Anne Macquarie: We make things here
Toward the middle of the Great Recession a friend who had lived in Carson City for a few years in the 1990s before moving to Santiago, Chile, visited us for a few days. He told me he thought the place didn’t look good. Run down, I remember he said. I was a little annoyed — who did he think he was, stopping by to put us down? But I had to agree, he was right. Empty storefronts, a general air of incipient seediness. The Great Recession was tough on Northern Nevada, and one reason why it was tough on us, I think, was we overbuilt. There was a lot of residential construction, and a lot of homes and mortgages were sold to people who couldn’t afford them. A bubble. The bubble burst, and with it went the jobs and the money.
Last week I read one of Forbes Magazine’s lists. I love the lists Forbes comes up with. I’m a list-o-maniac. Best small towns to retire in. Best states for entrepreneurs. Every week there’s a “top 10” something. But this one really caught my attention. This one was Forbes’ “American Dream Index,” an “ongoing state-by-state look at the trends in key economic indicators that show how the economic fortunes of America’s middle class are faring.” The state at the top of the list in the first month of their measurement in March was — Nevada.
Yes, Nevada, due to our “big gains in goods-producing jobs and construction activity” was No. 1. Does this mean another bubble? Construction jobs might pay well for a while, but there has to be an underlying economy on which they’re based. You have to build houses for people who have jobs in some more or less stable industry. Otherwise, it’s just another bubble.
I decided to do a little digging to see what the goods-producing jobs were. Well, of course there’s Tesla. Tesla’s $5 billion gigafactory, when completed in 2020, will employ 6,500 people. But right now just the construction of it staggers the imagination. Last week we sold our old Subaru to an electrician who commutes daily from Minden to Tesla. He told us his electrical contracting firm was one of 30 working at the gigafactory, and he’s heard Tesla is spending $1 million A DAY on electrical. He paid for the car with cash.
I could probably stop right there, because I think any regional economy where a guy with a solid middle-class job like electrician can peel off thousands of dollars in cash pretty much on the spur of the moment to pay for a car (you have to do that if you’re buying a used Subaru around here because they go fast) is an economy that’s in pretty good shape — but I’ll continue.
Tesla brought with it interest from other tech industries. Switch is building a $3 billion data center at the Tahoe Reno Industrial Center. Rackspace is building a data center in Reno that will have a $95.5 million payroll. Just this month Google bought 1,210 acres of land at the Tahoe Reno Industrial Center.
And more traditional industries are moving in or expanding too. Last week the Nevada Appeal reported Peri and Sons in Yerington is opening a state-of the-art cooling and distribution facility for the organic leafy greens the company grows in Lyon County. Peri and Sons and its partner company Nevada Fresh Pak have 440 full time employees and 1,600 seasonal workers and are the biggest employers in Lyon County. Dairy Farmers of America’s Fallon plant processes 1.5 million gallons of milk daily, turning it into dried milk it ships throughout the world. Mary’s Gone Crackers, a company that makes organic and gluten-free products, just moved its headquarters to Reno and expects to hire 200 workers by the end of this year.
So yes, it seems people are making stuff here and getting paid decently for it. Is there a down side? Probably. Housing and rental prices are going up. How soon will they be unaffordable? Are they already unaffordable for some families? Some people are commuting long distances because there isn’t much housing available close to the big job sites at Tahoe Reno Industrial Center, and inadequate public transportation. And is our educational system providing the education needed so these good jobs go to local people first?
But it seems to me using what we have — abundant renewable energy (a selling point for the energy-hungry server farms and tech companies that have renewable energy goals), proximity to a major interstate transportation corridor and markets and high quality of life — develops an economy that employs skilled workers at decent wages to produce real stuff and is a pretty good place to be.
Anne Macquarie blogs about clean energy and climate change in Nevada at nevadanscleanenergy.org.