Nevada is No. 1 in income decline

Nevada has landed at the top of another grim list of state comparisons: We lead the nation in falling income.

U.S. census data released Tuesday show that in 2010 Nevadans suffered an 11.9 percent drop in real median household income, adjusted for inflation, finishing the year at $51,525. Only five other states saw income levels drop by 10 percent or more.

Median household income in Nevada peaked at $54,744 in 2008, according to the U.S. Census Bureau.

Nevada also had the nation’s second-highest increase in the poverty rate behind Florida, the Census Bureau reported. Nevada’s poverty rate increased by 4.3 percent, while Florida’s grew by 4.4 percent.

The census report is just the latest in a string of unfortunate firsts for the Silver State. We also have the highest unemployment rate in the nation at 13.4 percent, and the highest home foreclosure rate with roughly one in every 118 households receiving a foreclosure filing in August.

"A lot of people we see are experiencing unemployment or underemployment," said Cena Valladolid, chief operating officer of Consumer Credit Counseling Services in Las Vegas. "The drop in income would be related to people who saw a reduction in their number of hours, work furloughs, going from full-time to part-time status and from part-time to on-call.

"For a lot of families, one of the spouses has been laid off. That all probably makes up why we see a decrease in income," she said.

The employment picture has looked dismal in Nevada for quite some time with little hope of a quick turnaround. The state lost about 100,000 jobs during the recession, many of them in core industries of construction and manufacturing. Las Vegas alone has lost 4,400 construction jobs in the past 12 months, or 10 percent of its workforce, the Associated General Contractors reported in August.

Nevada’s total employment dropped 0.3 percent, to 1.14 million, in August, according to the Department of Employment, Training and Rehabilitation. Sectors such as gaming and hotels, mining and the service industry have shown marginal increases in employment over the last year.

Meanwhile, those fortunate enough to have full-time employment are not seeing any increases in their wages, not even cost-of-living increases, Valladolid said.

"We have to live on the same income year to year while everything else is going up," she said. "It’s a really tough situation. People need to be planning and be proactive to put aside something for those circumstances. We are seeing that in our economy. They’re not spending as much. It’s a vicious cycle we can’t break in poor, old Nevada."

The Census Bureau reported that median household income nationwide also declined, and the poverty rate and number people without health insurance coverage both increased from the previous year. Real median household income in the United States in 2010 was $49,445, a 2.3 percent drop from the 2009 median.

Stephen Miller, chairman of the economics department at University of Nevada, Las Vegas, said Nevada’s real income — or income adjusted for inflation– remains above the national average at 21st out of 50 states. Still, things are dire for many, Miller said.

Las Vegas needs employment growth to reverse negative economic trends, and for that to happen, more visitors must come to town, Miller said. While visitor volume and hotel occupancy have shown some improvement this year, visitor spending is down, he said.

"There’s still a lot of uncertainty out there in the United States and in the world," the economist said. "We need a national recovery to really pull up the Las Vegas economy. We rely so much on tourism. Employment will go up when tourism goes up."

The average weekly wage in Nevada is $793.16 in 2010, or $19.83 cents an hour, down from $797.39, or $19.93 an hour, in 2009, according to the Department of Employment, Training and Rehabilitation.

Wages have been relatively flat so far this year, perhaps dropping a little, but not a major decline, said John Restrepo, principal of RCG Economics in Las Vegas.

"What always concerns us is when you adjust for inflation, those economic metrics are down to the late 1980s," he said. "That’s causing an erosion of purchasing power."

Highlights from the U.S. census report include the following:

■ Since 2007, the year before the most recent recession, real median household income in the United States has declined 6.4 percent and is 7.1 percent below the median household income peak of 1999.

■ Both family and non-family households suffered declines in real median income between 2009 and 2010. The income of family households declined by 1.2 percent to $61,544; the income of non-family households declined by 3.9 percent to $29,730.

■ Real median income declined for both white and black households, while the changes for Asian and Hispanic-origin households were not statistically significant.

■ Real median household income across the board has not yet recovered to pre-2001 recession highs.

■ The Midwest, South and West experienced declines in real median household income. The change in median household income in the Northeast was not statistically significant.

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