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Economic Issues Weigh on Minds of Las Vegas Voters

November 13, 2007 at 6:25 PM EDT
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JIM LEHRER: Now, day two of our “Big Picture” trip to Nevada, one of the early political caucus states. Judy Woodruff and Ray Suarez will be talking to people in and around Las Vegas all week about the issues that matter to them this election year.

Tonight’s topic is the economy. Ray Suarez begins.

RAY SUAREZ: In some ways, Las Vegas has already arrived where America only someday will be. Its economy is dominated by service employment. Its population is 25 percent Latino.

But in many other ways, it’s not like the rest of America at all. Think of this place as an enormous vacuum cleaner, pulling in investment, pulling in people from across the country and across the world, some just to play, others to stay. It brings in structural steel, concrete, timber, and billions of gallons of water from across the region to a spot in the middle of a desert.

Tourism is the fuel in Nevada’s economic engine. Every year, 38 million visitors flock to places like Caesars Palace. In 2007, visitors spent $39.4 billion here, pulling in new workers to take care of them.

About 85 percent of Nevada’s workers are in the service sector, people like Freddie Foisa. Foisa moved from Syracuse, New York, with a high school diploma 11 years ago and, except for a short break after the 9/11 terrorist attacks, has been a Las Vegas casino dealer ever since.

RAY SUAREZ: You could make this a career?

FREDDY FOISA, Dealer, Caesars Palace: It is a career, absolutely. It’s my last job. That’s my phrase. That’s what I say.

RAY SUAREZ: Gambling and hospitality are not only the biggest employers; they are Nevada’s biggest taxpayers. Revenues have grown more than 7 percent since 2005. Nationally, legalized gambling has grown at a much faster rate than the overall economy.

To sustain explosive growth, companies like Harrah’s Entertainment, which owns Caesars Palace, must constantly reinvent themselves. Marybel Batjer is vice president of public policy and communications for Harrah’s.

MARYBEL BATJER, Harrah’s Entertainment: We’re developing right now some very interesting and fun games for the gaming floor that I think will draw some interest in the 30s and 40s demographics of our population. So you have to keep looking at what’s exciting — I mean, the new generation is a gaming generation — in terms of fun kinds of games that they like. So that’s a challenge to stay ahead of that interest and invent to it.

RAY SUAREZ: A richer country sends richer visitors here willing to spend a lot more on a good time. No longer is Vegas the land of cut-rate hotel rooms and all-you-can-eat buffets.

In the mid-’80s, the resort owners rolled the dice, hoping to raise profits by luring higher-end customers, and the bet paid off. The hotels became more opulent, each prepared to spend millions to outdo the other. Swanky shops and high-end restaurants moved in.

MARYBEL BATJER: We’ve brought some of the finest chefs in the world to Las Vegas.

RAY SUAREZ: Today, money pouring into retailers, hotels and restaurants outstrips the already enormous profits from gambling.

The industry’s growth appears unending. In two years, thousands of construction workers will pack up their tools, and MGM Mirage will open its $8 billion CityCenter, and a predicted 50,000 jobs will be created.

Demand for low-wage workers for both business and residential construction jobs has been a powerful magnet for immigrants, legal and illegal. Launce Rake of the Progressive Leadership Alliance of Nevada says the economy here is absolutely dependent on its immigrant workforce.

LAUNCE RAKE, Progressive Leadership Alliance of Nevada: You know, we’re looking at perhaps a 40 percent, maybe half of the people in residential construction are, in fact, immigrants. Many, many of them may be undocumented.

We see very high percentage of folks working in the hospitality industry, which is our only industry in Las Vegas, are immigrants. Again, many of them have documentation issues. If you took those people out of our economy, we would simply shut down.

RAY SUAREZ: Even so, unemployment in the state is up, partly due to a huge pool of unskilled laborers easily shed in a slowdown. Management and labor often disagree, but they share an interest in a better-trained workforce.

The powerful Culinary Workers Union and major Las Vegas hotels came together to create Nevada Partners, a culinary training academy for unskilled workers entering hospitality jobs. Steve Horsford is CEO.

STEVE HORSFORD, CEO, Nevada Partners: We’re looking at over 250,000 workers through 2020 to fill just the culinary classification workers, workers such as cooks, food servers, you know, bar backs, bussers, really the backbone of the Las Vegas hospitality industry.

RAY SUAREZ: Good wages and benefits offered in the tourist business have created a new middle class and a wave of new homebuyers. New homebuyers have relied on riskier mortgages, not a big problem as long as the economy stays strong.

STEVE HORSFORD: We have growing issues related to housing, affordability of housing. You know, people aren’t moving here the way they were because they can’t find affordable housing. Those who are here, because of the mortgage crisis nationally, workers are — unfortunately, some of them are losing their homes or being, you know, not able to afford the mortgages that they’ve entered into.

RAY SUAREZ: In fact, Nevada now has the highest rate of foreclosures of any state. One of every 61 homes is being lost by its owner. People like Tonya Blair, now struggling to save her home from foreclosure, got caught in the middle.

TONYA BLAIR, Homeowner: We went to sign the paperwork, and then we saw this big balloon payment at the bottom, $207,000. I was like, “What’s this?” And he goes, “No, don’t worry. In a year, you’ll refinance, and it will be a fixed rate, and everything will be fine.” “OK.” Well, it didn’t work out that way.

RAY SUAREZ: Even though Blair had made 15 years of payments before she refinanced, she was advised to just walk away and start over. That sluggish housing market has meant a loss of property taxes and created a ripple effect on consumer spending.

Since Nevada doesn’t have an income tax, 32 percent of general funding for the state comes from sales taxes. That leaves the state budget unusually vulnerable to downturns. And sure enough, sales tax and gambling revenues are down, the largest drop since the 2001 terrorist attacks.

The governor has asked state agencies to prepare a list of possible cuts totaling $184 million for this and next year. Many say it’s time to rethink the way Nevada pays for government services.

Steve Hill owns Silver State Materials and provides concrete to both residential and commercial builders.

STEVE HILL, Silver State Materials Corp.: We’re reliant on growth at this point to pay for our public needs. And if that growth slows, as it’s doing now, we have budget issues as a result. So we need to have a conversation about how to transition as the community changes, and we’ll have to address that.

RAY SUAREZ: Nevada’s voters have had to look no further than the casino to pay the state’s bills, but growth has meant more people with more needs, a bigger and more complex government, and Nevada voters will likely watch to see if this year’s presidential candidates address such needs.

State of the economy

Jan Jones
Harrah's Entertainment
Las Vegas is a very unique community. You've got this frenetic growth. On the other hand, you have a community that's struggling to be recognized for its quality of life, for its education system, for its health care, for affordable housing.

JUDY WOODRUFF: To take this question a little further of Nevada's economy and how it will affect the way its citizens vote, we came to one of the best-known casinos, Caesars Palace, and found a quiet corner in its exclusive Bradley Ogden Restaurant.

And joining us now are four people who know a great deal about different aspects of Nevada's economy. They are, starting on the left: Robert Gomez, he is chair of the Las Vegas Chamber of Commerce and general manager of Magic Bright Janitorial.

Jan Jones is senior vice president of communications and government relations for Harrah's Entertainment, she served as mayor of Las Vegas from 1991 to 1999.

Lorraine Hunt-Bono is the owner of the Bootlegger Bistro Restaurant. She was Nevada's lieutenant governor from 1999 to 2006.

And D. Taylor, he is the secretary-treasurer of the Culinary Workers Union.

Thank you all for being with us. You've all just had a chance to listen to Ray Suarez report on the economy of the state of Nevada. What would you add to that? What should the rest of the country know, D. Taylor, about what's going on in this state?

D. TAYLOR, Culinary Workers Union: Well, it's sort of schizophrenic. It's both booming, and also there's a degree of insecurity I think you find in the rest of the country, too, involving housing, health care, schools, and the price of gas. I mean, those are bread-and-butter issues that people in Las Vegas feel just like they do across the country. And yet, obviously, we have an enormous amount of construction, good jobs, like in this restaurant, but there's both. There's dual things going on here.

JUDY WOODRUFF: Jan Jones, what else would you say about the economy of this state?

JAN JONES, Harrah's Entertainment: Well, you know, Las Vegas is a very unique community. You've got this frenetic growth. On the other hand, you have a community that's struggling to be recognized for its quality of life, for its education system, for its health care, for affordable housing.

So in trying to find that balance and realizing that, yes, you want to create this dynamic tourist experience, but not at the expense of the people who live here, work here, and raise their families, so it's balance.

JUDY WOODRUFF: And, Robert Gomez, from the viewpoint of a small business person, what would you add?

ROBERT GOMEZ, Las Vegas Latin Chamber of Commerce: Gaming has been a fore focus of our economy for a long time, but now you're seeing a lot of diversification, as well. The furniture industry is here now. You've got the jewelry market center coming down in the downtown area, as well. These are great opportunities for small business owners maybe who cannot work in the gaming industry but has other work in other areas. And it's real exciting.

JUDY WOODRUFF: Lorraine Hunt-Bono, you've run a business. You've been involved in politics in this state. How does the economy feel to you? Back in Washington, we're starting to hear about the possibility of a recession. We hear the Federal Reserve is worried about inflation. What's on your mind?

LORRAINE HUNT-BONO, Owner, The Bootlegger Bistro: Well, Judy, there's no doubt we're in a little bit of a slowdown. But my family and I have been here for over 50 years, and so I have a broader perspective on things.

The cycles have always been up and down in Las Vegas, but overall we've always been going up. So this little slowdown -- we know that there's light at the end of the tunnel, with all the new projects on the Las Vegas strip and throughout the valley. I feel very confident about our economy. This is still an entrepreneur's dreamland. It still is.

JUDY WOODRUFF: D. Taylor, for your union members -- and there are, what, 60,000 of them, the Culinary Workers Union -- are they feeling OK about the state of the economy in Nevada going forward?

D. TAYLOR: Yes, they're feeling OK. Our workforce that we represent is about 58 percent folks who were not born in the United States. They're from Asia; they're from all parts of Latin America; they're from Eastern Europe; they're from Africa, which is a great gateway to get -- we call it the Las Vegas dream -- which is -- maybe it's an American dream, but lots of times in the service sector in this country you don't reach that.

JUDY WOODRUFF: Robert Gomez, there was a lot of reference -- we just heard it again from D. Taylor -- about the high percentage of immigrants in this community. How big a factor are they in the engine of the economy?

ROBERT GOMEZ: Oh, they're the fuel, no doubt about it. Without the fuel, that engine isn't running. When you have, especially in like Las Vegas, in our gaming, 58 percent Latino, when you have that much of a population, they're the fuel that makes it work. Without that fuel, we're not going to have that vibrant economy. There are things affecting that fuel or those people, that immigrant population that you're talking about, that need to be addressed on a bigger level than Nevada.

JUDY WOODRUFF: And what are you referring to?

ROBERT GOMEZ: Immigration, specifically, no doubt about it. It's hurting the entire economy of the entire country and could affect the world. You know, someone's got to pick those grapes in California, and right here somebody has to do those service industry jobs.

Immigration policy

Robert Gomez
Las Vegas Latin Chamber of Commerce
The right solution is to get on the bargaining table. You can't do anything if you're not sitting there negotiating it. And right now, we're not negotiating it.

JUDY WOODRUFF: Is an immigration policy part and parcel of keeping this economy going? How do the two come together, would you say?

D. TAYLOR: The idea of not having an immigration policy is absurd in this country. We have got to have an immigration policy that not only just affects people who are in the shadows, but also family reunification.

We have a woman who works for us -- she's been a citizen. She's from the Philippines. It's taken her 12 years to get her children over here. That's ludicrous.

So I don't think we should make the classic mistake in this country, because they're Latino or Asian, somehow they're here illegally. That's not what goes on in most of the cases. That's been demagogued.

What we need to have here is a policy that makes sense, that is both humane, secure the borders, and at the same time deals with the reality of the workplace here, not only in Las Vegas, I think throughout the United States.

JUDY WOODRUFF: So what's the right solution, though, for immigration, here?

ROBERT GOMEZ: The right solution is to get on the bargaining table. You can't do anything if you're not sitting there negotiating it. And right now, we're not negotiating it. Right now, it's sitting in impasse, because nobody wants to sit there and sit down and take on a tough issue and discuss it.

JAN JONES: You have so many undocumented workers that are looking for a path to citizenship. And to not provide that is such a lapse of leadership and vision in a country that's founded on immigration and immigrants that it actually is quite horrifying.

JUDY WOODRUFF: Immigration.

LORRAINE HUNT-BONO: I'm a second-generation Italian-American. My relatives came here through Ellis Island. Number one, secure the borders. And most definitely a very aggressive legal immigration policy to address all of the issues.

What should next president do?

Lorraine Hunt-Bono
Owner, The Bootlegger Bistro
I think the small business community is looking for a president who will keep them safe, both nationally and internationally. That means safe from terrorism and safe from gangs in their own respective communities.

JUDY WOODRUFF: What is it, in your mind, Jan Jones, that the next president of the United States needs to do, whether it's tax policy, business regulation, whatever, in order to keep Nevada going in the direction that you think it should?

JAN JONES: I think they have to be very careful about the mandates that they give to states and how they fund them. We have problems with education. We have infrastructure. We have water policy. We have Yucca Mountain.

We need a president who has the leadership to understand that all of the programs that states need to make the quality of life of a level that is in the best interest of the constituents needs to be addressed. You can't keep looking the other way.

JUDY WOODRUFF: What would you add to that?

LORRAINE HUNT-BONO: I think the small business community is looking for a president who will keep them safe, both nationally and internationally. That means safe from terrorism and safe from gangs in their own respective communities.

And, secondly, I think they're looking for a president with great managerial skills that understands the dynamics of a strong economy, low taxes, limited government interference, and opportunity for all.

JUDY WOODRUFF: Foreclosures. Nevada, I guess, has the distinction of being first in the country at this point, but there are a number of states that are having real issues with that. How are your members of the culinary union affected by the broader, unsettled mortgage market and the price of housing?

D. TAYLOR: Well, in 2002, the median price of a house here was $180,000. Today it's over $300,000. This used to be affordable housing central. It's not any longer.

In the last contract we just negotiated with companies like Harrah's, we're setting up a housing trust. We figured out that it is clear that we have got to view our purchasing power collectively in order to help our members get first homes, because our members don't have stock and bond portfolios. Working folks' only asset, really, is their home, and home ownership allows them a lot of freedom.

In every urban area in the United States, home prices have gone through the roof. And so if you look at how wages have increased versus home prices, they don't mix. So people get in these situations.

JUDY WOODRUFF: Do you look to the next president to address this, or is this just something that's going to work its way through the system?

ROBERT GOMEZ: I think that the next president has to have their finger on that pulse, but I think, more importantly, that each state needs to look at their internal policies regarding mortgages and how they're done. But I think the federal government needs to step in where it's way out of line and say, "Look, either you guys fix it, or we're going to have to come up with a peace." So the president has to be there.

LORRAINE HUNT-BONO: I was just going to say, the next president should be looking at the strong economy and then I agree that it's up to the individual states then -- people who are working, have good jobs, and then it's up to the states to make sure that their mortgage-lending policies have great integrity.

Relevance of Washington

D. Taylor
Culinary Workers Union
People have hope, but they think Washington's completely tone deaf. Where Washington can spend over half-a-trillion dollars on the war in Iraq, and yet we can't figure out how to fund children's health care is -- the disconnect is wide.

JUDY WOODRUFF: Last question. Do you feel here in Nevada that Washington, the president, the Congress are relevant to what's going on to your economy, that they can do things that make a difference?

JAN JONES: Absolutely. I mean, people get lost in Las Vegas, the Las Vegas resort destination, not Las Vegas where people live. The question of federal government on education, on health care, on infrastructure, the federal government is very important that they recognize what's happening in Nevada and then work with us to make sure we keep this vibrant economy.

JUDY WOODRUFF: Lorraine, what would you say about that?

LORRAINE HUNT-BONO: Well, I believe that the farther away from Washington our president could be probably the better insight he or she would have on the realities of life in Nevada and in the other parts of the United States.

D. TAYLOR: People have hope, but they think Washington's completely tone deaf. Where Washington can spend over half-a-trillion dollars on the war in Iraq, and yet we can't figure out how to fund children's health care is -- the disconnect is wide.

And I think people in Las Vegas are no different than the rest of the country. There is a disconnect, not that it's not important, but there is a severe disconnect between the needs of the average person and what sometimes occurs in Washington today.

JUDY WOODRUFF: Well, we thank all of you for being with us, Robert Gomez, Jan Jones, Lorraine Hunt-Bono, and D. Taylor. We appreciate it very much.

JIM LEHRER: Tomorrow, Judy and Ray report on the battle for water and electricity in the Nevada desert.

A reminder: on our Web site, you can find more on the rapid growth of the Las Vegas economy, and you can read Judy Woodruff's daily updates to her online Reporter's Notebook. It's all available at PBS.org.