What’s Happening in Vegas?

I doubt my sister would approve, moral angel that she is, but I’ve seen the future and it looks like Vegas. Maybe you can help me convince her this is a good thing.

The nickname for Vegas is “Sin City,” but did you know it wasn’t always thus? During the Wild West of the 19th century, Las Vegas was a sleepy Mormon outpost. In 1930, total population was 2,304, which is pretty much the population of my high school. This is from the Wikipedia entry:

Las Vegas started as a stopover on the pioneer trails to the west and became a popular railroad town in the early 1900s. It was a staging point for all the mines in the surrounding area, especially those around the town of Bullfrog, that shipped their goods out to the rest of the country. With the growth of the railroads, Las Vegas became less important, but the completion of the nearby Hoover Dam resulted in substantial growth in tourism, which, along with the legalization of gambling, led to the advent of the casino-hotels for which Las Vegas is famous.

The rise of entertainment as an industrial sector during the 20th century was probably never imagined. So when you think about the jobs of the future, you cannot help but notice the dramatic developments within our lifetime. Whole cities. Hollywood, Orlando, Las Vegas. Whole oligopolies: the NFL, the NBA, NASCAR, WWF. It’s not enough that television was invented as a new media devoted primarily to entertainment, but massively valuable cable channel brands have been established as subsets: HBO, ESPN, MTV.

For me, the one worth close attention is Vegas. Not until the legalization of gambling on March 19, 1931 did the radical innovation of growing an entire metropolis occur to anyone as goal. The city has essentially doubled in size every decade, reaching a quarter million residents in 1990 and half a million in 2000. It is bigger than Cleveland or Atlanta, and by the time the next Census is taken in 2010, it may be bigger than Boston or Seattle.

Again, Wikipedia:

The primary drivers of the Las Vegas economy have been the confluence of tourism, gaming, and conventions which in turn feed the retail and dining industries. Several companies involved in the manufacture of electronic gaming machines, such as slot machines, are located in the Las Vegas area. In the 2000s retail and dining have become attractions of their own.

So when people tell you that entertainment is an ephemeral economic foundation, that is all based on real money generated in other “real sectors,” just ask why Vegas continues to grow. In a world where food and manufactures are produced through automated processes, what is real?

Comments

[Michael F. Martin]

Gaming is unlike other forms of entertainment in that much of it requires face-to-face interaction. Transportation has gotten much cheaper over the period of Las Vegas's growth. One theory is that Vegas has grown as transportation costs have decreased. Clever use of psychology hasn't hurt revenues, but doesn't account for the growth. If that theory is correct, then we can expect that the high cost of oil, the main input to transportation, is going to hit Vegas hard.

I don't disagree with the larger point you're making here, which I would summarize as "services (like entertainment) can add value to an economy." But Vegas is the wrong poster child.

[Charles Johnson]

Whoa. What is real, indeed.

I have to wonder, though, if Vegas's growth will be forever thus, given the slow down in the construction markets.

Also, the state of Nevada is developing a reputation for corruption with its current governor in trouble. Might that adversely affect the business climate, given how construction markets are usually associated with corruption?

[Charles Johnson]

Hey Tim,

Thought you might find this article from The American written by Joel Kotkin pretty interesting. http://american.com/archive/2006/december/new-economic-map/?searchterm=Vegas

Here's the essential quotation. Notice how fast Vegas is expanding employment!

"Between 1994 and 2005, the Phoenix area expanded employment by 52 percent, Orlando by 48 percent, Charlotte by 31 percent, Boise 44 percent, Reno 36 percent, Houston 25 percent, and Las Vegas an astounding 86 percent. By comparison, New York City and greater Chicago expanded by only single digits, while the Cleveland, Baltimore, Detroit, and Philadelphia areas all lost jobs. It’s no surprise that many people—particularly in younger families—are moving out of the slow-growth cities."

[Charles Johnson]

If Gross National Happiness by Arthur C. Brooks is any guarantee, the people who ditch the commute may in fact become happier people. Seriously.

Robert VerBruggen reviewed it in the National Review Online and here's the essential paragraph.

"... In the average person’s day, the most miserable part is the commute to work. Marriage increases happiness, but kids decrease it."

So here's to hoping high gas prices means shorter commutes as folks don't buy those big homes up in the hills.

[Las Vegas]

Let's try this - Vegas will profit from the high gas prices because with all that money you're losing on transportation, people will need to risk it and try and win their money back. Eh? Anyone? Anyone? :)

[cheap cialis]

Betting exchanges allow consumers to both back and lay at odds of their choice. Similar in some ways to a stock exchange.

Greetings

[generic viagra]

I am curious to know why las vegas has become so affordable, so quickly. Yes I realize revenues must be down for the Casinos... but There still has to be a ton of jobs in that town.. Shouldn't they be one of the most robust economies in the country