Transatlantic Cities & the Future of Work
Las Vegas
From entertainment capital to drone capital and the Future of Work
In the coming years the workforce in Las Vegas and the state of Nevada will be the most vulnerable in the United States to rapid advances in technology and automation.
From its start as a dusty desert crossroads, Las Vegas has been defined by its pioneering mentality and a canny ability to reinvent itself. Once synonymous with gambling and the glitz and glitter of the Strip, the area has diversified into healthcare, logistics, renewable energy, data storage, and professional sports. Las Vegas has also become a magnet for workers seeking to reinvent themselves: in 2017, 4.9 people moved to the area each hour.
But technology is reinventing work everywhere, including Las Vegas. Robot bartenders and automated room service are just some of the flashy and potentially labor-saving technologies that have been introduced on the Strip. But new technologies will not only affect the area’s 300,000-strong workforce employed in gaming and hospitality. In the coming years the workforce in Las Vegas and the state of Nevada will be the most vulnerable in the United States to rapid advances in technology and automation.
With technology poised to forge new winners and losers, is Las Vegas preparing for the future of work? Can the city reinvent itself yet again, this time to reap dividends from technology and automation? Or will it miss the opportunity to benefit from the coming technological revolution? If policymakers fail to prepare for the opportunities presented by automation and artificial intelligence, the city will almost certainly remain stuck in the cycle of booms and busts that have defined its history.
In August 2018, the Bertelsmann Foundation teamed up with the National Association of Workforce Boards to explore how Las Vegas and its workforce are grappling with the future of work.
A Snapshot
The Las Vegas Workforce
The Las Vegas Workforce
A Snapshot
As of October 2018, the Las Vegas-Henderson-Paradise Metro Statistical Area (MSA) had a total workforce of just over one million, with unemployment hovering at 4.9 percent. But a disproportionate share of workers hold low-wage, low-skill jobs in the service sector, working as cashiers, gaming dealers, cleaning staff, and retail salespersons. Most of the tasks they perform are repetitive, which means their jobs are vulnerable to next-generation advances in technology and automation.
Despite attempts at diversification, in 2017 gaming and hospitality still accounted for seven of the top 10 employers.
Top 10 Employers in the Las Vegas Metropolitan Area | 2017
Source: Top 10 Employers in the Las Vegas Metropolitan Area | 2017: The Las Vegas SunWages in the MSA stand at $874 per week – $155 less than the national average of $1,029. Las Vegas is the 28th largest MSA in the United States by population, but it ranks 118th in annual wages. Average hourly earnings for specific occupations range from $13.47 for bartenders, to $10.56 for fast food cooks and $8.62 for gaming dealers.
a disproportionate share of workers hold low-wage, low-skill service sector positions(…) Since their daily routine often involves repetitive tasks, at least part of their work is susceptible to rapid advances in technology and automation.
In October 2018, the median house price in Las Vegas returned to a pre-2008 financial crisis high of $300,000, but wages are not keeping up with the rising cost of living. Nearly 38 percent of Las Vegas households are “cost burdened” by housing, with the figure jumping to 57 percent for low-income households.
Housing in the Las Vegas Metropolitan Area | 2017
Las Vegas Metropolitan Region | US Average | |
---|---|---|
Cost-burdened Households | 38% | 32% |
Cost-burdened Low Income Households | 57% | n/a |
Median Single Family Home Value | 300k | 216k |
Median Household Income | 55k | 59k |
Population Growth (2011 – 2016) | 7.3% | 3.7% |
-
Cost-burdened Households
38%
Las Vegas Metropolitan Region
32%
US Average
-
Cost-burdened Low Income Households
57%
Las Vegas Metropolitan Region
n/a
US Average
-
Median Single Family Home Value
300k
Las Vegas Metropolitan Region
216k
US Average
-
Median Household Income
55k
Las Vegas Metropolitan Region
59k
US Average
-
Population Growth (2011 – 2016)
7.3%
Las Vegas Metropolitan Region
3.7%
US Average
The Las Vegas area is home to 15 institutions of higher education, including the College of Southern Nevada and the University of Nevada, Las Vegas (UNLV). Nevada ranks ninth in the United States in job growth, with 54 percent of available jobs requiring some form of post-secondary education. However, only 30 percent of Clark County residents hold a post-secondary degree. In national comparisons, the state of Nevada ranks 46th in educational attainment and 43rd in “college readiness.”
Specific Forecasts
The workforce implications of technology and automation are notoriously difficult to forecast. While some studies envision a loss of around 73 million U.S. jobs by 2030, others predict that the introduction of new technologies such as robots and artificial intelligence will create a wave of new jobs.
65.2 percent of jobs in the Las Vegas area are potentially automatable (the highest percentage in the United States).
The impact of technology and automation in the Las Vegas area is evident in the results of recent studies. The Institute for Spatial Economic Analysis at the University of Redlands found in a 2017 study that 65.2 percent of jobs in the MSA are potentially automatable (the highest percentage in the United States). The study also shows that Las Vegas could see a 49 to 52 percent loss in wage share due to automation by 2035. More recently, the Organization for Economic Cooperation and Development (OECD) concluded that the percentage of jobs that could be eliminated by automation is higher in Nevada than in any other U.S. state. The studies found that areas with high shares of low-skill, low-income professions will face larger job losses and wage depreciation, with tasks related to administrative support, service, sales, and food preparation most vulnerable to automation.
Future of Work
In August 2018, the Bertelsmann Foundation and the National Association of Workforce Boards, in cooperation with Workforce Connections, convened nearly 70 stakeholders from Las Vegas and the state of Nevada to discuss the impact of technology and automation on the Las Vegas workforce. These conversations had three goals:
- Identify the challenges, strengths, and needs of the workforce as it faces the implications of technology and automation;
- Establish the baseline of a local policy discussion on how technology and automation are affecting Las Vegas;
- Highlight future of work approaches that are relevant to the issues faced by Las Vegas and other cities.
Stakeholder Map from Las Vegas Discussions
The Las Vegas Policy Puzzle
Las Vegas stakeholders emphasize the area’s “pioneering mentality,” which prizes individual responsibility and entrepreneurialism, in driving attitudes toward work, workforce development, and the future of work. Not unsurprisingly, this ethos is mirrored by political leaders and in public policy. But the consequence of this hands-off approach to the workforce has been neglect of education, training, and workforce development. This tension is exemplified by the erection of the state-of-the-art Las Vegas Raiders stadium: construction of the stadium will create 2,300 temporary jobs, but at a cost of more than $750 million in taxpayer money.
In keeping with this paradox, as the Las Vegas area vies to lay the groundwork for emerging technologies such as autonomous vehicles and blockchain, it still leans heavily on traditional incentives such as land and a low-tax, low-regulation environment to pick off opportunities from neighboring states such as California. Stakeholders point to the area’s “competitive advantages” of land, regulation, incentives, and taxes, while simultaneously sounding the alarm over a lack of focus on building a local mid and high-skill workforce.
However, there is tacit acknowledgement that the competitive “advantages” of today are not up to the challenges of driving tomorrow’s future of work. Luckily, the area’s pioneering mentality also brings openness to new technologies, which has in turn led to a buzz around their workforce implications. Las Vegas stakeholders recognize that the deck is being reshuffled, and that the time to rethink strategy is now.
In line with its entrepreneurial mindset, a core concern is how Las Vegas can position its workforce to benefit from advances in technology and automation. What types of economic activity will generate value? And how can workers in Las Vegas be equipped with the tools needed to capture a piece of the pie? There is widespread agreement that developing mid and high-skill opportunities hinges not only on creating or (or having access to) workers fluent in hard skills such as computer programming, but also in soft skills such as problem solving and foreign languages.
The space exists in Las Vegas to test innovative future of work solutions, but it is hampered by a culture of short-term investment
The other side of the chip, of course, is the area’s expanding pool of low-wage, low-skill workers, which poses long-term challenges. Stakeholders find themselves torn between making bold moves to attract next-generation opportunities, while struggling to devise inclusive policy solutions for the area’s stock of vulnerable service sector workers, who lack pathways to upgrade their skills and climb the career ladder.
The juxtaposition of present challenges and future aspirations sheds light on a wider set of policy challenges. Stakeholders disagreed vehemently when it came to prioritizing specific approaches and strategies. For example, should the focus be on upgrading the current workforce with soft skills and hard skills? Attracting industries and workers from other states? Creating jobs in sectors that will not be significantly vulnerable to automation?
Enter the political dynamics of the future of work. Las Vegas and the state of Nevada have a fluid political environment with relatively few bureaucratic hurdles, which means that the area could be fertile ground for bold approaches. But in order to double down, policymakers first need to be equipped with the skills and knowledge to respond to and develop policy. Even if there is broad recognition that technology and automation will affect the workforce, sound public policy requires strategic planning and long-term thinking. But the strategic planning that is so crucial to devising future of work solutions conflicts with the prevailing short-term attitude among local politicians and policy makers.
The space exists in Las Vegas to test innovative future of work solutions, but it is hampered by a culture that reflexively favors the short-term bet over long-term investment. With the effects of technology and automation already being felt in the Las Vegas area, policymakers have a narrow window of opportunity in which to forge a bold pathway forward.
Five Key Questions
What do you think Las Vegas should do?
Answer to these five key questions to let us know!
Las Vegas stakeholders identified workforce challenges ranging from
recreational marijuana to quality of life. Here are the top ten challenges:
Five Key Questions
What do you think Las Vegas should do?
Answer to these five key questions to let us know!
Las Vegas stakeholders identified workforce challenges ranging from
recreational marijuana to quality of life. Here are the top ten challenges:
Workforce
Strategies
Emerging strategies and approaches to the future of work for Las Vegas – and beyond.
Workforce
Strategies
Emerging strategies and approaches to the future of work for Las Vegas – and beyond.