An economist speaking last week at the Economic Development Authority’s annual state of the economy luncheon said northern Nevada’s economy has much to celebrate even as recession is looming – if it’s not already here.
A low unemployment rate, a rise in incomes and a large amount of money churning in the local economy are reasons both for optimism and concern. That’s according to economist Brian Gordon who gave the keynote address at the luncheon.
“We are now spending beyond our means. We’re spending more than we have coming in the front door,” he said. “This has the potential to be problematic.
“Is the sky falling yet? I don’t think that we’re quite there,” Gordon added. “But … obviously we’ve got some concerns in terms of what’s happening from a national perspective, right?”
The local economy is being impacted by national politics and federal interest rates.
“We are seeing reduced levels of debt service for consumers just generally across the board,” he explained. “And from a corporate standpoint, we’ve seen more earnings than we have ever seen in our lifetime. This is contributing to what we’re experiencing today, which is a little bit more of a stable environment.”
Gordon also said the economy is in a recession. There is a struggle to maintain the workforce due in part to more jobs available than employees. That’s because of retirements and job switchers seeking more upward mobility and better jobs.
Consumer spending and borrowing are returning to normal from the pandemic as well.
“Folks are spending like drunken sailors,” Gordon added. But that spending is beyond their means, so debt is increasing.
The lunch was EDAWN’s 40th anniversary celebration. The group recruits businesses to locate to the Reno area – including Fernley – hire locals and to pay livable wages.
EDAWN’s Mike Kazmierski, in the wake of Tesla’s announcement to expand its Nevada operations to build electric semi trucks, said businesses are following their promises.
He cited Tesla as an example. Initial gigafactory concerns about Tesla’s investments in Nevada have not been borne out, he said. Tesla’s promises for hiring and contributions have been met and exceeded.
“We get tremendous tax revenue by abating those taxes, letting them stay here and grow here. And Tesla is a great example,” he said. “The gigafactory will phase out their incentives in 2024. When that is done. When you add that to the incentives of their employees, they’re adding $125 million to the state economy through sales tax revenue and property tax revenue and other tax revenues that go to the state. That’s money that wouldn’t be here if we didn’t abate their taxes 10 years ago.”
Kazmierski encouraged the more than 1,000 people who attended the lunch to ignore housing activists and NIMBYs.
He also pushed for support of the Truckee Meadows Public Lands Management Act – or the lands bill – and the Nevada Cares Campus.
“For the activists who think it’s good to have camps everywhere, as opposed to being in a warm Cares Campus where it’s safe – that’s a very unsafe, and very, very unhealthy environment,” he said. “When you look at those camps, I’d ask any activists who just spent a couple nights in the camps and tell me it’s better than being in the Cares Campus.”