A changing economy means Alaska’s jobs will change
What jobs will Alaskans hold in decades to come and what will draw new workers to the state?
ANCHORAGE, Alaska (KTUU) - Alaska’s state legislature needed a one-day special session to finally hammer out Alaska’s budget, but the deal finalized late last week does not solve the long-term revenue and spending issues affecting the state finances; issues that reflect the changing economic realities of the state, the declining — but still vital — role of oil production, an unsure future for the fishing and seafood industry, and population declines.
Those challenges directly relate to what jobs Alaskans will have to choose from in the future as well as what jobs might attract new workers to the state.
From the middle of the 1970s through the early 1990s, oil fueled a booming Alaska economy.
But the boom eventually receded, replaced by a growing realization that Alaska’s economic and budgetary reliance on oil will one day come to an end, according to state economic experts.
Dealing with that reality took up a major share of this year’s state legislative session; no deals were made, despite the talk, and the problem runs deeper than just the dollars and cents of next year’s budget.
Gov. Mike Dunleavy brought together legislators from across the political spectrum for a news conference on April 27 where all the participants agreed on the need for significant change.
“We are suffering as a state,” House Minority Leader Calvin Schrage said. “Public education is suffering. Our students don’t want to stay here, our families aren’t coming here and staying here. Our workforce isn’t being developed to meet the needs, and investment is not coming to Alaska. We are not on stable fiscal footing and we must act if we are to improve the lives of Alaskans for the next decade, two decades and beyond,” said House Minority Leader Calvin Schrage, an Anchorage Independent.
Right now, Alaska has a “people” problem, according to Neal Fried, an economist with the Alaska Department of Labor.
“The biggest explainer of that is that fewer people have been coming to Alaska,” Fried said. “And one of our challenges is we are more dependent on migration than any other state. We have more turnover in our population than any other state in the United States, so we feel that even more than any other state in the country.”
He says with unemployment so low in the Lower 48, there are fewer reasons for migrants to consider moving to Alaska. That’s one reason so many businesses here are having trouble finding employees.
That points to one of the ironies of Alaska’s job market now. Though the population is declining and the state’s economic statistics lag behind the Lower 48, there are far more jobs available than people to fill them.
A new survey from ADP Pay Insights — part of the ADP Research Institute — shows employers paid Alaska workers nearly 7.5% more in March 2023 than a year earlier.
Even though there are now many unfilled jobs in the state, Alaskans are concerned about a future where oil and gas jobs are declining. Industry leaders, however, say studies show it’s much too early to write an epitaph for oil jobs in Alaska.
“The oil and gas industry is the single most important economic driver, or engine, in the state of Alaska,” said Kara Moriarity, President and CEO of the Alaska Oil and Gas Association. “No other entity comes close to the level of economic generation that our industry has for the state of Alaska.”
With the Pikka Oil Field and the possible Willow Project creating hundreds — and potentially thousands of new oil jobs — even an industry with as many challenges as petroleum and gas will still offer economic opportunities to Alaskans for years to come.
Ironically, convincing young people of that can be tough, Moriarty claims.
“There are college students and engineering students who aren’t as interested in petroleum engineering anymore, because of that perception that’s out there — that the industry is over, the era of oil is over, you know, there is no future for oil and gas in the state of Alaska anymore — and that couldn’t be further from the truth,” Moriarity said.
If oil and gas, fishing and seafood, government jobs, and the tourism industries are the current major drivers of employment in the state, what will drive the next generation of high-paying jobs?
It turns out, there are no simple answers.
No huge research university is likely to spin off a world-changing Silicon Valley in the Anchorage Bowl.
The President of Alaska Pacific University says jobs will be created differently here.
“It’s not our role to create the jobs, but we can play that role of helping to educate and position our folks to our Alaska students to take those jobs and do that leadership and be in a position to be speaking and researching in those key areas,” APU President Janelle Vanesse said.
Vanasse says keeping young Alaskans here is the best way to grow our economy.
“What we do know is when Alaska students go to school in — at an Alaska University — they’re more likely to stay,” Vanasse said. “If we lose them — if they choose to go out of state for school — we run the risk of them not coming back home, and not coming back and contributing to our economy.”
University of Alaska Anchorage associate economics professor Kevin Berry agrees that focusing on higher education as well as physical infrastructure will lead to economic growth, even if it’s impossible to know exactly what jobs might sprout.
“One of the benefits of investing broadly in things like education and infrastructure is that we leave it to the market and individuals to figure out what works, and the reward is, if you’re the person who figures it out, you get to make the money,” Berry said. “That is a leap of faith. Basically, you have to invest in these things without knowing exactly how things are going to turn out in the long run.”
Berry concedes it’s a challenge to convince policymakers to take those chances.
“We have to make those choices before we know that they’re going to work out, and have faith in markets and each other that will be successful in the long run. And I think that’s a difficult choice for the state to make when it’s financially constrained,” Berry said.
Fried says job growth in some very specific areas can be predicted. He says tourism will likely continue to grow, and expects healthcare jobs to increase.
“Mining is another one — when you look at that, and you look at the rare earth minerals, and what the demand looks like in the future,” Fried said.
Fried said he believes it’s tougher to predict what will happen to jobs in the fishing and seafood industry because the different parts of the industry face such different and complex challenges, including climate change.
Julie Sande, the commissioner of the Alaska Department of Commerce, Community and Economic Development, listed several other areas of potential job growth in a written response to our questions.
Our state also provides unparalleled opportunities in (Arctic) research, drones and aviation, agriculture, mariculture, carbon sequestration, and more,” Sande wrote. “Additionally, I am excited to see the opportunities that will open in Alaska as broadband deployment transforms the connectedness of our rural communities and unlocks new opportunities for our workforce.”
Fried said whatever opportunities exist in the future, Alaska has some challenges that can never be changed.
“We are a small population, so you don’t get those efficiencies of bigger populations,” Fried said. “And just the geographic separation between us and the mainland — that just in itself, creates a lot of challenges, but in some ways, it’s also great. I mean, it creates some really unique ways we do things and work the way we are.”
Sande noted other economic challenges facing the state in her written responses.
“The Department of Commerce, Community, and Economic Development is continually working with our state agencies and private partners to improve or address the rising cost of healthcare, lack of housing, workforce retention and development, and removing barriers to business development– all challenges you might see in any other state,” Sande said.
She also called on the federal government to back off what she considers environmental roadblocks to economic development.
“Nobody develops resources more sustainably and responsibly than Alaska, and yet we are under constant attack from those who want to lock up our lands and waters for wildlife preservation,” Sande wrote. “It is vital for Alaska to first secure our ability to effectively develop our resources ... Alaska’s stores of oil and natural gas, along with our ability to be a domestic resource for many of the rare earth minerals necessary to make batteries and solar panels, will play an important role in the country’s energy future.”
Whatever changes come in Alaska’s economy, Moriarty said it’s good to see the state’s leaders considering all sorts of possible economic futures for Alaska.
“What does Alaska look like without oil? And how can — what different scenarios should the state be looking at to make sure that they have a secure future with or without the oil and gas industry?” Moriarty said. “I do think it’s wise to do that, regardless of what’s going on, to be prudent policymakers for the state of Alaska moving forward.”
She notes changes this big don’t come overnight.
“It ‘s not a light switch,” she said. “We’re not going to change on a dime.”
She was specifically talking about the future of the oil and gas industry, but her description applies to the broader job future of Alaska as well.
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