Alaska’s Department of Labor & Workforce Development’s July issue of Trends discussed the Cost of Living in Alaska. The article is an annual favorite for Trends readers and shows how the cost of living varies throughout Alaska and compares to the rest of the nation. The news for 2016 was not terrible, in fact, it was the second year in a row that the increase in the cost of living in Alaska was under 1 percent.
Anchorage is the only community where inflation is measured. Components that play into the inflation calculation include energy, food and beverages, transportation, recreation, clothing, housing and medical. The first four in the list decreased in 2016, while the final three increased. In 2016, energy prices dropped by 5.8 percent, this decline has helped hold inflation low, especially in regards to categories that depend on fuel, particularly transportation and housing. Energy prices do play a role in the housing prices, it is more likely that the recession in Alaska is the reason that housing prices didn’t increase much in 2016. Housing prices did increase in 2016, but only by 0.9 percent. This is the smallest increase since 1988 when prices fell by 2.2 percent. Medical costs rose 4.5 percent, but are a small portion of the inflation calculation. Medical costs have increased an average of 4.1 percent a year over the past decade, with the largest increase in 2010 with a 5.7 percent increase.
Below is the average breakdown of an Anchorage citizen's household budget. Healthcare costs are very high in Alaska. The average monthly premium purchased on the individual market is $300 higher than the next highest state, West Virginia. It is over double the national average.
Alaska cities have high costs of living, but there are others that are higher. Anchorage, Juneau, Fairbanks, and Kodiak all rank on the Council for Community and Economic Research’s survey of more than 250 US cities. The survey publishes the difference in cost of common items between the cities in the survey. Items that are higher than the national average in the 4 Alaska cities include a can of peaches, iceberg lettuce, 2-liter bottle of Coca-Cola, whole wheat bread, a dozen eggs and a bottle of white wine. The items that on average are cheaper in Alaska are potato chips and rib-eye steak. Not surprisingly, but doctor and optometrist visits in Alaska are well above the national average. Going to an optometrist in Alaska will cost you double from the national average. A medical doctor visit is much higher as well, but not quite double the rate. Alaska is the 3rd most expensive state, behind only Hawaii and California.
The July Trends edition has a lot of great comparisons of cost of living, broken down in various categories. Housing prices, rent and house affordability are some of the categories highlighted in the report. You can find the rest of the article at the Department of Labor’s website.
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