‘We are still struggling’: Low unemployment cannot hide the impact of low wages and rising inflation | American economy

IIn the revolving restaurant atop the Strat hotel and casino, guests can once again enjoy $20 cocktails or a $90 shellfish display for two while admiring sweeping views of downtown Las Vegas from its iconic tower. After the Covid shutdown, Vegas is back in business. But not everyone seems happy, or sure how long it will last.

On a recent afternoon, just out of sight of the hotel’s 1,000-foot (350-meter) peak, a few hundred hospitality service workers were gathered in a nearby parking lot. In 90 F (32 C) baking heat, speakers told workers they must fight for better contracts and checks for soaring rents. “If, to puede“- yes, we can – they shouted outside the headquarters of the powerful Nevada Culinary Workers Union.

As housekeepers, chefs and other workers sang and sang throughout the meeting, there was no disguise of a deep sense of anger at their working conditions and the management of the company. ‘economy.

A cursory analysis of Nevada’s economic statistics suggests that life has recently improved for its members. Unemployment hit 30% in Las Vegas in April 2020 when Covid shut down the city – the highest rate in the country. Now it’s 5%, higher than the national average, but still a huge improvement.

Las Vegas has recently had the wind in its sails. Few cities have been so hard hit financially by the pandemic. Now the tables are open again, gambling revenues are hitting new heights, hotel occupancy is rising, conventioneers are back in town. But the atmosphere is tense. Worker after worker said they were still feeling the effects of the cuts made by their employers during the pandemic and were now suffering as inflation drove up prices and wages did not keep up.

“Everything goes up. Gas, food, rent, everything,” said Bellagio housekeeper Gladis Blanco. “But not our salaries. It is improving for companies but not for us: we are still in difficulty.

Gladis Blanco, housekeeper at the Bellagio Hotel in Las Vegas, attends a Culinary Workers Union meeting in the city. Photography: Mikayla Whitmore/The Guardian

In many ways, Vegas is a fun mirror of the deeply weird American economy. Nationally, the unemployment rate is 3.6%, near a 50-year low. Consumers spend and wages rise. And yet supply chain issues persist, businesses complain they can’t find staff, workers are unhappy with the way they’ve been treated during and after the pandemic, and tourists are unhappy with shortages and bad service.

Everyone is worried about inflation – which is rising faster than wages for many – and interest rates. The threat of a recession looms over all of this – a recession likely to be felt first in a city dependent on freewheeling spending, which is drying up as quickly as the water spilled on the hot Las Vegas Strip in lean times.

“Things are getting trickier every day,” said Brian Gordon, director of Las Vegas-based economic analyst Applied Analysis. “Las Vegas was ground zero for what the pandemic meant: casinos had never closed before,” he said. “Just as the recovery takes hold, global economic factors take hold. Global inflation, supply chain challenges, rising interest rates, all of this is putting downward pressure on spending,” he said. “It’s a very unique moment.”

In just five months, Joe Biden’s oddly good/bad economy will define America’s midterm elections — especially important in the swing state of Nevada, which only narrowly backed the president in 2020. greater tensions will persist. The pandemic has exposed a schism between American workers and their bosses, which has created a wave of labor organizing unseen in a generation – and that schism appears to have only widened since the pandemic was unofficially declared “completed”.

This lack of trust is widely felt across the United States. Some 42% of Americans told Gallup they were “very unhappy” with the size and influence of big business in 2022, up from 36% in 2019.

People wearing red t-shirts outside at a rally
Culinary Workers Union supporters take part in a rally in Las Vegas. Photography: Mikayla Whitmore/The Guardian

At the union rally, workers argued that their employers had taken advantage of the pandemic to lay them off and now wanted to bring them in for short shifts to save money, even as business was booming.

James Loreto, 51, has worked as a food server at the Mandalay Bay Hotel for 21 years. He was laid off in March 2020 and now, while officially back to work, he is on call for shifts. Some weeks he works two days, sometimes five. “I have to sit by the phone. I can’t do anything,” he said. “All this time, all these years – blood, sweat, tears – and I still struggle to put in my hours each week,” he told the crowd.

Like many workers at the rally, Loreto said businesses seemed to be doing well “after Covid,” but not so much workers.

“The casino is packed on the weekends and business picks up, yet so many of us still struggle to make payments to cover our health care,” he said.

Meanwhile, corporate executives “continue to sell, buy, expand and use their money so they can drive looking nice and clean while you and I are here in this heat,” did he declare.

A graph showing how the US median wage has steadily declined throughout the pandemic after peaking in early 2020.

The culinary union – which represents 60,000 members in Las Vegas and Reno – is pushing for legislation to limit rent hikes, which have reached up to 40% in the city. It’s a force to be reckoned with, knocking on 650,000 doors in the last election and claiming credit for Biden’s narrow victory in a swing state.

He will be out in force to back progressive candidates again in the next election, hoping for structural change. Similar battles will unfold across America as the election cycle accelerates.

At the Las Vegas Chamber of Commerce, there are similar concerns about the economy, but very different views on what went wrong and what can be done about it.

A man holding a red sign
A Culinary Workers Union supporter attends a rally in Las Vegas. Photography: Mikayla Whitmore/The Guardian

Its president, Mary Beth Sewald, will never forget how the pandemic shut down Vegas. “I’ve never seen that. It was actually a very scary and sad time,” she said. not a word to be taken lightly from a woman who lives in a city with a fake volcano, a pyramid and wedding chapels filled with Elvis impersonators.

Now that the lights have come back on, Vegas is still going through some weird times. “Demand has come back, but a lot of the restaurants, the larger properties, don’t have the employees to be able to handle the amount of demand,” she said.

Tourists agree. Friends Simon Payne and Nick Wadia, who came from the UK for a golf and gambling vacation, were very disappointed with Vegas hospitality. “We didn’t see a cleaning lady once. I had no towels,” Payne said. When interacting with staff they had been unhelpful and uninformed, they said. “They seem really unhappy with their job,” Wadia said.

They are also not impressed with the prices. “I paid $8 (£6.40) for a £2.50 (£3.15) coffee at home. Water was $7.90. The only thing they found cheap was gasoline: it now costs over $5 a gallon in Nevada, a huge increase for US consumers and up from $3.60 a gallon a year ago, but still plenty cheaper than in the UK.

A man wearing a red shirt stands for a portrait
James Lareto worked as a food server at the Mandalay Bay Hotel in Las Vegas for 21 years. He lost his job in March 2020 and is now back at work, although he is on call for shifts. Photography: Mikayla Whitmore/The Guardian

Sewald described Vegas’ hiring problem as a “headache.” Government stimulus checks were gone but, she said, people didn’t want to work. Childcare was a big issue and the chamber had made efforts to address this. But something bigger may be happening. Employers speculate that the pandemic has reordered priorities for many, especially millennials.

“I think there is a certain part of the population that says work and money are not our priority,” she said. “I talk to our members and they say we can’t find anyone who will come to work and do these jobs.”

She believes there may be worse to come. Staffing shortages have been compounded by inflation, which hits small businesses the hardest.

“It’s kind of the perfect storm,” she said. “When you consider inflation, the supply chain, the lack of labor, what else could you have? The cost of doing business has increased dramatically and immediately; now, with the inflation, these costs have increased further.

For Sewald, the answer is less regulation, not more. The chamber successfully lobbied to eliminate 85 bills it says would have increased business costs during the last legislative session and stands ready to do it again. “Many of our lawmakers mean well, but they don’t understand the unintended consequences of legislation.”

The chamber’s stance will put it at odds with the Culinary Union next November, another fight between employers and employees wrestling with the same issues but fighting on opposing sides.

Whichever party wins the November election will inherit an economic landscape as divided as the political landscape and an economy that could get worse.

Lareto fears for the future of his children. “Man, that makes me cry,” he said. “I have an 18-year-old boy and a 21-year-old boy. Their dreams are destroyed, something must be done. I see a lot of empty houses, displaced people, people sleeping in cars… We have to do something and we have to do something now.

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