This story originally appeared in the Reno Gazette Journal
There has been a lot of talk recently about our growth. Many economic development and political leaders champion the growth as a badge of honor, yet many are starting to change their narrative to managed growth. I hope there is more of the latter, which EDAWN seems to be finally indicating. My last article addresses how government spending outpaces household incomes and the economy. An even more troubling consequence of growth is the inflation on our goods. Let’s face it, prices continue to rise. A lot.
Nevada was one of the worst hit during the recession, which typically means a stronger recovery, but that has not happened. Income may be the most vital economic indicator. Based on Census data, Nevada’s real median household income is down 16 percent since 2007. Despite all the job headlines, Nevadans still fall well below the national median income eight years into a recovery.
Most concerning is how much prices outpace income in Nevada. Rent, childcare and healthcare are just three core expenses with double digit increases in price in Nevada. Locally, the price of homes and rent increased year-over-year by double digits. According to the Truckee Meadows Housing Study, 55 percent of residents cannot afford a house in the median sales price range.
WalletHub’s Best & Worst States to Raise a Family ranked Nevada 47th. ChildCare Aware’s report ranked Nevada the least affordable in childcare in seven of eight categories. On average, a single parent pays nearly 30 percent of their income on childcare.
The Burden of Health Insurance Premium Increases on American Families Report cited Nevada as having a 27 percent increase in healthcare from 2009-2014. While wages remain stagnant, our expenses continue to increase much higher than inflation. This leaves families with nearly no discretionary income.
We must look toward policy and centralized economic development for these flaws in our economy. Nevada ignored small business and homegrown entrepreneurs, and we are now paying the price. The Kaufmann Foundation ranks Nevada last in the country in small business density and more businesses closed than started between 2010-2014. Excessive occupational licensing, Nevada ranks second highest in the country, to protect industries resulted in a lack of economic diversity. Henceforth, prices increased and business creation was limited. The Census ranks Nevada last in childcare facilities per 1,000 children. All one has to do is look at the egregious process it takes to watch more than four kids at a home to understand why.
While Nevada’s economic development policymakers continue to invest and focus on billionaires and flashy companies, the small business owners and entrepreneurs suffer. When they suffer, we all do. We have a shortage of supply in many of these areas, which drives up prices. The more difficult we make it for small business through erroneous licensing and taxes, the more this will persist. Nearly 80 percent of job creation comes from homegrown businesses. We can have dozens of Teslas in Nevada but it will not matter if our community cannot afford to live here.