State of the Alaskan Economy
There’s an interesting article up by CNN Chief National Correspondent John King, that talks about Alaska’s economy. Alaska tends to lag behind the rest of the country in many things. When I first moved up here, I remember thinking it was like stepping back in time five years. But, unfortunately, the economy is catching up to us. We tend to feel isolated, insulated, and immune from the economic travails of the rest of the country, but here they come.
New numbers released Friday show that the state unemployment rate is 8.4 percent — up from 6.7 percent a year ago. The job market is so tight that the state now posts a caution on its Division of Employment Security Web site suggesting people not move to Alaska unless they already have work lined up.
“We have a fair amount of people who think that Alaska is the promised land, and they have misconceptions maybe about what is up here. And they load up the family and head out on the Alaska highway, and we want to encourage them not to do that until they have something lined up before they get here,” Gillespie said.
State economist Neal Fried says Alaska is often isolated from national economic trends because its economy is so different: manufacturing is for the most part limited to seafood processing, and the economy is built mostly around the energy sector and federal spending on the military and other government installations.
But the numbers don’t lie. “We are part of it like the rest of the country is,” Fried said. “We are and appear to be more attached, to be more affected by this recession than we’ve ever been in prior recessions in this country.”
I’m happy to report that we are still miles ahead of the lower 48 when it comes to drive through espresso stands. But lattes alone do not a vibrant economy make.
Set your alarm clocks early. More discussion on the Alaskan economy will broadcast Sunday morning on CNN between 5am and 7am Alaska time.
My county here in Kentucky was at 15.8% in August (latest numbers available).
That’s just the peeps who are getting unemployment benefits.
sigh
I’m wide awake in the middle of the night because a pack of coyotes just tried to attack the barn…sigh..
drive-through espresso stands???
lattes???
hmmmmm…
Justa I used to hear them running thru the fields on the farm we lived on a few years back,We had to watch our dogs at all times just in case.Justa I can’t believe with unemployment that high your senators are not fighting full force for another extension,We sure don’t need or want another depression like era where people were riding the rails and living in dumps ect.It seems like the people in congress don’t care that a lot of people are down to their last few dollars.I read,when I looked up the latest news on the extension that it should come up next week.People were writing and saying they were down to a loaf of bread eating three slices a day keeps you from starvation or so one poster said.
The last time I was up in Alaska which would have been I think in 2006 A woman that had gotten a job online in a medical facility up there helped me at the airport in Seattle,otherwise I don’t know what I would have done.That airport is way different then ours or many others I have been at ,underground trams ect.She said she just needed a change so she found a job up there.We sort of helped each other as she pulled my suitcase and we put her back pack on top.Thank God family met me at the Anchorage airport.
Sweet, we are on track! Desperate folks will work for substandard wages (in days gone by they would organize). So if the Canadians that own many of the profit centers in Alaska (Agrium, Brown Jug, The Red Dog Mine [Teck Cominco Ltd.], to name a few.) Rock on and smile clueless Alaskans.
So if the Canadians that own many of the profit centers in Alaska (Agrium, Brown Jug, The Red Dog Mine [Teck Cominco Ltd.], to name a few.) Rock on and smile clueless Alaskans.
So if the Canadians that own many of the profit centers in Alaska tell us to shit, we shit (sorry to be so blunt). What we, as Alaskan’s should be doing is organizing into unions, cooperatives and collectives to stem the tide of corporate monies that are stifling real growth in our state. Maybe our legislature should consider legislation that favors businesses owned by Alaskans? But then that’s something that our elected reps have recently ignored.
Department of Labor statistics put unemployment at 17% when you include people who have given up looking and people who have taken part time jobs while needing full time. Even then, the figure doesn’t include those who didn’t receive unemployment comp. In my state, many people were self-employed, worked on commission, or held two part time jobs to survive. None of them are counted in the unemployment figures, even though they now have little or no income. The SSA reports that the number of people claiming early SSA retirement benefits has risen drastically, too.
I think we’re at 20% nationwide average when you count everyone.
#3 justa: Heck, they’ve got drive-through espresso stands in Sonora (CA) — population of the whole “metro” area is about 20K (the whole county is 55K).
BTW, I feel your pain. A couple of days before your DH’s encounter with the whitetail, my 17-yo swerved to miss a deer (well, that’s his story, anyhow) and went in a ditch with the truck. Besides the usual bumper and trim stuff, he managed to find a tree limb with the windshield. I’ve never replaced a windshield, so this should be fun.
Anchorage, in 2005 had more coffee shops per person than any other city – 3 per 10,000 people.
“Drive down Old Seward from Huffman to 36th Avenue. You’ll find, on average, a coffee opportunity about every 2,000 feet. Shack-wise, here’s a rough line-up from south to north: Perkup Espresso, Cafe Loco, Bad Ass Coffee, Bean and Bagel (in the Light Speed Lube Center), Kindred Spirits, Java Junction, Mocha Masters, Java King, The Jerky Cache To-Go Espresso, and Motor Mocha. There are also two Kaladi Brothers, a Dino’s Donuts and a drive-through Starbucks.” The rest of the article is here:
http://www.popmatters.com/pm/article/anchorage-alaska-coffeetown-usa
Remembering the late 80s in Anchorage can still bring a knot to my stomach. It’s interesting — when YOU are the one who loses in a bad economic turn, it effects all of your senses and lasts a lifetime. I watched businesses close every day — big ones — and my career go down the you-know-what. I took a “sabbatical”, went back to college at 45, and reinvented myself.
What followed was a solid 7 years in a job that I would have loved for my entire career. If it can happen to me, it can happen to countless others.
But, let me say — YOU DON’T FORGET! And, that’s why so many of our parents were so frugal after going through the Depression. Survival skills don’t leave you.
How the Alaskan economy fared during tough economic times has always intrigued me. Every since I was a kid people have said we are insulated up here from the worst. Maybe so. The last big national economic slump, before this current one, took place in the early 1980s during the Reagan presidency. We completely missed that one as Alaska was on a role then. Oil royalty returns were bloating the state coffers, the permanent fund was created along with the dividend program, bonus checks for all, spending was going crazy, i.e. “Projects 80” in Anchorage, also in Anchorage, the most flush police/fireman retirement fund in the world was established (15 years and out). In fact, there was unsurpassed state revenue sharing for all Alaska communities. Whether they deserved the applause or not, every mayor and city manager was a hero. Hard to find discontent when money is being thrown around like confetti. Life was good.
As the pipeline construction boom wound down in the latter 70s that prosperity was replaced by production royalties the magnitude of which caught us all by surprise. Most thought the trees would never stop growing, but we received our own comeuppance beginning in the late 80s when the price of crude was demolished; precipitating the end of the fat days and dough blowing economic bubble. This resulted in many bankruptcies, shattered lives and a huge exodus of workers from the state. The bumper sticker: “Please God let there be another oil boom, I promise not to piss it away this time.” said it all.
Looking back at the big one that following the roaring 20s, Alaska, according to many accounts, pretty much escaped that one too. However, a close inspection of the people and times then raises questions. Then, the Prudhoe Bay of Alaska was Kennecott Copper Corporation’s mine in the Wrangell Mountains. That mine closed down forever in late1938 but it had already pretty much shut down in the early 30s for three or four years due to the very low market for copper ore. Only a skeleton crew was left during that time and most of the personnel were furloughed. Most unemployed returned to the states. I know of a number of folk living here then said they knew the economy was tough outside but decided to leave anyway. They quickly found that things were a lot worse than they imagined and came back in a hurry.
It appears to me that it is true that Alaskan’s were pretty much self sufficient then, except for food and medical staples, which continued to be accessible from the states even during that great depression. There were dairy farms around much of Alaska then. Folk grew their own vegetables and stored them during the winter in root cellars. Along and close to the coast fisheries provided plenty. Fire wood provided energy. Wild game supplemented those portions of the diet that could not be transported by ship from Washington State. All sorts of commercial fishing enterprises made out well. In addition there was mining, trapping, fur bearing animal farming, logging and sawmills all of which contributed to making a fairly stable economy for Alaska.
Today though, I tend to agree with Neil Fried’s observation: “We are and appear to be more attached, to be more affected by this recession than we’ve ever been in prior recessions in this country.”
The State of Alaska had to react accordingly and let people know not to rush up here during the pipeline days as well; the Dept. of Health and Social Svcs. had questionnaires for people to fill out and warnings everywhere that to come here at that time without any money or promises of job was indeed a leap of faith.
It was like a mini-goldrush and the social services sky rocketed. I appreciate people being given a fair chance to make informed decisions before boarding the ferries and planes for jobs to nowhere.
The Dept of labor forgets to check their own Job Centers. The jobless rates are always higher than what the official stats say because of those who have given up, not eligible for unemployment, seasonal labor, subsistence or other non-cash activities, etc. There are certainly scientific ways to get a more accurate view of the economy in Alaska (and in New Mexico, another state with problems of reality vs official data that also needs analytical anthropology applied to issues).
The Job centers received inquiries from out of state last December 2008. At that point, there were many from out of state who believed–
*pipeline jobs were going begging [pipeline was completed in the 70s, no?]
*fishing jobs were lucrative and everywhere
When told that hundreds were in the Job center that very moment looking for those vacant jobs, the response was “Alaskans don’t want to work but I am”.
Callers wanted to know how to find the jobs because they were flying in next week. When told there were too many homeless now (and the shelters were refusing newcomers because over capacity) the response was “Well, I can just camp out.” And, “I’ve camped in the snow before.”
While the Job center front counter staff were explaining that no one should come to Alaska without a year’s money in hand (that’s $2000 per month for a minimal standard of living in Anchorage, as estimated by the state), the former Governor and the Dept of labor and the Newspapers were extolling how many jobs go begging and how we need to train more carpenters and truck drivers.
This was all before the summer began. In summer, the 7A bus inbound was just full of those just off the turnip plane, all going to the job centers to get those fishing, pipeline (construction, driving) jobs. Oh, and asking for the list of homeless shelters. How many cheap tents were sold by Wal-Mart this summer (on day 2 note how many people had tent boxes they were carrying around town)?
Anyway, this is October 2009 and so it has taken 10 months (or more) for the City and State (and school district) to begin to catch up. Will ADN.com continue to publicize how good a job market Anchorage is and not report the other studies which say it’s the worse? Will the City continue to ignore the homeless by focussing only on the few who are police problems? Will the state continue to ignore the Unorganized Borough?
When will we learn basic public involvement– let’s ask the true experts, i.e., people themselves, what’s going on and how to make things better? The signs were there in 2007 (if 15% of Anchorage up and left in 3 months, wouldn’t that indicate something of perhaps further reaching importance? It happened in other Alaska hubs.)
[Analytical anthropology works. Why we prefer to sustain misery unnecessarily always peeves me.]
Alaskan Sisu, October 18th, 2009 at 11:54 AM
People have NOT been given a fair chance to make informed decisions. In fact, I believe there has been a deliberate effort to mislead, through omission.
The best way to check this is to view public statements by the Governor’s Office in the past 2 years and compare to Census data. Unfortunately, on the ground data isn’t available.
PS– (can’t edit my own comment so, sorry for the extra posts) I suggested to ADN news desk and some of the Anchorage Assembly last winter that they needed to examine what was going on in the Job Centers. No one was interested.
The economy both here and down south is in a complete shambles. There is very little, if any, organic growth in the economy. Specific to AK, we are staring down the barrel of a very nasty decline. Assume about every oilfield job paying from $50k – $150k for in state workers adds at least 4 -5 service sector or ‘other’ jobs to the local economy. The oil companies have been laying people off all year long and capital budgets are already getting cut for next year. Sure, the oil bubble is getting re-inflated, along with the stock market, but that is just a by-product of Zimbabwe Ben, Tax Cheat Timmy and the rest of the O team’s ‘strong dollar policy’ (aka run the printing presses until the USD is completely worthless). In real terms, this is no good for business. Who cares if oil goes to $500 per bbls if the currency collapses?
There are two enormous problems with the economy that need to be fixed before anything will improve.
The financial ‘TBTF’ cartel must be broken. CEO’s that cratered their firms and ran weeping to CONgress need to be either thrown in prison or strung up by there necks to lampposts. The worst and most outrageous part about it that even though this depression has been going on for the better part of 2 years, nothing has been reformed! Banks are still allowed, nay encouraged to use dodgy, Enron style ‘mark-to-fantasy’ accounting, and the government has stepped in to backstop trillions of dollars of garbage loans for them. It’s like giving a blood tranfusion to a corpse in the hopes of reviving it! It makes no sense at all. All goverment backstops should be pulled immediately and all the scumbags on fraud street and K street that created this nightmare should be tried for treason.
The second problem is the Military-Industral-Security complex. Any country that runs a system that pays it’s corporate executives lavish bonuses and pays for-hire mercinaries four figure day-rates while it’s senior citizens watch their social security checks shrivel up and see it’s middle class get forcloused upon and sent to a homeless shelter deserves to come tumbling down. Fiscal conservative democrats and republicans always prattle non-sense about ‘we can’t afford healthcare for every citizen!’ What this country really cannot afford is to continue bombing brown people with our multi-billion dollar military toys on the opposite side of the planet and maintaining permanent military bases across the globe to protect western corporate profits and support puppet governments. Obama and the rest of the spineless jacklegs in CONgress need to get us out of the billion dollar boondoggle money pits of Afghanistan and Iraq before we really do bankrupt the empire. Of course, Boeing, KBR, Northrop, Blackwater and the rest of these big companies will never allow that to happen. Besides, the hole we’ve dug for ourselves over the past 30 years is so deep, for all intents and purposes, we’re ‘all in’ now anyway.
DF……I hear ya. There is hope in reinvention for many in our country, it often brings better work enjoyment than one had before.
Being frugal is always a good idea in my book.
But my heart aches for those who have already lost their homes and belongings, whole families are living on the streets.
Flyinureye, thanks for all your great art. I really appreciate viewing it. You have great talent. Thanks for your contribution!!!!!!!!!!!!!
RyanH said: “Assume about every oilfield job paying from $50k – $150k for in state workers adds at least 4 -5 service sector or ‘other’ jobs to the local economy. The oil companies have been laying people off all year long and capital budgets are already getting cut for next year.”
Well, I’d say to those in the oil industry to wake up, ever since Nafta we have been losing American jobs. The computer industry was hit big time. The same thing happened then, for every well paid high tech job that was lost it affected ‘other’ jobs that their income had supported. We were just coming out of that big high tech blow when wall street and the banking crisis hit the wall, the auto industry, all of this is affecting everyone’s job.
Granted, what I saw in Colorado was too many people living high on the hog of two good incomes, buying huge monster houses with ridiculous sq. footage that took loads of expensive new furniture to fill, driving big new gas guzzling suv’s, and probably in debt up to their eyeballs. I don’t live there anymore but I bet a ton of those big boom $300,000-$700,000 houses are on the market or foreclosed. I shudder to think of the house payment. Who would want to heat something that big after last years heating costs.
The good news for Alaska is that oil field jobs can’t be outsourced to Asia like every other industry. The Alaskan economy should remain solvent based on that fact alone. Sure it can crash, but it should never see an epic fail on par with California or Michigan. And let’s not forget mining, thanks to ‘Helicopter’ Ben with his helicopter printing press and the rest of the O team, gold should keep making record highs as the USD loses reserve currency status. Regardless of Pebble mine, there are plenty of other working mines in this state, and those jobs can’t be outsourced either.
I agree with the McMansion thesis. People in the lower 48 are learning the hard way, that just like they did in the 1930′s, an economy based on flipping houses back and forth to one another doesn’t end well, just like flipping tech stocks back and forth doesn’t end well either. But, that won’t stop the madmen at the levers of government and the Fed from trying to inflate the next bubble. The stock market is well on it’s way and they are doing everything they can to get the housing bubble floating again. Forget about ‘Cash for Clunkers’ and the ‘First Time Home Buyer Tax Credit’ for destroying the currency. Just clawback all the money they handed over to Government-Sachs, Citi Bank and the rest of the felons, then mail each citizen a million dollar check and be done with it.
On the Kenai Peninsula we also enjoy many drive thru espresso stands. I love it! And why doesn’t anyone while travelling outside know what a Bean Freeze is? I don’t know what the barrista does to make it, how am I supposed to tell the outside folks how to make it. Everyone up here seems to know what a Milky Way Freeze is though.
Favorite name for a coffe stand : Hallowed Grounds
The primary economic question continues to be, how do we make a stable, sustainable economy from dramatic boom-and-bust cycles? Instead of working so hard to attract mega-projects which ship our non-renewable resources out-of-state just a quickly as possible, perhaps we ought to be working to attract secondary and tertiary manufacturing industries, and provide them with as much low-cost non-renewable resource as they require. For us, it makes more sense to manufacture as close as possible to extraction of the resource, and stretch the life of our irreplaceable petroleum and mining resources.
Example. The fuel supply cycle to rural Alaska is a real puzzle. We take crude oil from Prudhoe Bay, ship it thousands of miles to refineries in California, take the diesel, put it in tankers, ship it to Unalaska holding tanks, offload an reload it into coastal tankers, ship it to Kotzebue, offload it and reload it into lightering barges, offload it into coastal holding tanks, then reload it into river barges and send it up the Kobuk river, to be sold at $10.00/gal. That is, sold at $10.00/gal approximately 300 miles from where the crude was originally extracted. Then we take our state revenue from petroleum taxes and use the money to offset the cost of fuel oil to heat Kobuk homes, schools, and clinics, and offset the cost of $2.00 / kwh electricity generated from the expensive fuel. All of this shipping, handling, distant refining, then shipping, handling and re-handling of both the fuel and the petroleum revenue has been the pattern for so long, we have come to think of it as ‘normal’. The TAPS pipeline and the Dalton Highway are less than 200 mi east of Kobuk. Just a little bit of the appropriate infrastructure, well-placed, and rural fuel oil becomes locally accessible and affordable, the cost of electrical generation drops, and our labor force benefits from the new employment.
Polarbear, you make alot of sense. It is too bad we are stuck in a turbo capitalist system and have to deal with things like ‘economy of scale’ and free market lunatics. We don’t always do what makes good sense, all the desisions in this country are based on what makes the shareholders the most money.
Ryan H……any industry can crash. The smart thing is to realize this. Don’t live beyond your means, and realize your job could be gone at any time. Could you survive and stay in AK making 1/2 what you do? Because it can happen. Don’t get secure in any job you have, they can all go away.
Say NO to Palin in Politics: Truer words were never spoken. I hear the voice of experience, and hope this discussion finds you and Ryan H well and squared away during these dangerous times.