Recent Economic Data Shows Mostly Positive Signs

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Recent Economic Data Shows Mostly Positive Signs for Nevada’s Economy But Unemployment Remains High for Drop-outs

“Encouraging” was the word Nevada’s Chief Economist Bill Anderson used yesterday to describe the most recent labor market data for the Silver State. Anderson was speaking on behalf of the Department of Employment, Training and Rehabilitation (DETR) at the Economic Forum, the purpose of which is to provide “forecasts of the state’s General Fund revenues for each biennium budget.”

Nevada, arguably the state most affected by the recession, has been successful in cutting the unemployment rate in half since the recession began. The April 2016 unemployment rate was 5.8 percent, down 1.1 percent from the same time last year. This rate is closer to the current national unemployment rate of 4.7 percent than Nevada’s levels were during the recession. During the recession, the national unemployment rate peaked at 9.8 percent, whereas Nevada’s reached a high of 14.5 percent. Currently, eight states have reported higher unemployment rates than Nevada.

The Silver State has had job growth above the national average. In April of this year, Nevada realized 2.6 percent job growth, 0.7 percent higher than the 1.9 percent national average.

These improvements come after four years when Nevada had the highest jobless rate in the nation. Anderson noted that the current nonfarm unemployment rate is still 1.4 percent above the rate during the second quarter of 2007, but he said that DETR expects the rate could reach pre-recession levels by the end of the year. In fact, DETR estimates that job levels will exceed the pre-recession peak by 97,000 by the end of 2017.

Anderson added that the Silver State has experienced 64 consecutive months of job growth and the trend is expected to continue. Nevada has added approximately 140,000 new jobs between 2010 and 2015, with year-over-year growth remaining about 30,000.

Small businesses have been key players in job creation, with the number of jobs currently at an all-time high of nearly 600,000. Gains have been recorded for small business jobs in each of the last 20 quarters. The number of initial jobless claims for unemployment insurance has essentially reached their pre-recession levels, Anderson said.

While the data shared on Thursday) by DETR showed mostly positive trends, the news was not all good. Unemployment rates in three of Nevada’s rural counties remain well above the state average. Mineral County’s unemployment rate for April 2016 was 9.0 percent, Lyon County’s was 8.3 percent, and Nye County’s was 7.9 percent.

Unemployment Rate Remains High for Drop-Outs

More troubling is the unemployment rate for Nevadans with a high school diploma or less. Anderson reported that these two groups have the highest unemployment rates, at about 7.5 percent for individuals with less than a high school diploma and 7.0 percent for individuals with a high school diploma. In contrast, the unemployment rate for individuals with bachelor’s degrees and higher was only about 3 percent.

In addition to struggling to employ the state’s eligible workforce with the lowest education levels, Nevada lags behind other states in high school graduation rates. The U.S. Department of Education reported in December 2015 that the Silver State’s graduation rate of just 70 percent is the third lowest in the nation. Only New Mexico and the District of Columbia, with high school graduation rates of 68.5 and 61.4 percent respectively, fared worse. Moreover, slightly more than one-third of Nevada’s population has less than a high school diploma, which makes this is a disturbing statistic.

For students of color, the high school graduation rate in Nevada is even lower. The graduation rate for Latinos is only 65 percent.. The graduation rate for African-Americans is only 54 percent, the lowest in the nation and far lower than the national average of 72.5 percent. Nevada’s graduation rate for students with limited English proficiency was 28.6 percent, the second lowest in the nation behind Arizona.

As Nevada’s population becomes increasingly diverse (49.5 percent of the population identifies as non-white), more effective measures are needed to ensure that minority populations are not shutout of the state’s economy upswing. In addition, the state must take reasonable steps to enable more jobs and opportunities are available across Nevada, particularly our rural communities.

The following are policy solutions that could help the Silver State achieve these critical objectives.

  • Continue supporting Jobs for America’s Graduates (JAGNevada), a national nonprofit that now has an affiliate program here in Nevada. The high school based program targeting significantly under-resourced students is a data-driven, evidence-based model that raises graduation rates and prepares participants with work readiness skills, including preparing for an interview and working on credit recovery. “Having served over 700 students in 2015, JAG Nevada is expanding to 37 schools across Nevada, and serving 1, 200 youth. JAG is poised to expand to 50 schools across Nevada by 2017,” an April 2016 legislative update from the Nevada Department of Education noted. The program has reported an 83 percent graduation rate for both the class of 2015 and 2016, well above the state rate and also above the national average.
  • Expand dual credit opportunities for high school students. Dual credit programs can help high school students in transitioning to college and are a critical component of strengthening career readiness programming. Dual credit programs ease the transition process by allowing students to begin earning college credit while still in high school. Some research has found that dual credit students are more likely to graduate from college than non-participants. In 2015, the Nevada Legislature appropriated $3 million in Fiscal Year 2016 and $5 million in Fiscal Year 2017 for dual enrollment (and science, technology, mathematics, and engineering) programs (Senate Bill 515).
  • Strengthen career readiness pathways. At the Southern Nevada Forum in May, legislators proposed revising the funding formula for Career Technical Education at Nevada’s community colleges. At the Nevada System of Higher Education (NSHE) Board of Regents meeting on June 9–10, Regents passes a resolution to support Workforce Innovations for a New Nevada (WINN), a program that partners new businesses in the state with higher education institutions to create a workforce pipeline.
  • Expand career pathways in rural Nevada. Advocates for Great Basin College (GBC) want the NSHE Board of Regents to consider recognizing GBC as one of the state’s four-year public colleges. This measure would increase enable GBC to offer more two- and four-year degrees and expand educational opportunities for rural Nevada.
  • Provide more college readiness programs for high school students and support for students in college. Programs such as Upward Bound high school students from low-income families and students from families in which neither parent holds a bachelor’s degree. The program, which is currently on all three of Nevada’s public college campuses, provides tutoring, SAT and ACT college entrance exam preparation, and information on financial aid. As the Center for Academic Enrichment and Outreach at the University of Nevada Las Vegas (UNLV) reported, 98 percent of local students who participated in the program achieved proficiency level on state assessments in reading and math.