Nevada's Economy - Who Benefits?

Published by The Progressive Leadership Alliance of Nevada (PLAN) in 2001

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Executive Summary

Working Hard, Living Poor is part of a series of reports by the Progressive Leadership Alliance of Nevada that examines Nevada's economy and how working families fare in that economy.

The report looks at the availability of living wage jobs in Nevada. It also presents recommendations to policy makers on how to increase the number of living wage jobs. A living wage is an amount that allows a working family to get by without government assistance.

In the last three decades, nearly a million jobs were created in Nevada-the highest rate of job growth in the nation. Unfortunately, the majority of these jobs were not living wage jobs. This report was motivated by the contradictions between economic boom and the stories of Nevadans who must work multiple jobs to pay basic bills.

Key Findings

• Nearly 60% of current Nevada jobs pay less than a living wage for a three-person family (see page 2 of Executive Summary & page 9).
• Among the fastest growing jobs in Nevada, almost 90% pay less than a living wage (see page 2 of Executive Summary & page 10).
• A living wage for a one parent, two-child family in Nevada is $14.57 an hour (pages 6 & 7).
• This amount-$14.57-is comparable to other Living Wage rates in similar sized states.
• Poverty Wage jobs have increased from 20% to 25.8% in the last three decades in Nevada.
• Poverty guidelines are set unrealistically low. Working families cannot survive on a minimum wage of $5.15 an hour or the Census Bureau's Poverty Threshold wage of $6.67 an hour. (p.7)
How working families cope in Nevada (see page 11)

• Many low-wage workers hold two jobs, often two full-time jobs, in order to pay basic bills.
• Many go without health insurance. Health care needs account for about 9 % of a working family's budget. If all Nevadans without health insurance lived in a single city, it would be the largest city in the state. In Nevada, 466,300 people (23.7% of the population) are uninsured.
• Families cut corners in childcare that often costs more annually than twice the tuition at Nevada universities. Childcare costs represent about 16% of a working family's budget.
• Some Nevadans go hungry or use food banks. 167,000 Nevadans (8.6% of households) are "food insecure"-they do not know if they can meet their food needs.
• Some working families rely on public assistance such as Medicaid or food stamps.

Recommendations

• Raise the minimum wage (page 13). If we raise the minimum wage, we could reverse or moderate the decline in wages for Nevada workers at the bottom of the pay scale. The minimum wage was created to maintain the "minimum standard of living necessary for health, efficiency, and general well being of workers." Its value has generally declined in the last three decades.
• 10 states and the District of Columbia have raised their minimum wages.
  
• 72% of minimum wages workers are adults.
  
• 40% are the sole source of income for their households.
  
• 48,890 Nevada workers earn the minimum wage.
  
• Raising the minimum wage in 1996 & 1997 did not cause job loss.
• Enact Living Wage Laws (page 15).
  
• Require businesses that benefit from public money (through contracts, tax breaks, grants, loans or bond financing) to pay their workers a living wage.
• When subsidized employers pay their workers less than a living wage, taxpayers end up footing a double bill-the initial business subsidy and then food stamps, emergency medical, housing and other services for the low wage workers.
• More than 50 living wage laws have been passed across the country.

Editorial Excerpts

"Labor Day more than a holiday," Las Vegas Sun, Friday, August 31, 2001, page 22A.

"This week the Progressive Leadership Alliance of Nevada released its findings of a year-long study that said the federally mandated minimum wage of $5.15 an hour-last raised in 1997-isn't enough to actually put food on the table and keep a roof overhead for a typical Nevada family. For instance, one parent with two children actually would require $14.75 an hour just to make ends meet.

"The alliance, an umbrella group of unions, public interest groups, environmental organizations and civil rights groups, has called on state government to enact a "living wage" law. Businesses that receive state money-tax breaks, government contracts, loans-would have to make up the difference between the minimum wage and the "living wage," which would be determined by the Nevada Legislature. State lawmakers would do well to consider this proposal."

"All states need to set livable wage," Reno Gazette-Journal, Friday, August 31, 2001

"A study released this week by the Progressive Leadership Alliance of Nevada confirms what other reports have said in the past: Nevada's service-dependent economy provides many lower-paying jobs. Raising the minimum wage could have a ripple effect in the community, lowering crime, reducing the need for social services, and giving people some extra cash to invest in their community. Who can argue with that?"

"Repealing the law of supply and demand," Las Vegas Review-Journal, Friday, August 31, 2001, page 16B. NOTE: This editorial was generally against the recommendations in our report; however, the Review-Journal did agree with us concerning business subsidies.

"Give PLAN credit for getting one thing right, at least: Though 'tax breaks' are not a government subsidy (subsidies involve handing someone taxpayer cash, not letting them keep a little more of what they earned), it is indeed true as PLAN President Mark Nichols argues, that 'we should not be subsidizing businesses that pay their workers a poverty wage.'"