Not an L, not a V, not a Nike swoosh: Nevada's K-shaped recovery

By Katie Gilbertson| Eshaan Vakil


The complex Nevada economic recovery from the COVID-19 pandemic and recession can be explained by one letter of the alphabet – the letter K. The “K-shaped recovery” describes how white-collar jobs are able to prosper during the COVID-19 pandemic, while blue-collar workers are forced out of the labor market or subjected to unsafe working conditions for minimal compensation. Those on the upper half of a K distribution recover at a much quicker pace than those on the lower half. According to the U.S. Chamber of Commerce, sectors on the upper half of the K include technology, retail, and software services; sectors on the lower half include hospitality, travel, and food services.



Anyone familiar with Nevada’s regional economies can see parallels between Nevada’s workforce concentration and the K distribution. In recent years, Northern Nevada has become a satellite Silicon Valley of sorts, bringing a tech presence to the valley. Employees can perform these jobs from home, and market demand for them remains high despite the pandemic. Meanwhile, Southern Nevada is the global epicenter of the leisure and hospitality industry. Employees in this sector are dependent upon face-to-face exchange with customers and have faced significant hardship and uncertainty during the pandemic, while receiving little to no compensation.

A snapshot of the whole state shows Northern Nevada on the upper half of the K distribution and Southern Nevada on the lower half of the distribution.

The data bear out a Nevadan K-shaped recovery, with a drastic chasm in unemployment rates between Reno and Las Vegas. In March, at the beginning of the pandemic, the unemployment rate in Las Vegas was only 1.7 percent above that of Reno, but by April the difference exploded, with unemployment in Las Vegas ballooning to 34.2 percent — a 13.7 percent larger unemployment rate than Reno in the same period. Since June, the difference has stabilized, with Las Vegas unemployment resting about 8 percent higher than that of Reno. These percentages, however, still obscure part of the story. Due to Las Vegas’s much larger population, there are many more people unemployed there. As of October, there were 111,600 more people unemployed than the same point in the prior year; this equates to four in ten workers within the entire hospitality industry being unemployed. Compare this to 15,000 more people unemployed than the same time last year for Reno; roughly the amount of employees at Caesars Palace. The northern half of the state is well on its way to recovery, buttressed by a pre-pandemic investment of two-third’s of state economic development assets in that region, while Southern Nevada struggles to regain its economic footing and restore its economy.

Read more: https://www.nevadacurrent.com/2020/12/23/not-an-l-not-a-v-not-a-nike-swoosh-nevadas-k-shaped-recovery/