By Tim Bradner
There is an overlooking strength in Alaska’s economy. It is the surprising durability of the state’s rural communities, even small and remote villages. Data from the 2020 census is now being pored through by demographers and economists and it showed that the vast majority of rural villages increased in population in 2020 compared with 2010, a trend that’s contrary to the narrative of increasing outmigration from rural to urban Alaska.
In fact, urban Alaska, the state’s larger communities, lost population, except for the Matanuska-Susitna Borough, which gained as part of a long-term trend.
Here’s why stable rural populations are important: It means there’s money there that is supporting people. And, this is important to larger Alaska communities because rural people make purchases in urban Alaska and spend money there.
This is all complicated, of course. State demographers say rural populations are growing because more babies are being born than elders dying. There’s still outmigration to larger cities but also a counter-migration of rural people who moved to town deciding that city life isn’t all it’s cracked up to be, and who go home.
It is important to know more about this, whether working-age adults and women of child-bearing age are moving or staying put. Analyses of Permanent Fund Dividend application trends will illuminate this, but that will take time.
For urban Alaska, economists at the state Department of Labor and Workforce Development can document a steady outmigration of working-age adults from Alaska to the Lower 48, where the economy is strong.
This decline is very concerning to business leaders who worry about having enough workers in 10 or 20 years, and it makes the apparent stability of rural Alaska, which are mostly Alaska Native, all themore important. This is where lot of our future workers may come from.
Meanwhile, what’s propping up rural communities? Where’s the money coming from?
The fact is we really don’t know. Anecdotally, we know that federal funds supporting local tribal services like health care support more jobs than they did a few years ago, and that dividends paid to shareholders by private Alaska Native corporations formed under the Native land claims settlement are increasingly important.
The growth and development of Alaska tribes is a relatively new development and will soon be even more important because much of the new federal infrastructure money for rural areas will be channeled through tribes.
Native corporation dividends are also increasingly important. Many of the corporations, which are private, are guarded about releasing financial data, which is their right. We do have information from the ANCSA Regional Association, however, that dividends paid to Native corporation shareholders in 2018 ranged from $300 to $3,700 per 100 shares, the amount depending on the financial performance of the corporation.
Although it is now dated, a 2012 U.S. General Accounting Office report to Congress said $165 million was paid to shareholders in total in 2010. Keep in mind that not all ANSCA shareholders live in Alaska, though most do, so only part of these dividends enter the state’s economy.
However, it’s likely that more of a Native corporation dividend paid in Alaska stays in the economy and is spent to pay bills and buy durable goods, than a state Permanent Fund Dividend (there’s evidence that some of the state PFD is simply saved or used for college tuition and never enters the economy, at least in urban Alaska).
We don’t have recent data but it seems reasonable to assume that ANCSA corporation dividends are contributing more to the rural Alaska economy because the corporations are doing well in their investments in out-of-state businesses as well as in-state activity like mining and oil and gas support.
Natural resource development on Native-owned lands is a factor, of course. The Red Dog lead and zinc mine in northwest Alaska, for example, is on lands owned by NANA Regional Corp., the regional Native corporation, and NANA shareholders working at Red Dog are help sustain small villages in the region.
But these don’t explain all of the stability of rural communities. After all, if rural Alaskans have more money they also have the resources to move, if they desired. It’s obvious that many desire to stay put, and they now have resources to do that, too.
There are a lot of reasons staying put, however, such as family and cultural connections. Also, a big legacy of the 1971 land claims settlement is that 45 million acres of federal lands were returned to Native ownership, a big part of these around Native communities.
Owning land doesn’t always mean exploiting it for financial gain. There’s also the simple pride of ownership and instinct to protect the land and use it to help preserve culture.
While the land claims settlement created opportunities to stay home, it also created a rich array of educational and professional opportunities for young Native Alaskans, and reasons to leave.
Many talented young people indeed went off to college and got advanced degrees, many from prestigious U.S. universities. Many of them brought their education home and today help manage the Native corporations and their subsidiaries.
Most of the corporate offices are in larger communities because that’s where most of the businesses they own are located. But the new, younger managers, now highly educated, still have roots and family in rural Alaska (and corporate boards mostly from rural regions), and have a bias, if not board direction, to help sustain the communities they grew up in.
This wasn’t always the case, of course. Until the new generation of educated young Native Alaskans took over these corporations were mostly run by non-Natives with little understanding or interest in rural Alaska.
That’s changing, and the web of corporation and tribal development now helping sustain small communities is a great strength for all of Alaska.
Tim Bradner is editor and publisher of the Alaska Economic Report
