As seen in Alaska Economic Trends, written by Neal Fried.
Data for the fourth quarter of 2017 show Alaska is still in a recession, at least on the statewide level, but the employment picture varies widely around the state. While statewide average monthly employment is down by more than 10,000 from 2015 levels, employment in nearly half of Alaska’s 29 boroughs and census areas actually grew over that period. (See Exhibit 1.)
The job gainers
Most of the areas that remain relatively unscathed by the recession lack direct ties to oil activity or large concentrations of state government employment, which includes the University of Alaska.
All areas benefit from a sizeable annual revenue stream from the state, the best example being the money local school districts receive from the State of Alaska, but school funding hasn’t yet sustained significant cuts, unlike state government budgets.
The areas that have added jobs since 2015 have large fishing or visitor industries, or both. Fishing and tourism are less susceptible to the effects of falling oil revenues — in fact, both industries benefit from lower energy prices.
Job gainers with large fishing industries include Dillingham and Prince of Wales-Hyder as well as the
Bristol Bay, Aleutians East, and Lake and Peninsula boroughs. Tourism-dependent areas include Skagway and the Denali Borough, which are home to the two most visited national parks in Alaska: the Klondike Gold Rush Historical Park and Denali National Park. Ketchikan and Hoonah-Angoon have fishing plus tourism.
Valdez-Cordova is the Trans-Alaska Pipeline terminus but is also home to the important Prince William Sound fishery. Despite its oil ties, the area gained a small number of jobs over the period.
A few areas, most notably the Matanuska-Susitna Borough, gained total jobs over the period but began to lose jobs late in 2017, so it remains possible that the recession’s effect on some places is simply delayed.
The job losers
Four areas sustained the largest job losses between 2015 and late 2017: the North Slope Borough, Anchorage, the Kenai Peninsula Borough, and the Fairbanks North Star Borough.
North Slope lost the largest number of jobs by far, all tied to the oil industry. Oil-related employment on the North Slope hit a peak of 13,485 in March 2015, then plummeted to just 8,228 jobs by November 2017.
Anchorage, headquarters to the state’s oil industry, shed jobs as its oil industry and state government both contracted, a story that also played out in Kenai. Fairbanks had both of those plus the added blow of deep cuts at University of Alaska Fairbanks. UAF lost more than 400 jobs over the period.
Juneau, the capital, lost 350 jobs in its large state government sector.
Not all areas’ losses were casualties of lower oil prices. Losses in Kodiak and Sitka were due to volatility in local fisheries rather than oil or state government, for example.
Neal Fried is an economist in Anchorage. Reach him at (907) 269-4861 or [email protected].
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