TOPICS > Economy

Losing in Las Vegas

October 11, 2001 at 12:00 AM EDT


TOM BEARDEN: The Medina family lives more than 2,000 miles away from New York City, but the September 11 attacks have had a profound effect on their lives; Gerardo Medina lost his job as a banquet waiter.

CORRESPONDENT: There’s no income coming in now?


TOM BEARDEN: Now he, and thousands of others like him in Las Vegas, are standing in long lines to apply for unemployment benefits, food stamps, and deferred utility payments.

GERARDO MEDINA: I’m surviving, and trying to apply wherever I can get some help to pay my bills and get my family… Just to keep my family alive I guess. I mean I’m not going to pay my car-I think I just want to return it– and I don’t know what’s going to happen with my house. I’m paying a house. I don’t know what’s going to happen. Maybe I’ll try to sell it or rent it, I don’t know what’s going to happen, but so far I’m just you know surviving on whatever I can get.

TOM BEARDEN: The 15,000 people in Las Vegas who have been laid off in the last three weeks are just a few of the victims of the ripple effect of unemployment that has spread throughout the country, especially in cities that depend on airline travel and tourism. For the past four years, Las Vegas has been the fastest-growing metropolitan area in America. New subdivisions and vast new hotels seemed to spring up overnight. The growth had started to slow before September 11, but the attack has put a lot of construction plans on hold since two-thirds of the Las Vegas economy is generated by tourism, and nearly half of all visitors arrive by air. Alan Feldman is a senior vice President of MGM-Mirage, which owns several of the largest hotels in Las Vegas.

ALAN FELDMAN: Well, I think there is a desire… In times of national stress, there’s a desire to be near family, nearer to home. Obviously, because of the circumstances of what happened, there are obvious concerns about flying. People are concerned about getting back on planes. For a lot of other folks, they’re just concerned about the hassle of flying.

TOM BEARDEN: Feldman says MGM properties normally have a 97% occupancy rate, but that plummeted to 60% following the terrorist attacks. His company alone has had to lay off 6,000 full-time employees. Keith Schwer is the director of the Center for Business and Economic Research at the University of Nevada at Las Vegas.

KEITH SCHWER: This is a big deal in Las Vegas history. The only thing that comes close to comparing to it was the ’90- ’91 period in the Gulf War– in particular in January of that year– occupancy rates in hotels dropped to the 70% level. (Frank Sinatra singing "It’s Time for You")

TOM BEARDEN: The city’s convention and visitors bureau has launched a $13 million advertising campaign to try to lure the public back. Its centerpiece is a never- before-released song by Frank Sinatra. The theme is: "It’s Time for You to Get Back to the Business of Living."

FRANK SINATRA: (singing) Places to be, faces to see break out of that cave …

TOM BEARDEN: Hotels have slashed room rates. Some airlines have drastically cut fares. The result was a modest up-tick in the number of tourists last week, but so far there’s no indication that any of the people who were laid off will be rehired anytime soon.

TOM BEARDEN: Pom Fritz was a housekeeper at the Mirage and has sole custody of her three grandchildren.

POM FRITZ: I really don’t know how long I can hold this. It’s sad. I get depressed you know. My grandkids say, Grandma, I want this, I want that… I say, "wait a minute– you have to wait a minute. Don’t you understand? I got laid off." And then they say, oh, I’m sorry, I’m sorry. It’s not their fault.

TOM BEARDEN: Ron Hecker dealt cards at the Mirage. He says it’s tough to fine another job in this climate.

RON HECKER: Your motivation is gone for a while. It’s hard to pick up. It’s hard to get back on your feet. I’m having a rough time with it. I’m not going to lie to you; I’m having a rough time of it.

TOM BEARDEN: The city’s powerful Culinary Workers Union set up a one-stop service center where anybody can file for state and private assistance. Union director D. Taylor says the union has made an unprecedented offer to casino managers.

D. TAYLOR: We offered, with some caveats, that we would have a shortened workweek temporarily between now and Thanksgiving in order to get more people back to work. So far, the casinos have not responded to this.

TOM BEARDEN: Casino owners say they are trying to avoid further layoffs, but even those who still have their jobs are nervous.

SPOKESMAN: A lot of the people who we’re talking about are people who live paycheck to paycheck, who have health plans now. If they lose their jobs, I think that would be catastrophic for them and their families. In those cities that rely upon tourism it would put an undue pressure on social services.

TOM BEARDEN: And now Las Vegas is bracing for an anticipated further downturn in the wake of U.S. attacks on Afghanistan.