Report Says Las Vegas Has World's Fifth-Worst Economy
Dec. 1, 2010— -- A study released by the Brookings Institution and the London School of Economics ranked Las Vegas' economy as one of the world's five worst, due in large part to oversized bets on real estate.
The only cities that fared worse than Las Vegas at 146 in their ranking of 150 metropolitan areas were Dublin, Ireland, Dubai, United Arab Emirates, Barcelona, Spain, and Thessaloniki, Greece. The rankings weigh jobs, job growth and income, comparing recent performance to pre-recession metrics.
Alan Berube, a senior fellow and research director of the Brookings Metropolitan Policy Program, said the characteristic the cities at the bottom of the list shared were their dependence on housing and the real estate market.
"Places like Dublin, Dubai, Barcelona, Las Vegas - all of those metropolitan areas got caught up in real estate bubble," Berube said.
In contrast, he said, the cities with the top ten economies were mainly Asian and Latin American cities that had been exporting raw materials and commodities that were in demand before, after and during the global recession.
Stephen Brown, director of the University of Nevada in Las Vegas' Center for Business and Economic Research, said that he believes the report is an accurate reflection of the economic situation in Las Vegas, but that it doesn't take into account Las Vegas' economic viability in the long-term.
The U.S. economy as a whole is still weak, but once the U.S. bounces back, Las Vegas will, too, Brown said.
"To me the Brookings report reads more of a Hollywood 'who are the hot actors right now' list," he said. "I would be surprised if investments would be made based on this list."
Robert Lang, director of Brookings Mountain West at the University of Nevada Las Vegas, tracks the growth and struggles of western cities like Denver, Phoenix, and Las Vegas.
"Where is Las Vegas compared to the last 20 years of performance? It's terrible. But it's still better than a place like Buffalo," said Lang. "This is a useful statistic, but it doesn't tell you what your opportunities are or where you're going."
The U.S. city with the strongest economic growth in 2009 -2010 was Austin, Texas, according to the report. The study attributes Austin's growth to its highly educated population, and like other Texas cities, Austin also largely sidestepped the housing crisis that crippled Las Vegas, Phoenix, and other U.S. cities.
