to upskill today’s workforce through new programs in hospitality and nursing.

FOCUSING

Policymakers are trying to mend the urban-rural divide by focusing on telemedicine, distance learning, and rural workforce training (but a lot more needs to be done).

DIVERSIFICATION

Economic diversification is slowly happening and workers are learning to work alongside new technologies through sector-specific initiatives:

  • • The construction industry is spending more than $1 million a year to train workers and is instituting automation, virtual reality, and geographical scanning technology on work sites (including the new Las Vegas Raiders stadium)
  • • The gaming industry is upskilling some workers by focusing on project-based learning and the development of programs in cyber and information security.
  • • The healthcare industry sees technology-driven change coming, and they are preparing students for these advances through new certifications and training.

SOLIDARITY

Youth and Community Solidarity

  • • Youth are digital natives and businesses can harness this tech-savvy to drive growth.
  • • Investments are happening to reskill displaced workers through CTE, investments from anchor employers, and the CSN-Apple partnership.
  • • The community came together in the wake of the 2017 Las Vegas shooting, and perhaps some of this energy and solidarity can carry forward into efforts to prepare and develop the workforce.
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Workforce

Needs

Stakeholders revealed needs and areas of focus going forward

BUILD

Build a sophisticated, data-driven Labor Market Information System that connects students and workers with skills forecasting data, career pathways, career coaching, and vocational/technical training programs. With this data and these tools (and additional One Stop Career Centers), citizens and policymakers will have the basic tools to “future proof” their jobs, tasks, and skills.

USE

Use the improved Labor Market Information System to target and allocate public money more efficiently. Policymakers have a duty to ensure that public money is used to equip workers with skills and jobs that are not highly automatable. Having a robust, data-driven system helps policymakers be better stewards of limited public resources, while helping to equip workers with skills and jobs that are not vulnerable to automation.

NAME

Name an authority for workers and business to call when they are facing workforce disruption caused by technology and automation. At the moment, businesses and workers are left to sort the consequences out on their own, with policymakers only stepping in once a business goes bankrupt or a worker is classified as unemployed.

STRUCTURE

Structure community development so that it prioritizes education and ties it to career exploration. Today, youth development is divorced from the world of work. Policymakers and educators could close the gap by better diagnosing aptitudes and providing coaching and mentorship.

EXPOSE

Expose Las Vegas to domestic and international approaches to the future of work. If there are areas facing similar challenges to Las Vegas, how have they developed future of work policy? Policymakers and political leaders need to know this is an issue worth caring about, so external approaches will help raise awareness and guide the development of local solutions.

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The Las Vegas Policy Puzzle

Las Vegas stakeholders emphasize the area’s “pioneering mentality,” which prizes individual responsibility and entrepreneurialism, in driving attitudes toward work, workforce development, and the future of work. Not unsurprisingly, this ethos is mirrored by political leaders and in public policy. But the consequence of this hands-off approach to the workforce has been neglect of education, training, and workforce development. This tension is exemplified by the erection of the state-of-the-art Las Vegas Raiders stadium: construction of the stadium will create 2,300 temporary jobs, but at a cost of more than $750 million in taxpayer money.

In keeping with this paradox, as the Las Vegas area vies to lay the groundwork for emerging technologies such as autonomous vehicles and blockchain, it still leans heavily on traditional incentives such as land and a low-tax, low-regulation environment to pick off opportunities from neighboring states such as California. Stakeholders point to the area’s “competitive advantages” of land, regulation, incentives, and taxes, while simultaneously sounding the alarm over a lack of focus on building a local mid and high-skill workforce.

However, there is tacit acknowledgement that the competitive “advantages” of today are not up to the challenges of driving tomorrow’s future of work. Luckily, the area’s pioneering mentality also brings openness to new technologies, which has in turn led to a buzz around their workforce implications. Las Vegas stakeholders recognize that the deck is being reshuffled, and that the time to rethink strategy is now.

In line with its entrepreneurial mindset, a core concern is how Las Vegas can position its workforce to benefit from advances in technology and automation. What types of economic activity will generate value? And how can workers in Las Vegas be equipped with the tools needed to capture a piece of the pie? There is widespread agreement that developing mid and high-skill opportunities hinges not only on creating or (or having access to) workers fluent in hard skills such as computer programming, but also in soft skills such as problem solving and foreign languages.

The space exists in Las Vegas to test innovative future of work solutions, but it is hampered by a culture of short-term investment

The other side of the chip, of course, is the area’s expanding pool of low-wage, low-skill workers, which poses long-term challenges. Stakeholders find themselves torn between making bold moves to attract next-generation opportunities, while struggling to devise inclusive policy solutions for the area’s stock of vulnerable service sector workers, who lack pathways to upgrade their skills and climb the career ladder.

The juxtaposition of present challenges and future aspirations sheds light on a wider set of policy challenges. Stakeholders disagreed vehemently when it came to prioritizing specific approaches and strategies. For example, should the focus be on upgrading the current workforce with soft skills and hard skills? Attracting industries and workers from other states? Creating jobs in sectors that will not be significantly vulnerable to automation?

Enter the political dynamics of the future of work. Las Vegas and the state of Nevada have a fluid political environment with relatively few bureaucratic hurdles, which means that the area could be fertile ground for bold approaches. But in order to double down, policymakers first need to be equipped with the skills and knowledge to respond to and develop policy. Even if there is broad recognition that technology and automation will affect the workforce, sound public policy requires strategic planning and long-term thinking. But the strategic planning that is so crucial to devising future of work solutions conflicts with the prevailing short-term attitude among local politicians and policy makers.

The space exists in Las Vegas to test innovative future of work solutions, but it is hampered by a culture that reflexively favors the short-term bet over long-term investment. With the effects of technology and automation already being felt in the Las Vegas area, policymakers have a narrow window of opportunity in which to forge a bold pathway forward.

Five Key Questions

What do you think Las Vegas should do?
Respond to these five key questions to let us know!

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Workforce

Strategies

Emerging strategies and approaches to the future of work for Las Vegas – and beyond.

POSITION

Position Las Vegas to benefit from technology and automation by focusing on strategic planning, analysis, and research. Lack of workforce planning has contributed to past booms and busts, but the cycle of destruction followed by rapid rebirth may be more difficult to repeat as jobs and tasks are affected by technology and automation. Focusing on research and policy planning will help policymakers attract employers and emerging industries that are committed to developing sustained growth and development of the workforce.

NOMINATE

Nominate someone to captain the future of work policy discussion. At the moment, there is a leadership vacuum in the policy domain. But the future of work will undermine the ability of politicians to respond to the demands of their constituents (and earn reelection). A political leader or governance authority can guide the conversation and galvanize local action that responds directly to the threats and opportunities posed by technology and automation.

COMMUNICATE

Communicate the implications of technology and automation to frontline workers. If workers are aware that their jobs and tasks will undergo drastic change or be eliminated altogether, they will be more willing to demand future of work policy solutions and seek out upskilling, training, and education.

HARNESS

Harness technology and automation to provide more (not less) investment in retraining and reskilling. For example, workers represented by Culinary Union 226 will be retrained if their tasks or jobs are automated. Las Vegas needs to ensure that new technologies lead to a virtuous cycle of retraining for higher level opportunities for groups not represented by a union.

SHIFT

Shift Las Vegas from a passive, reactive mindset regarding the workforce, to a system that is forward- looking and visionary. Las Vegas should position itself as a place that benefits from technology and automation, rather than a place standing by to be steamrolled.

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Humans

Making this possible