CHANGE IS THE ONLY CONSTANT

In 1849, French writer Jean-baptiste Alphonse Karr wrote, “plus ça change, plus c’est la même chose” – the more things change, the more they stay the same. Karr was a teacher, journalist and novelist, not an economist, but his statement could not be more relevant to our modern economy.

Change is the only constant.

During my brief career, we have weathered a number of recessions, one of them Great. We have persevered through acts of terrorism and natural disasters. We survived an unprecedented foreclosure crisis and a once-in-a-century pandemic. We have witnessed the longest economic expansion and greatest economic contraction in recent U.S. history. We have experienced both the greatest period of deflation and the greatest period of inflation in the past 50 years. Las Vegas set the record for the highest rate of unemployment for any metropolitan area in the modern era, and we have seen the housing market set both record highs and record lows.

Respecting the future’s inherent uncertainty, there are some emerging trends that can provide some insight into our next normal.

Population growth will slow. The U.S. birth rate has fallen by 20 percent since 2007. We are also seeing a modest decline in the number of people relocating to Southern Nevada. Our economy is geared for growth; we will need to adapt to slower growth rates moving forward.

Employees are not coming back. The labor force participation rate has dropped from 67.2 percent in 2001 to 64.2 percent today. At the same time, the age dependency ratio – the ratio of older dependents to the working-age population – has increased from 19 percent to nearly 26 percent in just the past decade, and the number of students in public schools and degree-granting institutions has shown signs of weakening. We are not training enough skilled workers much less enough engineers, architects, doctors, programmers or scientists - to keep pace with the growing number of people aging out of the workforce. We will need to embrace automation and other forms of technology that allow businesses to do more with less (e.g., telehealth).

Resources will define prosperity. Access to sufficient water and power resources will be the determinative factor in our community’s sustainability going forward. We will either embrace conservation and innovative resource development, or we will be defined by the limitations of existing supplies and be at the mercy of neighboring states and federal intervention.

Things will cost more. Most of the past ten years have been defined by a low-cost environment. Federal stimulus, historically low interest rates and a long correction in the housing market have left people longing for the heavily subsidized discounts we have enjoyed. Total public debt has increased from $20,500 per capita in 2000 to $91,000 per capita in 2022. This is unsustainable and is unlikely to be repeated during the next 20 years, meaning we can expect higher interest rates, higher taxes and fewer subsidies going forward.

Ready, set, go fast. The speed of innovation is accelerating at a dizzying pace. In today’s world, big fish don’t eat small fish, fast fish eat slow fish. The ability to embrace – and where possible facilitate – innovation will separate those who succeed from those who fail. Infrastructure, public safety, education and economic development are all ripe for rethinking. There will be missteps, and there will be failures. Our ability to embrace the pace of change and accept the uncertainty that comes with it may very well be the difference in our ability to be competitive by the middle of the 21st century.

I have no idea what this crazy world will throw at us next. What I do know is that our community is no longer the rookie upstart or the overachieving underdog; and, in this league, you need to be able to hit a curveball. The choice is up to us. The next normal will either be what we make of it, or we will be what it makes of us. I say we step up to the plate and swing for the fences.