Diversification’s unhappy history: Part V

Some of the state’s most powerful interests have long fought broadening Nevada’s job base

By Steven Miller
  • Wednesday, March 2, 2011

Although Nevada lawmakers regularly call for diversification of the Silver State economy, they themselves, partnering with special interests, have raised the most formidable barriers.

So institutionalized is resistance to newcomers in state law and policy that few politicians appear to recognize it. Rather, they see the insular policies they pursue as "protecting" their established, organized constituencies.

The first four parts of this series detailed the prolonged efforts, over many years, by the Nevada Resort Association — the dominant segment of Nevada's dominant industry, gaming — to discourage new non-gaming businesses from entering the state. To this, virtually no lawmakers have publicly objected.

Unfortunately, similar patterns exist for almost every large Nevada employer — whether public or private.

On its website, the state Department of Employment, Training and Rehabilitation (DETR) lists Nevada's 20 largest employers. In nearly every case, those organizations have actively used the political process — and the resulting legislation — to impede diversification of the state's economy.

According to DETR, the Clark County School District, with over 30,000 employees, is by far the largest employer in Nevada. Second-largest, with more than 8,500 employees, is the Washoe County School District.

For decades, both districts have deployed all of their ample political resources to maintain and, at every opportunity, expand their monopoly control of public K-12 spending in the state's major cities.

By now the legislative session routine is familiar: Everyone with any stake in the current distribution of tax dollars enters the political fray. Teacher, administrator and other unions, contractors, architects and other vendors — all beat the drums to keep the river of tax money flowing to themselves.

Even tiny, unwitting children in the primary grades get cynically harnessed to the bandwagon — directed, each legislative session, to send cutesy messages to lawmakers nagging for the ever-greater boodle for which administrators and unions always cry.

Because the districts can translate their huge financial shadow into political power, the educrats have rolled merrily on, decade after decade — over the hopes and dreams of hundreds of thousands of Nevada kids and their parents. Critically needed reforms never happen, while the funds that most Nevada parents would use to send their children to private schools if they could, instead whirlpool down the same old drainpipes.

By foreclosing such alternatives and keeping most Nevada students chained within the state's subpar school system, the message lawmakers send to families thinking of moving to Nevada is unmistakable: "If you are not already wealthy, you most likely will be disadvantaging your children."

Fatuously, the educrats now pretend that money from a new tax, flowing into their pockets, would suddenly produce shining schools upon our hills, enticing captains of industry, like flies, into the state. But captains of industry — not being flies — would instead recognize the larger message of any such tax increase: that Nevada remains in the grip of a zombified leadership that does not learn from experience.

For higher education in Nevada, the story is similar. The University of Nevada, Las Vegas is Nevada's 12th-largest employer, with over 4,500 employees, and the University of Nevada, Reno is Nevada's 16th-largest employer with over 3,500 employees. By massively subsidizing per-student costs at state universities for decades, lawmakers ensured those institutions had immense, government-granted monopoly advantages that essentially exempted them from any serious in-state competition. Although superior, private institutions from outside the state explored the possibility of entering Nevada, they found the absence of even a somewhat-level financial playing field just too inhospitable. Benighted policy thus not only barred the entrance of world-class private universities but also any industries that might have followed those schools into the state.

Unfortunately, using the law to foreclose alternatives and inhibit others' freedom to innovate permeates the thinking of most of Nevada's largest employers, whether public or private. Of the 20 organizations on the DETR list, all are casino resorts (12) or subdivisions of government (eight). And among the resorts, only The Venetian and The Palazzo are not in the Nevada Resort Association.

Notably, 18 of the 20 — again with the exception of The Venetian and The Palazzo — are highly unionized. And union collective bargaining, at root, is the predatory notion that 51 percent of employees in a workplace should be able to foreclose the rights of all other employees to negotiate their own salaries and working conditions.

To no one's surprise, private-sector unions, on the policy front, have used their political leverage to pursue similarly predatory objectives — goals they think may advantage them in the short run, no matter the larger harm to the community.

Prominent examples include:

State lawmakers — forever complicit in special-interest schemes to evade competition — bear primary responsibility for economic diversification's sorry record in Nevada.

An interlocking network of government-enabled fiefdoms is a poor substitute.

Steven Miller is vice president for policy at the Nevada Policy Research Institute. For more visit http://npri.org.

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