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April 9, 2009
Gold-Plated Economy in Nevada Town Becomes Rare Beacon for the Jobless
By JIM CARLTON - Wall Street Journal
ELKO, Nev. -- Gold fever has inoculated this historic cow town from the state's economic malaise, making it an island of relative prosperity in a state flooded with unemployed workers.
While Las Vegas, Reno and other onetime hot spots reel from the real-estate crash and wider recession, this area's gold-mining operations are adding jobs and spreading wealth in surrounding Elko County. The area boasts 26,700 jobs, up from 25,500 a year ago, while Nevada has lost many jobs. Construction is up here, as are taxable sales.
There's a paradox, though: The unemployment rate in Elko County -- which has a population of 50,000 -- has risen to 6.4%, from 4.2% last year due to the "lifeboat effect." The town has become the last hope for jobless people streaming in from elsewhere in Nevada and beyond.
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Dennis Lane
Gold pour at Newmont's Gold Quarry Mine near Carlin, west of Elko.
"Holding your own looks like a beacon when everyone else is in the hole," said Robert Stokes, the Elko County manager.
Rebecca Haney, who in 2006 was laid off from her job in Dallas, drove in a month ago after two relatives in Elko told her about all the jobs. "I didn't even know where it was," she said. "I had to Google it." At the Elko office of JobConnect, a state employment agency, officials report that 1,500 people a month are seeking help finding work, up 50% from a year ago.
Elko's attraction is simple: Gold mines in this mountainous area of northeastern Nevada are thriving and in some cases adding workers amid stratospheric prices for the commodity. Barrick Gold Corp. has added 250 people to its Nevada operations over the past year, and expects to add an additional 300 jobs to its work force of 3,500 over the next several months, said Greg Lang, president of the Toronto company's North American region.
The mining companies are keeping the construction industry humming, in contrast to a near-shutdown of construction elsewhere in the state. Barrick and Newmont Mining Corp., which dominate the local mining industry, have built new office buildings in Elko with about 50,000 square feet each.
The Elko County Economic Diversification Authority started construction last month on a $14 million "railport" that is to house six new industrial tenants, and eventually create an estimated 1,400 jobs. One of the tenants, Pacific Steel & Recycling of Great Falls, Mont., has 38 branch locations in the West and serves mostly mining suppliers here.
"This is one of only four spots where we are still in growth mode," said Kelly Wilson, manager of the company's Elko operations.
The mines' prosperity creates ripples elsewhere in the local economy: Taxable sales rose 0.5% in Elko County in January, compared with a 12.9% drop for all of Nevada, according to the latest state figures. Median housing prices in the county are down 8.9% from a year ago, but that compares with a 17% drop in Las Vegas and 15.5% drop nationwide as of February, according to industry estimates. And Elko County's unemployment rate of 6.4% in February is the lowest in Nevada, where the rate has soared to 10.1%.
Ms. Haney, who drove from Texas, said she has found the labor market tough to crack. Jobs in the high-paying mining industry tend to require technical expertise, which she doesn't have. Openings for less-skilled jobs are drawing dozens of applicants. For now, the 38-year-old is waiting tables in a local restaurant.
The new arrivals are putting pressure on Elko's already tight rental-housing market. Although there are plenty of homes for sale, rentals are so scarce that landlord Holly Gregory reports zero vacancies in the 300 apartments she manages here. Across the state in Reno, by contrast, she said 36% of the apartments she owns are vacant.
The labor surplus is good news for the mines, which are running all-out amid gold prices of more than $800 an ounce. "I was in Elko earlier this week talking to our recruiters and they were processing 600 applications for hard-rock [underground] miners, and we are looking to hire 50 by year's end," Barrick's Mr. Lang said.
Denver-based Newmont's work force in the region is holding steady at about 3,500, with 40 to 50 positions open at any given time, said Dave Kern, the company's regional vice president of human resources. "Gosh, we are getting thousands of applications every month," he said. "Six months ago, we were beating the streets and doing job fairs."
Write to Jim Carlton at jim.carlton@wsj.com
Printed in The Wall Street Journal, page A11
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