In January 2020, the national unemployment rate was 3.6. In April it was 14.7 percent, with 23 million people unemployed. Only 50 percent of the population was employed, the lowest percentage of employment since the government started publishing the statistics in 1948. In April 2020, 20 million people lost their jobs and it is estimated that nearly the same number were working part-time from home. It was an economic crisis: An economy driven by consumer spending as ours is requires people to be employed with money to spend; it also requires businesses to be open for those consumers. In April, the first full month of the shutdowns, 22 percent of the businesses in the country were closed. It was worse for casinos. By the end of April, all of the casinos in the United States were closed; the only revenue the industry produced was generated online. The impact on Nevada was among the worst in the country.
Nevada relies heavily on gaming and tourism. Gaming is 17 percent of the state’s revenue and live entertainment from gaming adds another 2 percent. Gaming is essential for funding Nevada’s government; in 2018, 39 percent of the state’s general fund came from the hospitality industry. The tax money goes to fund health and human services, education, infrastructure, public safety and government. Previous recessions have forced major cutbacks in services, but never has revenue fallen as much as it has in 2020. Gaming revenue declined by 20 or 30 percent in the Great Recession. In 2020, it stopped completely for two and half months and recovered only marginally after the casinos reopened. After 11 months, casino and tax revenues were down 35 percent. The state of Nevada needs the casino industry to be fully operational if it is to deliver on its responsibilities to its citizens. Besides the lack of tax revenues, the closing of casinos rendered hundreds of thousands of Nevadans unemployed. Nevada has 3 million citizens, so the numbers are significant. In April 2020, 429,700 people were without a job and income and in May, it was 350,800, with June at 287,300. The unemployment rate in 2020 was higher than in any other state and greater than the Great Depression.
In December, Nevada’s casinos were operating at 25 percent capacity. The capacity for other businesses was 50 percent. Public gatherings, which includes all entertainment and sporting events, were limited to 50 people, private gatherings to 10. Although it is not totally accurate, it could be said that for most of 2020, Nevada’s economy operated at 50 percent of its 2019 levels and in March, April, May and June much less.
The severely depressed economy is one side of the dilemma, one half of officials’ conflict. It cannot be dismissed out of hand. The aftermath of 2020 is likely to impact education, public services, infrastructure and government for years to come. Since 1960, numerous state-funded studies have held that Nevada is overly dependent on gaming and tourism; all of the studies have recommended a serious effort at diversification. Gaming has been a cash cow since the 1930s and was thought to be immune to recession. However, no one wondered if casinos were immune to infectious diseases. The studies have been proven correct, but it is impossible to wave a magic wand in the middle of a pandemic and diversify Nevada’s economy.
It is not only business that has conflicted officials and community leaders in this phase of the pandemic. Churches and schools are also conflicted. The Constitution forbids anyone from restricting religion, which a federal court ruled applied to Nevada’s restrictions on the number of people allowed in a church. The conflict between church and state has played out across the country. Some very large churches and congregations have defied government orders and held services. The plea of the churches is somewhat like that of casinos in Nevada: Churches are essential to the wellbeing of their members. The argument for opening schools is about the same. Closed, part-time and online schools do not fully meet the needs of the students. It is universally agreed that education is essential, therefore a school is an essential enterprise.
There is, of course, the other side of the crisis, the disease itself and its impact on human life. Worldwide, almost 90 million people have contracted COVID-19 and nearly 2 million have died. It can be and has been argued that without the restrictions on personal and individual activity, those numbers would be much greater. China, the first country to recognize the virus, has had the fewest number of infections and deaths, 87,000 and 4,500, respectively, in a population of 1.4 billion people. By comparison, Nevada has registered 244,000 infections and 3,500 deaths. Clearly, Nevada is in the middle of a much larger crisis than China. In China it was a minor threat, while in Nevada, COVID-19 is the largest threat the state has ever faced.
The reason that China has fewer cases than any other major country in the world is its form of government. President Xi’s government and the Chinese Communist Party have absolute authority to close all businesses and order everyone to stay home. Recently, after just 39 cases, 11 million people in the city of Shijiazhuang were put under lockdown. However, except for North Korea and Myanmar, the rest of the world cannot so easily control the movement of people and restrict business activity. Still, the lesson of China is not lost on others. The governors of California, New York and Illinois have been highly visible in their efforts to control the spread of the virus through business and social controls. Nevada’s governor has not received the national attention as those governors, but he has been as aggressive.
In December, Governor Sisolak extended the restrictions first instituted in November 2020 into 2021. The restrictions include 10 persons maximum in private gathering, 50 in public gatherings. Gyms, libraries, bowling alleys, restaurants, bars, churches and casinos are restricted to 25 percent of the fire code capacity. In all cases, the use of masks and social distances remained a requirement. Sisolak’s stance has not been popular with some in the business and religious communities. A church in Dayton, Nevada, sued the state over earlier restrictions on churches that were tighter than those imposed on casinos and won their case. Small bar and restaurant owners have also looked for legal workarounds, but have yet to find one. Those people are not anti-social, nor necessarily COVID deniers, they simply are trying to survive. After over 10 months of restrictions, many small businesses are on the verge of bankruptcy. It is estimated that 15-25 percent of the small businesses in the United States will fail due to the crisis and small business is the single largest source of jobs in the country. More than 24 million small businesses in the country employ 59.9 million people, 47.3 percent of the private workforce.
That is the conflict: jobs and economic activity against public health and safety. It is the same everywhere in the world. In Nevada, 244,000 have been infected with the virus, and 150,000, 10 percent of the workforce, are without employment. It should not be an either-or choice. But in many people’s eyes, it is becoming that. Angry people refuse to wear masks, maintain a safe distance, get vaccinated or indeed accept the pandemic as a fact. At the same time, anguished people beg and plead for stronger measures and faster vaccinations.
Vaccination is the best hope at the moment. Once the critical number of vaccinations have been given, it will be possible to begin planning for reopening and restarting the economy without having to choose life and health over employment and taxes. Until that time comes, most of us are conflicted and exhausted by the limitations and changes in our lives. There are no easy choices or simple decisions.
