As tips shrink, economy sinks

When Jamie Fraleigh served her first drink at Siegel Slots and Suites near the north end of Las Vegas Boulevard, the flow of jobs, alcohol and cash were plentiful.

That was 2006, when the working-class casino was called the Barcelona Club and thousands of construction workers were migrating to Las Vegas for new jobs building multibillion-dollar resorts on the Strip, and leaving lots of tips in local bars and casinos.

Back then there were nearly 105,000 construction jobs in Las Vegas and 176,000 hotel-casino and gaming jobs.

Now there are an estimated 76,700 construction jobs and 155,000 hotel-casino and gaming jobs.

The construction jobs, not to mention millions of leisure and business visits, dried up and blew away in the recession.

In the last 12 months, the local economy lost 19,000 construction jobs. And this year, through May, there are about 1.1 million fewer visitors than there were in the first five months of 2007, before the recession sunk its teeth into consumer spending.

That combination means a lot fewer workers and tourists spending money in Las Vegas' locals joints and high-end hotel-casinos.

"It is slow in here, but thank God I'm still working," Fraleigh said.

Fraleigh, a bartender and mother of two, is among thousands of other tip-earners still here, hustling drinks, flipping cards and dispensing charm to customers in exchange for tips in an economy in which there is less money to go around.

"People are just playing less money," said Bill Dukes, 42, a blackjack dealer at the Rio since 1993. "I don't even think it is a conscious effort. People are coming here with more of a rigid budget. They are just holding onto their money."

Fraleigh, 24, said the tough times have more customers stretching to make their incomes match expenses, but it doesn't change the fundamentals of her job.

Work hard, be friendly and treat every customer like a VIP.

"At the end of the month, there are not going to be a lot of people in there; they have their bills to pay," she said. "It could be a completely dead day, everybody could be broke, nobody can be tipping anything then you have that one jackpot and they throw you $100. Even if you lost your job, we're not going to treat you any different than if you were a millionaire."

The ups and downs of tip-based income are not just a concern for tip earners, the entire Las Vegas economy moves on the whims of satisfied -- or dissatisfied -- customers.

"Anyone who says tips don't drive this city, they are not involved in this sector," said Jeff Voyles, a professor of gaming at University of Nevada, Las Vegas. "One dollar at a time adds up over the course of the year."

Voyles said that at big hotel-casinos such as MGM Grand or Mandalay Bay, dealers can earn $50,000, $60,000, $70,000 or even $80,000 per year, depending on their shifts.

Collectively, tips at a big hotel-casino can total up to $30 million or more in a year. Multiply that by the number of big resorts, not to mention small casinos and bars in town, and it becomes clear how they can boost or drag down much of the economy.

"It ultimately trickles down into a lot of different sectors," Voyles said. "We are feeling the repercussions of that in a lot of different sectors."

Fraleigh said she's grateful that her property has new owners who are willing to spend money and time improving the property and creating a festive atmosphere despite the economic slump.

"That's what we are there for. People come into a bar and get rid of their problems," she said. "You can't abandon a customer because they don't have the money and the means right there."

At the other end of town from Fraleigh, Kalani Cruz deals cards and dice to upper-middle-class tourists and conventioneers at Mandalay Bay.

Cruz, a Hawaii native who works the graveyard shift, said that even though there may be few customers, the ones who come his way still manage to leave tokes.

With media worldwide focusing on the purported demise of Las Vegas during this recession, Cruz said he has lots of customers who inquire about his and other tip-earners' well-being.

"They are always concerned about us, how we are doing," Cruz, 41, said of recession-era banter at the tables.

Some dealers have taken second jobs to bolster their incomes, others have mimicked consumers and cut back on discretionary spending.

Cruz, a father of three and, recently, a new grandfather, said his family has done the latter.

"No big-ticket items," he said. "All those big decisions, buy a car or buy the 56-inch television set, we have to take a step back and see if we really need that."

Customers are willing to do their part to help servers, dealers and other tip-earners stay above water.

Karen Gordon, owner of the destination management company Activity Planners and a longtime Las Vegan, said she makes sure to include gratuities in the cost of events she books for clients.

Although discounts at Las Vegas restaurants and hotels are more abundant now because of the recession, Gordon said budget cuts shouldn't apply to tipping.

"If your service is exemplary, your tip should reflect that," she said. "Wherever I travel in the world, I expect great service and I'm really willing to tip when I experience it."

But as Cruz and other tip-earners know, there's a fine line between being candid with customers who are genuinely concerned with the well-being of Las Vegas and oversharing.

The most important part of the job is to remain upbeat and unflappable, whether the tips are titanic or tiny.

"The show must go on. As bad of a quote as that can be, that's the mentality," Cruz said. "The casino is still going to go on no matter what."

That's the attitude Melissa Lange said she brings to her job as a cocktail server and bartender at the Gold Spike downtown.

She took the job in early 2008 as the owners were remodeling the property, and is glad she did.

"It is a nice place, it is a little place not a lot of people know about," she said.

Even during the recession, Lange, 29, said more people are coming in for cheap drinks and low-limit gambling, enough to generate a good tip income.

"I think everybody is looking for a deal," she said.

Lange works four days a week and said that one of the things she likes about a tip job is that it gives her more control over how much she makes.

"If you are a bad server, you are not going to make good tips," she said.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.