Welcome to the new normal, Nevada

The Nevada Department of Employment, Training and Rehabilitation sent out an email press release Friday morning reporting that the state unemployment rate for April stood at nearly 30 percent, the highest ever recorded and double the national rate.

The unemployment rate in Nevada was 28.2 percent on a seasonally adjusted basis and 29.8 percent on an unadjusted basis, compared to the national rate of 14.7 percent adjusted and 14.5 percent unadjusted.

Gov. Steve Sisolak, whose panicked order to shutdown most of the businesses in the state in overreaction to the little understood coronavirus, was quoted as saying, “Nevada is facing record high unemployment and the sheer numbers are difficult to comprehend. I am so pleased that DETR staff is working so hard to connect Nevadans to their benefits during this time, paying out more than 80 percent of eligible claims week over week. Nevada is working diligently to get people back to work as fast as possible, in a safe and responsible manner.” (Pay no heed to the fact the website that was supposed to allow unemployed gig workers to file was still down early today.)

David Schmidt, chief economist for DETR, pointed out that over the past year private sector employment in Nevada saw a 20 percent drop, while public sector employment fell only 3.2 percent. An attachment showed that the annual drop from April to April for the leisure and hospitality sector, which included shuttered hotels and casinos, fell 39.3 percent.

With slow phased openings being allowed and contemplated by Sisolak, don’t expect many of those jobs to ever return. Many businesses are closing permanently as owners go broke. Others that are reopening at half capacity or less and need only half as many workers, except for those doing the disinfecting of every touchable surface.

As jobless benefits expire and the jobs fail to return, expect many to drop out of the labor force entirely. That will statistically cut the jobless rate. Others can be expected to leave the state in search of jobs elsewhere.

A jobless rate of less than 10 percent in the coming two years may not be likely.

While the shutdown was an effort to flatten the curve of COVID-19 hospitalizations to avoid a crisis, in Nevada the curve was flat, according to records obtained by the morning paper. And according to DETR, health care jobs were lost, too. Health Care and Social Assistance jobs fell 11 percent year over year and Ambulatory Health Care Services jobs fell 17.7 percent. Hospital jobs were unchanged in April, but there have been reports that hospitals have laid off staff due to the ban on elective surgery.

Was this trip really necessary?

 

 

Governor’s reopening decision leaves workers in the lurch

Gov. Steve Sisolak has gone off half cocked again.

He has said that some of the businesses he ordered closed to prevent the spread of the coronavirus may reopen Saturday, but what if some workers fear for their health and that of their families? Will they no longer be eligible for unemployment benefits if they refuse to return to work? Will they have to take a pay cut?

According to the morning paper, Sisolak doesn’t yet have an answer:

As for employees concerned about being required to go back to work, Sisolak said that “is a very difficult situation.”

“If they’re offered their job back, and they don’t take their job back, their eligibility for unemployment comes into question,” Sisolak said, adding that the administration was working with Nevada’s federal delegation and the Labor Department on a fix.

“I want people to feel safe when they go back to work,” he said. At the same time, “a lot of people are going to go back to work and make less than the thousand dollars a week that they’re making now, and you can say, ‘Why am I gonna go back to work?’ Those are difficult situations that we’re going to be facing in the future.”

As for the high-minded life-is-more-important-than-profit stance Sisolak and other Democrats have taken, columnist Victor Joecks takes the current hypocrisy apart:

Make no mistake: Sisolak’s decision to move Nevada into Phase 1 will increase the number of coronavirus infections. “We would anticipate an increase in new cases if mitigation efforts are lifted,” state biostatistician Kyra Morgan said in an April email.

According to no less an authority than Sisolak himself, this is unacceptable.

“I am not going to allow our workers to be put in a position that they have to decide between their job, their paycheck and their life,” Sisolak said last month on CNN. “That’s not a fair position to put them in, and I will not allow that to happen.”

But that’s what he’s allowing to happen on Saturday. That’s what he did by allowing construction to continue on the Raiders Stadium — despite workers testing positive.

Sisolak isn’t the only one who’s promulgated this standard. “Georgia’s experiment in human sacrifice” was the headline of a piece in The Atlantic on the decision to reopen by Georgia Gov. Brian Kemp.

“I’ve said it before, and I’ll say it again: No one is expendable. No life is worth losing to add one more points to the Dow,” presumptive Democratic nominee Joe Biden tweeted Wednesday.

Sisolak’s actions on Thursday show how bogus this rhetoric is — and his own hypocrisy. Even he couldn’t live up to his own standard.

Yet the governor is requiring people to choose between a paycheck and their life without knowing all of the ramifications. Will unemployment be denied if they refuse to turn to work? That would be a key criteria in making such a decision.

Siam Square restaurant workers move tables to prepare for possible reopening Saturday. (R-J pix by K.M. Cannon)

 

Governor double talks, waffles and punts … or does he?

Governor talks out of both sides of his mouth and doesn’t say much specific from either side.

According to the morning newspaper, Gov. Steve Sisolak at a press conference Thursday talked about reopening some businesses — which he has ordered closed due to the fear of the coronavirus overwhelming the health care system, though it hasn’t — in some manner after certain unspecified criteria have been met by a date to decided in the future.

The third graf reads: “But Nevada will follow a ‘state managed, locally-executed roadmap’ that flexibly accounts for vast differences between the state’s urban and rural areas and allows for local decision-making and control, the governor said.”

Toward the bottom of the account, the paper quoted the governor as saying it “would be a disservice” to residents and businesses “to pretend like Esmerelda County is the same as Nye County or that Clark is the same as Elko.” It said Sisolak was forming a Local Empowerment Advisory Panel, or LEAP, which will “serve as a resource for counties as they work through the necessary requirements to reopen and share best practices and guidelines for local communities.”

What will be the authority and powers of this panel with the cute acronym?

A couple of grafs later the governor is quoted as saying the panel doesn’t mean counties will open at different times, “All counties will open in Phase 1 at the same time.”

Then why bother?

So, when will casinos open? Sisolak reportedly said that will be determined by the Nevada Gaming Control Board, adding, “Here’s what I can tell you today: Gaming will not be opening at the start of Phase 1.” Why? Didn’t say. But apparently that is not to be determined by the Control Board either.

Over in the newspaper insert, Sisolak was quoted as saying the Nevada Restaurant Association and the Nevada State Board of Cosmetology will be asked to come up with plans for opening restaurants and personal care shops. Whether he will pay any heed was not stated.

Gov. Sisolak at press conference Thursday. (R-J pix)

 

 

Is Sisolak practicing medicine without a license and violating state law?

Gov. Steve Sisolak issued the above press release announcing his order that doctors may not prescribe “two certain drugs” — chloroquine and hydroxychloroquine — to treat coronavirus patients.

In 2015 the state Legislature passed without a single nay vote a Right to Try law that states, “An officer, employee or agent of this State shall not prevent or attempt to prevent a patient from accessing an investigational drug, biological product or device that is authorized to be provided or made available to a patient pursuant to this section.”

Violation of the law is a misdemeanor.

Sisolak’s stated reason for issuing the order was to prevent hoarding, but that is being done by doctors wanting to protect themselves and their families.

Two doctors wrote in The Wall Street Journal recently that the drug in question in combination with another drug has been successful in curing 100 percent of COVID-19 patients in a small number of cases.

Is Sisoalk not only practicing medicine without a license, but also violating state law?

p.s.: The governor’s press release failed to include the verbiage in the actual regulation, which says, “The provisions of this emergency regulation do not apply to a chart order for an inpatient in an institutional setting …”

Pay no heed to the possibility that use of the aforementioned drugs just might keep a coronavirus patient from having to be admitted to a hospital. Isn’t one of the big fears the potential for hospitals to be overwhelmed?

 

Editorial: Keep a close eye on enforcement of virus regulations

Shortly after state health officials confirmed the first presumptive case of the coronavirus — dubbed COVID-19 — in Nevada this past week, Gov. Steve Sisolak issued an emergency regulation regarding insurance coverage for testing and treatment of the rapidly spreading virus.

State law gives the governor the power in emergency situations to make, amend and rescind regulations in response to the emergency. Customarily one thinks of such things as calling out the National Guard to prevent looting or other problems after a national disaster.

In this case the Commissioner of Insurance Barbara Richardson made a finding that an emergency affecting the health and safety of the public exists and that adoption of an emergency regulation was appropriate.

What Sisolak did was attempt to avert potential adverse financial impact for those who carry health insurance.

We highly recommend the governor keep a close eye on the effects of his order lest it have unintentional adverse affects on the availability of testing and potential vaccines or treatments for the disease. Dictating the price of things in the marketplace has been known to deter availability of goods and services when adequate compensation is not forthcoming.

There has been plenty of anecdotal evidence over the years that so-called anti-price-gouging laws merely limit the supply of necessary goods and services in a crisis.

For example, according to the American Institute for Economic Research, in 2005 a Kentucky man took time off from his job, bought 19 power generators, rented a truck and drove to hurricane-ravaged Mississippi intending to sell the generators at twice the price he paid to cover his costs and make a profit. Police confiscated his generators for price gouging, held him for four days and kept the generators in police custody. Those who urgently needed them and would have gladly paid the asking price suffered in the dark instead.

“This pre-emptive emergency regulation should give Nevadans confidence to continue taking preventative measures to stop the spread of COVID-19 as well as seeking necessary medical services and prescriptions without fear of higher than normal costs,” Sisolak was quoted as saying in a press release accompanying the emergency declaration. “Protecting Nevadans is my top priority, and adopting this emergency regulation is a critical piece of our broader plan to anticipate and prepare for the potential impacts of COVID-19.”

The press release said the order prohibits a health insurance company from imposing an out-of-pocket charge for an office, urgent care center or emergency room visit for the purpose of testing for the virus. “Additionally, the regulation prohibits insurers from charging Nevadans for the COVID-19 test itself or an immunization as one becomes available and further requires coverage for off-formulary prescription drugs if a formulary drug is not available for treatment,” the press release says.

Sounds confiscatory. If companies are prohibited from recouping their expenses for services provided, how readily available will those services be?

The regulation further requires health insurance companies to pro-actively provide information on available benefits, options for medical advice and treatment through telehealth systems and ways to prevent exposure to the virus.

With only a few cases in Nevada so far such measures may be premature. There have been no reports of insurance price gouging due to the virus that we are aware of, which is what the governor’s emergency order appears to be intended to stave off.

We suggested the commissioner of insurance and health officials keep a close watch on events as they develop to assure these shackles on the free market do not interrupt the availability of necessary services and thus create the opposite effect of what the governor intends.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Gov. Steve Sisolak announces emergency regulations. (R-J pix)

Newspaper column: Clark County teachers union pushing huge tax hike

The Clark County teachers union this past week launched two tax hiking ballot initiatives that would raise Nevada taxes by $1.4 billion — devastating the state’s economy and doing nothing to actually improve the quality of education.

One proposal would increase the Local School Support Tax — a part of the statewide sales tax — from 2.6 percent to 4.1 percent, a 58 percent increase that is estimated would raise $1.1 billion a year. If passed, in Clark and Lincoln counties the overall sales tax would jump from 8.375 percent to 9.875 percent, among the highest rates in the country. In Mineral, Eureka and Esmeralda counties, which have the lowest current rate, the tax would jump from 6.85 percent to 8.35 percent.

The teachers union said the money could be spent to reduce class sizes and counter teacher attrition — meaning pay raises.

Sales taxes are highly regressive. The poor pay a much higher percentage of their incomes, making the poor even poorer.

Also, the label Local School Support Tax is now a misnomer. The 2019 Legislature revamped the statewide school funding formula in such a way that local sales taxes no longer go to local schools. Assembly Bill 543 swept all local taxes into one statewide pool. Instead of simply funding schools on a per pupil basis, the money is allocated in such a way that more money goes to schools with at-risk pupils — such as English learners, children of the poor and those with disabilities.

John Vellardita, executive director of the CCEA. (R-J pix)

It is projected that the formula will drain money from rural schools into the larger districts, Clark and Washoe.

A recent article in the Lahonton Valley News about the newly created state Commission on School Funding reported that Elko County could lose $1,600 per student or nearly $16 million based on its nearly 10,000 enrollment. Douglas County estimated it would lose $8 million and Humboldt County about $4 million.

The other measure being pushed by the Clark County Education Association would increase gaming taxes by 44 percent overall and raise more than $300 million for the state’s general fund. The gaming tax for larger casinos would jump from 6.75 percent to 9.75 percent.

The Nevada Resort Association told the Nevada Independent, an online news outlet, that the tax hike would threaten jobs and damage the state’s economy.

The teachers union now has until Nov. 10 to collect nearly 100,000 signatures, with about 25,000 required in each of the state’s four congressional districts. If successful the two tax hikes would go before the 2021 Legislature and if passed there and signed by the governor could go into effect in July 2021. If not, the measure would go the voters on the November 2022 ballot and take effect the following January, if passed.

Gov. Steve Sisolak has yet to comment on the tax hike initiatives.

The voters were asked in 2014 to approve a 2 percent margins tax on businesses. The measure was rejected by 79 percent to 21 percent of voters. Despite this unequivocal rejection at the ballot box, lawmakers a few short months later passed a similar, though somewhat smaller tax called the Commerce Tax. The tax passed with a two-thirds majority of the Republican-controlled Assembly and Senate and was signed by Republican Gov. Brian Sandoval. That was part of a record $1.5 billion increase in taxes, specifically targeted to improve education.

The Clark County Education Association announced in November that the tax hike initiatives were coming. It raised its members’ dues in order to raise $2 million to spend on the petition signature drive.

The problem with throwing more money at education and expecting Nevada’s cellar-dwelling education outcomes to improve is that it’s already been tried. Since 1960 Nevada has tripled inflation-adjusted public education funding, but college entrance exam scores have actually fallen slightly.

According to the National Education Association, in the 2017-18 school year Nevada educators’ average salaries ranked 26th in the nation, but Nevada high schoolers have the lowest composite ACT scores.

While the teacher unions keep pressing for higher salaries and funding in general, they have been fighting every effort to toughen teacher evaluations and tie compensation to performance in the classroom.

Linking performance to compensation will improve education. If approached and asked to sign one of these petitions, we suggest you politely decline.

A version of this column appeared this week in many of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record — and the Elko Daily Free Press.

Editorial: New Nevada laws driving up the cost of doing business

Thanks to the Democrat-controlled 2019 legislative session it is going to be more expensive to do business in Nevada this year and in years to come.

The most expensive dictate from lawmakers takes effect July 1, when the first phase of Assembly Bill 456 kicks in raising the minimum wage in Nevada by 75 cents an hour. Currently the minimum wage for those with health insurance coverage is $7.25 an hour and $8.25 an hour for those without health benefits. The minimums increase to $8 and $9 this year and another 75 cents an hour each year until they reach $11 and $12 in 2024.

At the time of his signing the bill Gov. Steve Sisolak was quoted as saying, “Keeping working Nevadans stuck in a 10-year-old minimum wage erodes the real value and purchasing power of the wages of hardworking Nevadans. But with this bill, hundreds of thousands of working Nevadans will see a difference in their paycheck — extra hard-earned money they can use to put food on the table, save for their kids’ education, and re-invest into the economy.”

He did not deign to mention that some will go from minimum wage to no wage as jobs are eliminated and new jobs fail to be created. Others may see their hours cut to compensate for the higher wage cost. One study found the average low-wage worker in Seattle actually lost $125 a month when the minimum wage was raised to $15 an hour. Not exactly what the lawmakers and the governor foresee for Nevada.

Of course, raising the minimum wage raises the cost of doing business, which translates immediately into higher costs for consumers. A Cato Institute analysis in 2012 found that a 10 percent increase in the U.S. minimum wage raises food prices by up to 4 percent. AB456 increases the minimum wage in Nevada by more than 50 percent in five years.

In a recent article, the Nevada Appeal in Carson City quoted Johnny Skowronek, owner of staffing company Square One Solutions and incoming Northern Nevada Human Resources Association president, as saying he expects the service and retail industries to be hurt the most by minimum wage increases.

“Most bars, restaurants, casinos and retail operations pay minimum wage, and they are going to have to pass costs onto consumers,” Skowronek said. “The price of everything is going to go up without question in order to absorb this additional hard cost.”

Laura Jacobsen, an attorney with the law firm of McDonald Carano, told the Appeal some businesses are likely to layoff workers and/or move key personnel into salaried positions.

“Businesses are doing audits now on their pay scales to see how many folks they can continue to employ, whether they need to eliminate some positions, or have someone higher up absorb more executive responsibilities and be put on salary,” Jacobsen said. “It makes sense to streamline now if they can, but moving folks into supervisor positions, you have to make sure they fit the definition of a very specific exemption under the law. You might really have to tailor that job description and consult legal counsel to make sure (employees) are properly classified as exempt from wage per hour and overtime laws.”

Not only did lawmakers hike the minimum wage, but they also more strictly defined what health coverage is adequate to qualify for the dollar lower minimum wage. Senate Bill 192 requires that for a health benefits package to qualify for the lower-tier minimum wage it must include: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use services, prescription drugs, laboratory services, preventive and wellness services and chronic disease management, pediatric services and other specified coverage.

On top of that Senate Bill 312 now requires private employers with 50 or more workers to provide 40 hours of paid leave each year for full-time workers.

Additionally, Senate Bill 166 adds the threat of civil penalties for any employer who fails live up to the requirement of equal pay for equal work based on gender.

Lawmakers should stop trying to “help” Nevada workers with laws that can do as much harm as good.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Gary Varvel cartoon