Alaskanomics

Third Quarter Employment Numbers

The employment numbers for the third quarter of 2019 show that employment has continued increase throughout the state and the unemployment rate remained relatively flat for the quarter.

In July, employment was up 0.5 percent, approximately 1,800 jobs from last July. Construction continued to see the largest gain with an increase of 600 jobs for the month. Oil and Gas was not far behind with an increase of 500 jobs. Growth was steady in the private sector, but there were still areas to see a decrease. Financial Services and the Information Sector lost 400 and 300 jobs, respectively.  

Within the public sector, both Federal and State jobs increased with 400 and 300 more jobs than in July of 2018, respectively. A lot of the job growth came from an increase in staffing due to a busy fire season. Both the Alaska Department of Natural Resources and the federal Bureau of Land Management added jobs during the fire response.

Alaska’s seasonally adjusted unemployment rate fell to 6.3 percent in July, which was still higher than the national rate of 3.7 percent.

August’s employment growth was only slightly up from August 2018, but there was still an addition of about 400 jobs, which is a 0.1 percent increase. Construction and Oil and Gas added the same amount of jobs in August as they did in July. Manufacturing and Financial Services saw the largest loss, each losing 300 jobs.  

In August, the seasonally adjusted unemployment rate dropped slightly to 6.2 percent, while the national rate remained at 3.7 percent.

September saw another large jump with an increase of 2,000 jobs, which was a 0.6 percent increase over September 2018. Construction continued its large gains adding 800 jobs over last year. Oil and Gas and Leisure and Hospitality also grew with 500 and 400 jobs, respectively.

State government lost 400 jobs from last year, mostly due to cutbacks at the University of Alaska due to significant cuts in state funding.

The seasonally adjusted unemployment rate remained at 6.2 percent, but the national average dropped slightly to 3.5 percent. The not-seasonally adjusted rate followed the usual fall pattern with rates rising in nearly all areas of the state. Tourism and fishing drove a lot of the movement in the rates as things started to wind down for the winter.

Up-to-date employment numbers can be found at the State of Alaska’s Department of Labor and Workforce Development’s website.

Alaska's "Top 100" Companies Employ One-Third of Alaska Workers; $4.3 billion in wages

The Alaska Department of Labor reported on the Top 100 Private Employers in the July issue of Alaska Economic Trends.These ten companies employ one-third of Alaska workers and have a combined payroll of $4.3 billion.

The list has changed quite a bit since 1985, when ARCO, BP and Alyeska Pipeline were in the Top 10, along with Alascom, two banks, two grocery chains, and two health care organizations. Providence, which was on the Top 10 list in 1985, has been in the number one spot for the past ten years.  

ISER: Four Scenarios for Alaska's Future

Alaska's Institute of Social and Economic Research (ISER) has just released "Four Scenarios for Alaska's Future," a paper based on ISER's Investing for Alaska's Future research initiative. Author Scott Goldsmith describes four potential directions for Alaska's economy, given declining oil production, lower prospects for a natural gas pipeline, and challenges for petroleum development on federal lands and in federal waters.

We are the Chosen Ones or No Room at the Fishing Hole

This scenario relies on continuing good luck - high oil prices, the opening of ANWR to development, better royalty terms with the federal government, lower petroleum taxes leading to higher petroleum industry investment, and a gas pipeline to the Lower 48. These factors result in an "affluent Alaska economy" with some negative consequences, like traffic congestion and combat fishing.

The Big Crash or I Can Handle the Hangover because the Party was Awesome

In this "boom and bust" scenario, the good times continue for awhile, but the price of oil plummets and state government, which is 90% dependent on petroleum revenues - runs out of cash. State budgets are slashed, the Permanent Fund is tapped, personal income taxes return, and taxes on business increase. People flee the state for better economic opportunities elsewhere.

The Slow Squeeze or Up a Lazy River

This scenario envisions flat commodity prices as world supplies increase, reducing the calls for increased domestic production that might spur more development on federal lands. This scenario also assumes that Alaska is unable to craft a tax policy that stimulates investment, and instead Alaska's leaders adopt a "get it while you can" policy to maximize short-term revenue. The short-term surpluses are invested in dubious "economic development" projects that, like the projects before them, fail to live up to expectations. The economy shrinks and young people leave the state. Those who are left return to the pioneer Alaska lifestyle, living out their days enjoying the scenery.

Strategic Planning or Socialist Takeover

The fourth scenario envisions Alaskans actively managing the state's nonrenewable petroleum resources for the maximum benefit of Alaskans. Rather than let world oil markets, the federal government, or other outside interests determine Alaska's fate, the state's leaders look to the future and 1) maximize long-term revenues from petroleum production, 2) control growth in state spending, and 3) diversify revenue sources. Following this scenario would result in less petroleum revenue and state spending today in exchange for a more stable future with benefits for future generations of Alaskans.

While ISER points out that these scenarios are not predictions, the paper describes each scenario in detail, supported by examples from Alaska's history. Read the full paper here.