In Nevada, Obama must overcome miserable economy

(CBS News) LAS VEGAS - The Nevada JobConnect office here on Maryland Parkway, a ten-minute drive from the bright lights of the strip, doesn't open until 8 a.m., but by 7:30 there's usually a line of five or ten people waiting to get in. Arriving after opening can mean waiting for an hour or more to get service, joining the other down-on-their-luck job seekers in the rows of chairs where the unemployed stare blankly forward and wait for their number to be called.

Among them is Yvonne Sandoval, who lost her job in accounts receivable in February after four years and four months of a steady paycheck. She says that, since then, she's sent out 52 resumes and gotten zero interviews; she's here to apply for placement in a computer training course paid for by the state, which she hopes will allow her to start providing for her two daughters again.

Sitting a few seats away is Ashley Smith, who lost her job in loan processing in March. She was making $12.50 per hour - a good wage in Las Vegas, even for a college graduate like her - but now she's living off $250 per month in unemployment benefits. She doesn't have a computer, so when she's home she uses her smart phone to look for jobs, which, she says, "takes a long time." Smith comes down here a couple times a week by bus, since, she says, she usually can't afford to put gas in the car.

"Over here if you're rich, you're rich, and if you're poor, you're poor," Smith says of life in Las Vegas. She found out she's pregnant a month ago but she can't let it slow her down. "I still have to find a job," she says.

Smith, who is African-American, says she regrets her vote for President Obama in 2008. She plans to sit this election out, having lost faith in the federal government to do anything to improve her situation.

"I don't trust it," she says. "I don't trust it at all."

The president will speak at the University of Nevada Las Vegas later today in an effort to win over - or win back - voters like Smith who assign him at least some of the blame for the sad state of the economy. It's not an easy task: The unemployment rate here is nearly 12 percent, the highest in the nation. The Las Vegas area, where almost three quarters of the state's population lives, was hit as hard as anywhere by the great recession, in large part because casinos dominate the economy; when times got tough around the nation and casino revenues plummeted, the unemployed had nowhere else to turn.

There have been signs of light: Visitor numbers have started to creep back up in recent months, and the sidewalks outside the Bellagio casino on the strip are crammed in the evenings with tourists, who wedge their way in for a better view of the fountain show. But room rates in the casino hotels remain low, signaling a desperation to fill empty rooms, and people aren't gambling to the degree that they did in better economic times. They're choosing to spend more time at the pool, and maybe take in a show, instead of pouring their money into the slots and roulette tables the way they used to.

"The restaurants are full, but people are spending less per head," says David Damore, a political science professor at the University of Nevada Las Vegas. Exacerbating the problem, a number of states have legalized gambling in hopes that the taxes new casinos generate will help make up for budget shortfalls, which has reduced the incentive for people to come to Nevada in the first place.

More than anywhere else in the country, the Silver State is where perhaps the two most crucial factors in the 2012 presidential race come into direct conflict. The first is the lack of a full economic recovery, which presumptive Republican presidential nominee Mitt Romney is using as his primary argument for why Mr. Obama does not deserve a second term. The second is demographic shifts here and throughout the Mountain West that have brought a rise in the influence of Latinos and urban voters, a phenomenon that has helped keep Mr. Obama competitive in Nevada despite the grim economic picture. Who takes the state will ultimately come down to whether the candidates can overcome the factors working against them: Romney must at least somewhat close the gap among the Latino voters who are largely rejecting him, while the president must convince voters like Smith that the poor economy is not a reason to elect someone new to try to turn things around.

Back at the JobConnect office, Yvonne Sandoval, the woman hoping for placement in a computer class, pauses when she is asked if she'll support Mr. Obama in November. Behind her, a few people peruse the job listings posted on the back wall, eyeing openings for heavy equipment mechanics and boiler maintenance technicians. The line at the front of the room, maybe 20 deep, is moving slowly, as the jobless wait patiently for their turn to check in and maybe get some help - anything - to improve their lot.

"I would like to," she says. "But I know he made a lot of promises he couldn't keep."

A Boom and a Bust

Between 2000 and 2010, according to U.S. census data, Nevada was the fastest growing state in the nation, with the population exploding by more than 35 percent. People were drawn to the city by the fact that they could live upper middle class lives here without much of an education - it wasn't uncommon for construction workers and bartenders to make $100,000 per year, enough to buy a nice house and maybe splurge on a motorcycle and big screen TV.

"People were flocking to Vegas in droves," said Mae Worthy, public information officer for Nevada Department of Employment, Training and Rehabilitation. The real estate market and gaming industry were booming, providing thousands of new construction and other jobs. "People were essentially telling their friends to come," she says.

That's over now. The construction industry has lost 90,000 jobs since its peak in 2006, and for the most part, they aren't coming back. There are no major casino projects currently underway - the action has shifted both to other states and to China - and the construction workers who came here during the boom are being encouraged to figure out what else they might be able to do.

The population in Nevada is perhaps the most transient in the nation, and some of the people who came to town when things were good have moved on. But in light of the downturn, many didn't see anywhere better to go. Some feel boxed in: The housing crisis here is the worst in the nation - according to online real estate site Zillow, 71 percent of Las Vegas homes are underwater - and it's nearly impossible for many to refinance homes that are worth far less than they once were. Unless they want to simply walk away, those who have managed to avoid foreclosure are stuck.

"In a normal downturn - and Nevada has a cyclical economy - there would be more out migration of some people to go other places," said Ken Lange, an organizational consultant who is married to state Democratic Party chair Roberta Lange. "And there's some sense that that didn't happen to the same degree. People didn't have a place to go because things were bad all over."

The economic situation would seem to suggest that Romney is well positioned to take Nevada's six electoral votes, which could prove crucial in what is expected to be a close election. (If you don't think both campaigns are desperate for the state, consider this: Campaign Media Analysis Group reports that presidential ad spending per electoral vote is higher in Nevada than in any other state.)

Debbi Somers, who owns a furniture rental and manufacturing business called Somers Furniture in Las Vegas, held two events on behalf of the Obama campaign in the 2008 cycle, including a fundraiser at her house with Bette Midler; last week, she hosted Romney in her large warehouse.

"There was so many promises made, and we have not felt it once," she said. "We have not gotten any help."

While Somers hasn't decided who she'll vote for, she says that after nearly four years under Mr. Obama, "we are struggling day to day to stay in business." Somers described Romney as "a businessman," arguing that "he has done the same things that we do."

Craig Lemoine, a Republican who drives a UPS truck in Las Vegas, said he is supporting Romney because of his business experience. Romney is "somebody that's been through it, who knows how to deal with money and the economy," he said. "Things are not looking too good since [Obama's] been there."

Yet polls show that Mr. Obama is either ahead or statistically tied with Mr. Romney in the state, thanks in part to its changing demographics: The percentage of the electorate that is Latino has risen from 13.3 percent to 17.3 percent in just four years, and Latinos tend to favor Mr. Obama by a significant margin. In addition, the population in the state is relatively young and urban - around 45 percent of Nevadans who don't live in the Las Vegas area live in and around Reno, leaving a relative few in rural areas - which also works in the president's favor.

One of Las Vegas' young, struggling Latinos is 21-year-old Celyna Velasco. Velasco has worked at a Ross Dress For Less since February, often for less than 20 hours a week. She can't get more hours, and her efforts to find a second job have been fruitless. She lives with her mother, a stockroom worker at Costco, and has had to take out loans to make ends meet. Last month she decided to apply to join the Navy, a decision she said was prompted by what she laughingly described as a kind of nervous breakdown.

"Finally I was just like, I don't want to do this anymore," she said. "I don't want to control my life...I want someone to take over my life. And who better to take over my life than the military?"

Unlike Ashley Smith, Velasco does not blame Mr. Obama for her situation.

"I hope Obama wins," she says, describing the president as "a really good family man" and noting that, like her, he does not come from a wealthy family.

"I don't blame Obama - I actually blame the ones before him," she adds. "He's a great man, he's a great leader."

Whose Message Will Get Through?

While Romney will likely benefit significantly from advertising spending by outside interest groups in the state, Mr. Obama has a major advantage when it comes to on the ground organization. Senate Majority Leader Harry Reid and the Nevada Democratic Party have built up an impressive turnout operation here, and the Obama re-election campaign has long been steadily building up the campaign operation it had in place from the 2008 race.

The Republicans here, meanwhile, are in disarray: Supporters of Ron Paul have essentially taken control of the Nevada GOP and are primarily using it to further their Libertarian cause, not help the presumptive nominee. Though Romney easily won the caucuses here in February, most of the Nevada delegates to the Republican National Convention elected last month are Paul supporters.

The Romney campaign and Republican National Committee responded to the takeover by setting up and funding what is essentially a shadow Nevada Republican Party called Team Nevada. This is the group that will do much of the hard work of turning out the vote, such as targeting voters and making sure they show up on Election Day, but it's being forced to play catch up.

"The problem is they don't have the nuts and bolts of voter outreach, they don't have an updated database, those kinds of things," said Damore of UNLV.

The messaging from both sides centers on ill-advised comments the rival candidate has made in the past: Romney is spotlighting Mr. Obama's comments in 2009 that struggling Americans should not "blow a bunch of cash in Vegas," which angered local business leaders.

"I'm counting on you guys to go out and make sure that you elect a president who tells people to come to Las Vegas, not to stay away from Las Vegas," Romney said last month.

Team Nevada spokesman Darren Littell said his side's focus will be on highlighting Mr. Obama's record and "making sure people know how dismal it's been."

"It's not that he hasn't done anything, it's that he's done the wrong things," said Littell. "His policies have made things worse." Outside conservative groups are amplifying that message, with the Karl Rove-linked Crossroads GPS and pro-Romney super PAC Restore our Future running ads in the state attacking the president. The group Americans for Prosperity is also assisting with the Republican ground game.

Democrats, meanwhile, are spotlighting Romney's comment that the foreclosure process should be allowed to "run its course and hit the bottom," a statement they say shows he is out of touch with the struggling middle class. Democratic assemblywoman Lucy Flores, who represents a Latino-majority district in Northeast Las Vegas, says Romney has made clear that he isn't "interested in helping those who have been hurt in this recession."

"He has a very clear record of sending jobs overseas, closing down companies, really being a person whose interest is really in protecting corporations and protecting the wealthy," she says. The president, she adds, "has been very clear in terms of who he represents - middle class America."

Danny Thompson, secretary-treasurer of the Nevada AFL-CIO, said his union is engaged in educating its more than 200,000 members about Romney's comments. Referencing what he called Romney's "scorched-earth mentality," he said Romney's foreclosure comments were akin to saying, "let them eat cake."

"On one hand, you've got somebody who says that I understand that working folks, we want to do something to help you keep your home and keep your stability, as opposed to somebody who says I don't care how much it hurts," added Ken Lange, pointing to initiatives championed by the president, including the Home Affordable Modification Program. Lange channeled what he said is Romney's message: "There are winners and there are losers. And you just happen to be a loser this time around."

Eleven percent of the Nevada population is Mormon, and Romney, who shares their faith, can count on them to come out for him in high numbers. Yet his campaign knows that it will have a hard time taking this state if it can't close the gap with Latinos, who polls suggest favor Mr. Obama by more than thirty points. Romney's hard-line rhetoric on immigration during the GOP primary will make that more difficult; conservative Latino leaders are counterattacking by spotlighting the fact that deportations are at record levels in the Obama administration, suggesting that fact shows the president is anti-immigrant.

Surveys suggest that Latinos, like all Americans, are more focused on the economy than they are immigration, however. That's why both candidates know that it is crucial that they make the case that they are better qualified than their opponent to do something to pull struggling Nevadans out of the deep and discouraging hole many now find themselves in.

"People over here are crying for help," said Velasco, the Ross clerk who decided that her best chance for a future was in the Navy. "And the government isn't doing anything to really help out."

This is the first of a series on CBSNews.com examining the key factors and the people in the swing states that will decide the presidency.