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Las Vegas, devastated by the 2008 economic crash, struggles with coronavirus shutdown

Melissa Etehad and Lucas Kwan Peterson, Los Angeles Times on

Published in News & Features

LAS VEGAS -- It was just two weeks ago that Las Vegas native Carlos Rosales Jr. told his cousin that business at his new barbershop was doing so well that he was considering hiring a third apprentice.

After living through nearly a decade of financial uncertainty following the 2008 economic crash, the military veteran felt optimistic again. But that feeling evaporated last week when Rosales closed the barbershop following a statewide shutdown of non-essential businesses in an effort to contain the deadly coronavirus.

"I don't know how I'm going to pay my mortgage or car payments on my new truck," he said.

The virus has shaken Las Vegas' economy in an unprecedented way, ushering in a new reality for thousands of locals who only recently emerged -- some still battered -- from the last recession. Those who lost jobs and houses during the early 2010s carry those memories onto a precarious landscape of new economic challenges.

Asked to compare this to the 2008 financial crisis, which racked Las Vegas, Julie Langille, 45, a showgirl and entertainer for much of her adult life, said this is worse. "This is a little scarier. Before, yes, it impacted our industry, but it didn't shut our city down," she said. "It's never been that everything has to stop for a period of time."

In many ways, the Great Recession hurt Nevada more than any other state. Heavily reliant on tourist dollars, Nevada, where casinos blur in the desert heat, is viewed as an economic bellwether for the rest of the country. Driving the state's economy is Las Vegas, home to the Strip's $6.6 billion gaming industry and an estimated 2.2 million of the state's 3 million residents.

 

Around 186,000 people lost their jobs statewide due to the recession. Employment dried up, tourism stopped, construction projects stalled and people slid into foreclosures. The state was still reeling years after the crash; in 2015 Nevada led the nation in new foreclosures, according to RealtyTrac.

In response, the state set an ambitious goal to diversify its economy with financial incentives, tax abatements and workforce training programs. But after Gov. Steve Sisolak ordered non-essential businesses to close on Friday, threatening criminal citations for those that fail to comply, the coronavirus pandemic now threatens to serve as a critical stress test.

Back in 2009, Rosales was jobless for a year and his father, a construction worker near the Strip, lost his house to foreclosure. In recent years, however, their fortunes improved. With construction back on the rise in Sin City, his father bought two houses: one in 2014 and another one in 2017. And a year later the 35-year-old Rosales bought a three-bedroom house in Clark County.

Although his family weathered the last crisis, he's unsure they can do it again. He tries to keep his worries to himself; he doesn't want to frighten his wife and children.

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