Famous as the state of economic boom and bust, Alaska appears to have reached something of a new, no-growth stability as its population ages in place, and its economy begins to diversify ever so slightly.
Now deep into the state’s longest running recession, the pain of the economic valley is nowhere near as obvious as the bust that rocked the north in the mid- to late-1980s. Though the 2018 economy has shrunk back to the size of that of 2011, according to the Alaska Department of Labor, Anchorage still looks outwardly vibrant and the bedroom communities of the Matanuska-Susitna Valley to the north are continuing to grow ever so slightly.
The state is now last in the nation in new job creation and first in the nation in unemployment. But nowhere are to be found the boarded-up mini-malls of the 1980s or the abandoned condominium complexes once obvious in the Anchorage Metropolitan Area, a huge swatch of the state’s Cook Inlet region that includes the Mat-Su and is home to about 60 percent of the state’s tiny population of less than 750,000 people.
Asked to explain why “The Great Alaska Recession’‘ that began in 2014 doesn’t echo with the ominous tones of the Crash of ’88, Labor Department economist Neal Fried Wednesday answered with the opinion that “there are a million reasons.”
“You’re still here; I’m still here,” the 1978 graduate of the University of Alaska Fairbanks, then joked.
Fried puts age high on the list of changes since the 1980s. What was once a state full of mobile, young people is increasingly a state of rooted, old people.
“Our demographics have changed a lot,” Fried said. Alaska historically skewed young, but not so much anymore.
The median age is now almost 35 and weighting older. More than one in 10 Alaskans are today over age 65, according to the state. At statehood in 1960, the median was 23, and it had increased only slightly to 27.5 by 1984 when the recession of the ’80s started.
Given retirement incomes and a booming stock market that boosts the portfolios of the better-off retirees, Fried noted, any number of the 65-and-over group can afford to stay in Alaska – if they want – pretty much no matter what happens to the economy.
Little boom = little bust
Retirees serve as a buffer on the current recession, but Fried noted that the biggest difference between now and then might be something simpler:
Alaska’s new-millennium economic cycle is but a shadow of the state’s historic boom and bust. Consider this the mini-boom and mini-bust. Alaska grew slowly from the mid-2000s through 2013 before beginning to shrink slowly back.
The build-up to this recession wasn’t at all like the bad-old days.
“We got so far ahead of ourselves in the 1980s,” Fried said.
Back then, houses were going up in Anchorage as if the city were planning to welcome a mass exodus from Los Angeles. When that failed to materialize, everything came tumbling down.
That just hasn’t happened this time. The economic build up was smaller and slower, and so, too, the decline.
“This recession is longer than the 80s already,” Fried said, “but it’s not as deep.”
And with oil prices now creeping upward and an ” oil renaissance” on the North Slope expected to end the steady decline in state oil production and add new oil to the Trans Alaska Pipeline System, Fried and some other economists are expecting the state could pull out of the recession sometime in 2019.
Whether Alaska can move beyond oil as an economic mainstay remains, however, a big question.
Island Alaska
As a state, Alaska is a middle-size American city (the Dayton, Ohio, metropolitan area, ranked 75th in the country, is larger), and has long-struggled with the image of a place where people go to adventure – or get rich and get out – not settle.
The Navajo and Apache Indians of the American Southwest abandoned Alaska for more hospitable climes only about 500 years ago, according to geneticists and linguists. Many of those who followed those early Athabascans into the country – the Russian fur traders, the American gold miners, the Texas and Louisiana oilfield developers – stuck to a similar script.
The territory’s population fell almost 15 percent after the gold rushes of the late 1800s and early 1900s ended, and for the next 30 years the population remained generally stagnant as the number of people coming north was near the number fleeing south.
Alaska was home to fewer than 250,000 people at Statehood in 1960, and it didn’t really begin to grow until after oil started flowing through TAPs in 1975. The state population didn’t hit 500,000 until 1984.
Oil revenue fundamentally changed everything. Oil money fueled the growth of state government and helped encourage repairs to a battered highway system, which in turn helped propel tourism.
“Our economy is now much more diverse than it was in the ’80s,” Fried said, citing the big changes in the so-called “visitor industry.”
When the Alaska Visitors Statistic Programs first started tracking tourism in 1985, the state attracted fewer than 675,000 tourists a year. The number didn’t reach 1 million for almost a decade.
It topped 2 million last year when summer tourism alone passed the 1.9 million mark.
Although a threefold increase since 1985 might seem huge, Alaska remains a bit player in national tourism markets. Oregon, a state that sells outdoor adventure and scenery similar to that of Alaska, last year attracted almost 29 million visitors, who left behind about $12 billion.
Oregon has invested heavily in development of its state parks and trail systems. Alaska has invested little in visitor services. Instead it has subsidized commercial fishing and banked on oil. The latter is proving a better bet than the former.
Fishing jobs were capped by the state’s limited entry law in the 1970s, and processing jobs have been slipping away to China or other Asian countries because of the costs and the difficulties of finding labor willing to work in Alaska fish processing plants.
“I don’t know where you find people,” Brian Gannon, a job recruiter told Sarah Gibson at New Food Economy. “I’ve recruited in Guam, Samoa, the Virgin Islands, and 40 states in the lower 48, [but] soon it’s going to be just us recruiters in a room talking to no one about how great work in Alaska is.”
“‘Great’ is subjective when it comes to a salmon processor gig,” Gibson added. “Room and board cost just $10 a day, but the pay is low: $10 an hour, $15 for overtime. Many say that the fishery’s slim profit margins won’t allow for a wage increase.”
The latter claim appears to have some validity. Alaska salmon processors are up against stiff competition from market-dominant, farmed salmon raised on automated farms and run through automated processing plants.
Future jobs?
Where the jobs of tomorrow will develop in Alaska is an unknown. Gov. Bill Walker is banking on development of a gasline from the North Slope to Cook Inlet, though the $45 billion cost is staggering and financing has yet to be arranged.
The odds of success do not look great.
With Australia, Qatar and Russia – already major natural gas and liquified natural gas (LNG) exporters – in the mix, he projected “it’s highly likely many” of the U.S. projects are doomed.
But Fried said there is potential for job growth in other industries Alaska.
Along with the visitor sector, he said, the air cargo sector is growing and could grow more. Cargo Facts last year ranked Ted Stevens International Airport fifth in the world for air cargo just behind Inchon, Korea and just ahead of Dubai in terms of volumes handled.
The airport is a major refueling stop for jets carrying air cargo bound from Asia to the Lower 48.
There is also potential for more mineral development, though many in the state seem opposed to mining. And there is always the possibility for the unexpected.
After the Prinz Brau Alaska brewery – a subsidiary of Germany’s largest brewer, Radeburger Group – failed in Anchorage in the late 1970s, nobody gave the production of Alaska beer much chance of success.
Seven years later, Alaskan Brewing shipped its first 253 cases of Chinook Alaskan Amber. Almost no one was banking on that business’s success. “Commercial banks turned them down for financing (as did relatives),” Tom Acitelli wrote at All About Beer Magazine.
But founders Geoff and Marcy Larson scraped together $310,000 in start-up capital with the help of 88 investors and subsequently built an Alaska institution that would become a model for others.
Alaska is now home to about three dozen breweries and brewpubs.
“The number of Alaska breweries and brewpubs mushroomed by over 150 percent from 2007 to 2017, and there’s no sign the state recession has hit Alaska’s brewers,” Fried wrote in November. “New establishments continued to open and employment increased even as the overall eating and drinking industry began to lose jobs.
“Brewery employment grew from 121 jobs in 2007 to 340 in 2017. Brewpubs have also grown considerably over the last decade, reaching total employment of 921 in 2017.”
The craft brewers have slowly but steadily taken over market share from the major beer producers. They now control about 30 percent of the business, and Fried expects their share will only continue to grow.
Beer is now an established Alaska industry. Hopefully there will someday be others.
Categories: News
ConocoPhillips projected in 2013 that their daily throughput would be around 100,000 barrels by 2028, now they are projecting around 300,000 barrels by 2028. While those are just projections they are very different projections.
http://mustreadalaska.com/north-slope-renaissance-ahead/
I love how we are sold on the “futures” market….2028 is a long way away from 2018 budget deficits….plus you are citing a Conoco Phillips study.
So do not believe Conoco when they said they projected a production decline down to around 100,000 barrels or now that they project an increase to 300,000? Being a skeptic is great but you can’t have it both ways, unless your line of thought is damned if you do damned if you don’t…and that’s not being a skeptic that’s just being hardheaded.
SB 21 is putting more oil in the pipeline and it brought in more revenue than ACES would have with the low oil prices.
Steve-O…
You bring up some very good points.
I am not saying this might not happen in 10 years from now…it very well may.
What I am trying to point out is that we may have made more per barrel during the sluggish down turn we have seen over the last five years (and presently)…under ACES…there is no academic comparison from what I have searched. All lectures given on the SB21 subject were by oil industry lobbyist and attorneys.
When you combine the loss in tax incentives and the 5% or more the state would have earned (per barrel) over the last 5 years, I wonder how much this would amount to? My thought is that it is a similar amount to our current state budget operating deficit?
When you say…
“SB 21 is putting more oil in the pipeline and it brought in more revenue than ACES would have with the low oil prices.”
I would challenge you to provide any “Academic Data” from a non-oil industry consultant….say maybe a UAA professor or Economist….that supports this statement, because it does not seem the exploratory incentives have paid off yet.
Steve,
I can’t change your mind on the subject, all of the “Academic Data” that I might provide you won’t change your mind on the subject. It is all very well documented, if you choose not to believe well documented facts it doesn’t matter. You need to look at the data for yourself and see what it means.
With low oil prices SB 21 provides more revenue for the state than ACES.
Throughput on TAPS was in decline before SB 21.
Since SB 21 throughput has on TAPS gone up.
The projections for the next decade show that throughput will increase.
If you want this “Academic Data” spoon fed to you then maybe you should contact whichever UAA professor or Economist you think will tell you whatever it is you want to hear. If you want the facts they aren’t hard to find, just remove your preconceived notions and blinders. The evil oil companies are required by law to provide this data, our government collects this data, and our government employees make reports with this data. All the data is there to be found, from the evil multinational oil conglomerate to the independent non-biased government paid hippie stooge.
The “Truth” regarding Alaska and our current Economy is that we were “limping” forward just fine through the National Recession… Then Sean Parnell and Oil lobbyists convinced everyone that SB21 was needed to lower taxes to the Oil Industry (Incentives) and law makers on both sides of the aisle voted for it….
What happened?
The State lost nearly $3 billions dollars to its operating budget and the promise of new oil field profits filling this gap has NOT materialized at this time….hence we still have a nearly $3 Billion in our current budget deficit.
Now add to that the “brilliant” idea of SB91 to let convicted criminals out of incarceration and is mostly responsible for what is now called “Grand Theft Alaska.”…not to mention the high rise in homicides and violent crimes including rape and sexual assault.
What is mind baffling to me is that Republican candidate Mike Dunleavy voted FOR these bills, yet he is running on a platform of “tough on crime” and “balancing the budget” by reducing government….
This makes no sense to me and shows me the true hypocritical nature of politics in Alaska.
I guess most voters are not very educated, and do not remember who votes for what nor do they have the capacity to understand how dangerous these actions are.
Rex Tillerson said it better than anyone when he decided to not allow Exxon Mobile to invest highly in the future of Alaska (ie. Pipeline Project)…
Rex said: “Alaska is their own worse enemy”.
These words ring true today as well.
Steve – just curious. The Walker Administration has repeatedly stated that Sb 21 brings in more revenue than ACES at the prices that we have seen since 2015. They have also said that SB 21 is not to blame for the deficits. Instead they point to the crash in oil prices. Are they wrong? If so, can you point to anyone that has examined this issue and concluded that ACES would have generated more revenue than SB 21 if it had remained on the books?
Joe,
Good questions….This is a talking point that I feel should be addressed more.
I am not an Economist, yet I have watched this play out over the last few years.
ACES seemed to be a much more straight forward approach to taxing the amount of crude flowing through the pipeline.
“ACES established the oil and gas tax credit fund as a way to purchase qualifying credits more efficiently. The amount of money available to the fund was based on a set percentage of production tax revenue; 10 percent when oil prices were $60 or more, 15 percent when oil prices were less than $60. The $25 million cap established under the PPT was repealed. The $25 million per company cap was lifted because small producers found the cap too low to be useful.”
Basically, under ACES their did not seem to be the budget deficit that we see occurring annually today (maybe there is less volume to tax? and maybe it is straight economics due to the price per barrel) I am not certain of all the numbers at play, but I do think this “small company” incentives has allowed a back door for producers who use subsidiaries acting as independent companies to pay less for exploration.
We really only saw the price of oil “bottom out” for 3 years or so, then we got back into the $70.00 range. Yes, this is still less than $90+ a barrel back in 2010, but ABOVE the $60.00 mark which ACES used as a meter stick…..ACES also taxed 5 percent more when oil was less that $60 and SB 21 does not do this.
My thought is producers like BP, Exxon and Conoco Phillips knew the price would linger around $50/barrel or slightly higher and did not want to pay the higher tax rates….hence they lobbied for SB 21 which is not working well in my opinion.
A wise man once said “There are no coincidences”.
$3 billion given back to oil industry….$3 billion deficit for our state operating budget.
Well said Steve s.
What do you make of all the new oil finds that are directly linked to SB 21? What do you make of the year over year throughput increase that stopped years of decreasing throughput of TAPS linked directly to SB 21?
The anti SB 21 talking points might have been good talking points before it actually took effect, now after years of low oil prices and better revenue under SB 21 than ACES, hundreds of millions if not billions of barrels of oil discovered, and increasing throughput your talking points might play well in an echo chamber but do not stand up to reality.
Steve-O…
If you think there are really new discoveries, then why are the original seismic testing results still “top secret” by the federal government?
Our state and federal government has known for a long time how much oil is up there and in ANWR….not to mention up in the Arctic….the problem has always been getting it out of the ground and to market.
These billion dollar multi national companies are playing us like fools…go on and believe the “new” discoveries if you wish.
Yes, a few “test” wells are drilled to pin point the best extraction point, but the big 3 have a good idea where the crude lies at this point.
None of the “producers” are operating with budget deficits…to the contrary, they support billions of dollars of profit each year with CEO making millions and millions in bonuses.
Lastly, if one examines many of these “smaller” exploration companies, you will discover connections if not pure “subsidiaries” of larger corporations.
It is like General Mills buying out small companies like “Annie’s Organics” are promoting them as an independent entity.
ACES was much more straight forward and placed an extra 5 percent tax when oil is under $50 a barrel, that would have helped through our sluggish period.
Beer, pot and dreams of mega-projects can’t be used for the argument that Alaska’s economy is “slowly diversifying”. Alaska’s economy is becoming less diversified. Alaska is a now primarily a goverment-based economy, where jobs are generated by local, state and federal/military spending. Sure, gubmint doesn’t have much money. But what does that matter? Just borrow, bond or tap the PFD trust fund. Government is not affected much by the laws of economics that drive the private sector. And government could care less about the private sector. So comparing this recession to the 1980s is rather pointless because such a higher percentage of Alaskans work for the recession-proof gubmint in 2018.
James I have to agree with you. Steve, our nation is not in an “unemployment crisis”. We have more jobs than people willing to take them, both black and hispanic unemployment is at record lows, food stamp usuage is at a 19yr low if I remember correctly. The problem with a lot of younger Alaskans is drug use. Not much different then the lower 48 but, the differences are local economies and how they handle this void – automation in the workforce, move overseas, higher taxes, etc.. Without going into to much detail, (besides local and state gov. or military base) what does Alaska have to offer the young? A spot on a fishing boat? A career in guiding? A chance to be a “Rough Neck” on the North Slope? It used to be the younger gen sought adventure, hence, the calling towards Alaska. Now they seek adventure through SnapChat.
Bryan,
Even Trump complained on the campaign trail that the “official” unemployment numbers are a lie….
“The US government no longer tracks unemployment among discouraged workers who have been out of the work force for more than one year.
However, John Williams of shadowstats.com, continues to estimate this rate and places it at 22 or 23 percent, a far cry from 4.1 percent.
In other words, the 4.1 percent unemployment rate does not count the unemployed who do show up in the declining labor force participation rate.”
https://www.foreignpolicyjournal.com/2018/03/08/make-believe-america-why-the-us-unemployment-rate-doesnt-indicate-economic-recovery/
Steve you are in a pretty deep well of denial. Did you not read what I wrote about the unemployment numbers? I mean, you just want to bash so much you can’t see the “forest through the trees.” This was just out 2 weeks ago.
https://www.cnbc.com/2018/09/11/small-business-optimism-surges-to-highest-ever.html
Funny Byran…
That is the same way I feel about you (denial).
You wish to bash me for my comments, yet I am trying to show you that your own man Trump has said the very same thing that I am trying to tell you now.
“Trump repeatedly claimed during the campaign that the federal government was understating the real unemployment rate.”
“Don’t believe these phony numbers,” Trump told supporters early last year. “The number is probably 28, 29, as high as 35 [percent]. In fact, I even heard recently 42 percent.”
https://www.npr.org/2017/01/29/511493685/ahead-of-trumps-first-jobs-report-a-look-at-his-remarks-on-the-numbers
Steve I think what’s being missed is it’s apples and Oranges . Jobless rate versus fake unemployment percentage rates . I don’t know who said what when but you can’t say job seekers has anything to do with unemployment. At least in Alaska . I’m unfamiliar with how people find jobs in the states but in Alaska most people get jobs by word of mouth to what I’ve seen . As I know few people who file unemployment or go to job service as both of those systems are pretty much a hassle . Do they find the info through polls ? If so I know no one in my close proximity who was polled . That’s why it might be considered fake numbers . That said perhaps they are a distant reflection of actual unemployment? If so then the numbers could be used for a marker on the economy but not for anything that involves math or solving a real problem as they are to distant from real numbers to be useful. Real numbers as in who actually needs and wants jobs . IMO
Opinion,
“Job Seekers” have everything to do with “Unemployment” and federal and state statistics.
Economists know that after several failed attempts, many people stop looking for jobs (wind up on Welfare or slowly deplete their savings and assests).
These unemployed “non lookers” are not included in the data set.
This is very well accepted point of contention to the national unemployement figures.
As for your group of friends, yes word of mouth works in the local service economy, but remember most people who travel up here and make the move already have a job lined up and it was worked out online and through phone interviews or a visit.
That is how I traveled north…answering an ad online in the old ADN classifieds for a remote lodge manager.
Sorry Steve, using my cellphone and I meant to say you are to caught up in bashing Trump to see real success. Under Obama he used the U6 numbers (summer help, lifeguards, yadda) to deflate his terrible unemployment numbers and the media pushed those bogus numbers. So, under Obama, Trump was probably right, unemployment probably really was in the 20% range. U3 is the official unemployment rate. U5 includes discouraged workers and all other marginally attached workers. U6 adds on those workers who are part-time purely for economic reasons. The current U6 unemployment rate as of August 2018 is 7.40. The current U3 unemployment rate is 3.9%.
Don’t confuse Obama’s horrendous economics model to Trumps MAGA.
Obama with his over-regulation on energy and environmental crushed Alaska. Trump is bringing Jobs back to Alaska and has made America the #1 energy producer in the world for the 1st time and yet we complain “Trump this, Trump that”.
Bryan,
I think your 7.4 percent number is getting closer to the truth in unemployment (trump politics aside) but, with only 18 percent of AK getting out to vote…I wonder how many folks are really included in federal and state statistics?
You know, the folks off the road system who might not even complete a tax form each year and there are plenty IMO.
As for Trump and MAGA and America as a top energy producer….well, as his administration guts out the EPA and “fracks” our nation from ANWR to Allentown, PA, we are also poised to be the world leader in new Cancer cases throughout America.
It was once a 1 in 5 odds of contracting this disease and now it is approaching 1 in 2.
And without the Paris Agreement guidelines on climate change, America will stay 2nd in the world as a greenhouse gas emitter….Does this make us great or just plane unhealthy again?
https://www.smithsonianmag.com/smart-news/how-America-stacks-up-greenhouse-gas-emissions-180963560/
Steve glad you mentioned fracking. On the list of most ass backward inventions ever. Water should always be number one priority. As to green house gas emissions, it’s pretty obvious big buisness is stymieing green energy progress. Solar and Micro hydro is amazing! My opinion is an interconnected every continent energy grid . Minimum batteries – surge and emergency, batteries or perhaps none at all – just huge weights at top of mountains ready on train rails / or huge water tanks . Primary solar energy, Some micro hydro. It’s almost always sunny somewhere on globe . Probably could go to electrical cars and most machinery. That would greatly reduce toxic emissions. Greenhouse gasses not that big a deal compared to the toxins in fossil fuels. You can’t blame all cancer on that though. To many causes . Innumerable. Another rebuttal to lack of diversity. Adn just had article on a private group starting a solar farm . As to myths about solar not being viable I can promise you solar works . My home is very modern and large . All modern standard appliances. All run off the sun . I only use standard power as a supplement November December plus occasionally when it’s been raining for days . About 22 -250 watt panels . February March April I could power multiple houses due to sunlight reflection from snow . It’s unbelievable. I run big chest freezers washers dryers water pumps everything. I recommend everyone goes solar . Micro hydro is even better if available. There is so much down played technology. Alaska could produce power for the world with our huge tides . Big hydro dams are complete idiocy in Alaska .
Opinion…
Nice job on the solar system!
I may ask you a question or two in the future as I look to install my own panels.
That is how more folks should live in AK!
Steve, the Paris Accords and “Climate Change” is nothing more than scumbags redistributing other peoole’s wealth. Look at the phony signators of the Paris Accords and you will see they are some of the worst offenders. Well, who pays the most? Us! When we do the most to reduce silly “carbon footprints or greenhouse gases”. I say screw em to. Same with the EPA. Nothing more than a political hatchet tool for a den of liberal nuts.
As for cancer, well, look at the food we eat on a daily basis and the chemicals ingested. Cancer should come as no surprise.
Steve, you really need to stay away from the Wash Post, NYT, LA Times, NPR, PBS, etc.. they are ALL LIARS amd spin masters and you take what they say and run with it. There is debate on Fracking but, the consensus is it is an acceptable extraction of resources. But hint, Fracking went on WAY before Trump. The EPA was nothing more than a Job/industry killer. Abolish the EPA!!! Isn’t funny tue USA is the #1 rwducer of Carbon Footprint INSPITE of pulling out of the Paris Accords?? More phony nonsense.
https://www.forbes.com/sites/rrapier/2017/10/24/yes-the-u-s-leads-all-countries-in-reducing-carbon-emissions/#41306de53535
This is good for a laugh but addresses a lot of what Craig brings up. More nonsense.
Even the weather is fake. https://youtu.be/pnUVzV4INWA
James , do you have numbers to back those statements up ? Reason I ask is because my way of thinking says private/buisness mega project enterprise created the permanent fund that govenor walker steals from . Buisness enterprise also pays taxes through mining and fish ect . To my knowledge government rarely created one dollar . Money we get from feds comes out of your neighbors pocket sweat and blood. Even dividend investment portfolio comes off the back of buisness enterprise and the workers who sacrificed. So my way of thinking says our economy is more diverse . Even the fed where we get the money that’s in the system is from private / buisness enterprise . Unethical though those controversial families may be . Government gets its money from private people and is in no way inflation proof or anything proof to my way of thought. The laws that effect the private sector will always eventually effect the government. Imo . But I do understand your feelings about government. I’ve been told by numerous contractors the state is one of the worst for late delayed payments. Often 12-20 months. Private companies can’t get away with that . Also the fact government employees get raises regardless of their performance so they seam immune to economic laws .
Hi Opinion,
Alaska state government currently spends $14,290 per resident, and with the cuts to capital projects most of that is labor. The portion of the state budget funded by the Federal Government as pass through totals about $4500 per capita (about $3.4 Billion). In addition, the Federal government spends another $12 Billion directly for military, federal agencies, etc. That’s another $15,600 per capita. So, yeah, with spending by both State and Federal governments totaling $30,000 for every resident of Alaska you can see that a huge percentage of our economy is government.
For a reality check I investigated other similar states and what they spend to govern. Utah and Idaho, for example, are very similar to Alaska. They are big Western resource states with about half their population located in close proximity to their urban areas. Utah’s total state budget is $4492 per capita and Idaho’s budget is $4720 per capita. Their federal matches are similarly about 1/4 to 1/3 of Alaska’s. Alaska’s total budget is $14,290 per capita and federal spending $15,600 per capita. That’s about 4X what these other states spend on pretty much the same services!
Here’s a good source for the numbers you’re looking for:
Source:
https://ballotpedia.org/Total_state_government_expenditures
(note, link has comparisons of 2016 numbers, but 2017 links are provided by each state)
https://www.usnews.com/news/best-states/rankings
https://www.usgovernmentspending.com/spending_chart_1997_2017AKb_13s1li111mcn_F0t
Fred . So I agree with you government is a pro at spending. Although I would debate the concept government spent anywhere close to 30 k on me this year . Perhaps if you average all people and include politicians and their aides salaries . What you seem to have completely missed is that government did not make or create that money. They got it off the backs of people. People and public resources are the economic engine of America’s economies. I’m not saying government doesn’t serve a purpose . I’m saying Alaska’s economy is fairly diverse and people make it that way . Not government. Government policies can assist but almost all government money comes from private enterprise in some fashion. Therefore government is attached to economic law and can in no form be considered recession proof. As in a rebuttal to James comment. Make sense?
Opinon,
You are not listening to anyone or the facts regarding the AK economy.
Our economy is Not diverse.
NOT in the least when you compare it with places like California who grows tons of food and has a “tech” sector.
Most folks come up these days for government jobs like school teacher, cop, firefighter, military, social services, civil servants like muni employees and boroughs throughout the state.
There are not “angels” investing in the private sector up here like the lower 48.
And the guys who break their backs and save a few hundred grand from a career in the oil patch, get out as soon as they reach retirement age or have one divorce too many.
Hence they take their riches back down to America and sit it out in sunny Florida or Arizona.
Ok Steve . I agree with you on a economic diversity comparison to other states you are totally right , I think- haven’t researched though . Not sure why you said I wasn’t listening to anyone or facts ? I believe Craig’s statement comparison was comparing right now with 1980s back through statehood. Correct me if I’m wrong on what Craig said . I was trying to be in line with his article . Did I miss something?
Steve I was also rebutting James claim Alaska is not diversifying. I know you think p.a and the states are the cats meow economically but keep in mind Alaska must start somewhere. We made a big step past furs harvest when Russians owned us .
Opinion,
The whole reason I am active in debate is that I see Alaska “failing” at many levels.
Almost all of the good people I knew from fishing guides, to NPS rangers, to scientists in Amchorage, to drillers on the slope, to hippies in Talkeetna and Chickaloon….have left this state.
They take their smiles, educations and futures some where else.
Many of them still had good jobs that paid well when they decide to abort.
This on top of a ridiculous amount of hard drug use locally and serious crime concerns that make me think about my family’s future.
Yes, I feel PA and CA have adjusted better to the modern economy in U.S.
Wind turbines, solar power, natural gas powered vehicles and technology industries to name a few.
P.A. has built 5 gas lines since I left and AK has “boondoggled” their only attempt.
I do feel the lack of a private sector is crushing the free market up here (I was also in small business the last 10 years).
So, as I try to forge a path ahead, I speak my mind and hope that CHANGE can come to AK with the help of a new governor who supports our local Salmon runs.
Opinion, think of the billions of wasted taxpayer monies on inefficient solar and wind power. I am sorry but, oil, coal, and natural gas reign supreme in efficiency amd affordability and always will. Now of course offgrid solar and wind play a part but, that is about it.
Bryan I know you are just following anti green energy current party lines . So I forgive your ignorance. Don’t try and defend the current republican undefendable position . That said I agree with you on the billions wasted . Whenever government is involved they will mess it up . Give it a bad name . Solar city- Tesla ect . Now look at it from my view . Do some research. Green energy works. Batteries are the problem. (Solar is not being maximized . Look into England’s use of special mirrors for solar collection.) (solar farms make money)Thus an intercontinental power grid to harvest green power from sun – tides – wind – geo thermal and more . It’s like a house it needs all parts to work well . If the grid spans enough area it works becouse then power sources are diverse and somewhere always functional. Tax breaks and incentives are good but when government gets involved it often becomes a mess . IMO
Also Bryan I’m in agreement America doesn’t need to be hindered or bothered with foreign agreements like Paris accord ect unless it directly benefits us . What needs recocognized is green energy works on its own feet. If done correctly. Also what needs recognized is burning or using excessive fossil fuels has a financial cost to environment and human health. We still need some fossil fuels but minimal if green energy was implemented and engineered correctly. First is a huge electrical grid to get power from one end of globe to another. That makes green energy consistent and reliable . Tapping many sources. Absolutely no big dams . Ecological disaster. All surfaces of homes and buildings should have photovoltaic cells as siding and roofing . All manufactured surfaces that get sun exposure should convert sun to energy. Cars even possibly clothes . All surfaces where weight wasn’t an excessive limitation. Only use what is effective for that area . Wind is pretty limited at this point. It wouldn’t hurt if the Republican Party got scientific and jumped on this highly ethical band wagon . It could be done .
Absolutely that makes sense. Most of the money for Alaska government comes directly from selling state owned oil and other resources. Those resources belong to all of us, not to the government. The state is basically taking your money and spending it as they see fit, often in ways that do not benefit the Alaska people. Many of the regulatory burdens I would argue just harm the Alaska people and businesses. The Federal money spent here in Alaska comes from people and businesses all over America, not just in Alaska. We have a disproportionately high federal spending because there are a lot of federal interests here with a small population, so the per capita federal spending is quite high.
That money comes from business, as you point out, so as business income goes down the government spending will also have to go down. It is not recession proof. Lower oil prices will eventually lead to a reduction in state government spending. The permanent fund is not a sufficient buffer. A nationwide recession will lead to a reduction in federal government spending.
The $30K per capita spent by state and federal government here in Alaska is not spent on any person, it is mostly spent to hire people. I only point it out because it is a massive number, far higher than any of our businesses. Total value of oil produced, for example, is about $13 Billion per year, and not all of that is spent in Alaska. State and Federal government spending is $23 billion per year. So the government portion of the local economy is twice that of the oil industry.
Half of that money funds a bloated state bureaucracy and the other half funds our military bases and various federal offices and agencies. Very little of that gets spent on normal every day working Alaskans except for maybe the state road system. State and Federal education and medicaid funding mostly goes to rural villages or poor non-working folks in the cities, while local taxpayers pay the bulk of education costs in the cities and private insurance pays the bulk of medical costs throughout Alaska for normal working families.
Bryan,
I agree with you (and Trump) on his recent tariffs and NAFTA negotiations, only I worry the damage has already been done.
I doubt companies like Ford and GE will move their newest plants back to the homeland.
What we are seeing out in the midwest is jobs (at places like Carrier) are still being lost to Mexico in spite of Trumps rhetoric and incentives.
It is time for large government projects like the WPA in the last depression.
That will be the only way to truly tackle the mass unemployment facing our nation….only this time the focus should be on “green energy” and our crumbling infrastructure.
It takes time to get nafta problems reversed. Took 15 years or more for the manufacturers to leave . For our wood mills , steel , textiles and other companies to be destroyed. It may take way longer to return because the ultra rich are so dead set on profits using borderline slave labor . They are strong arming politicians and using misinformation to get their way . Misleading advertising. The ultra rich got used to easy living. Bezos Amazon , google , fish processors are all addicted to artificial cheap labor . I call it Artificial becouse because they don’t pay a reasonable wage and the employees are reduced to relying on government hand outs or live in a country where slave like conditions exist. Effectively they are stealing from those people by not treating them respectfully . Those companies are also stealing from tax payers when low wage folks have to rely on government assistance in any form . As to Craig’s article- my hat is off to Alaskan buisness that makes it all work . You are back bone of this state. Truly impressive. I agree with Randy a serious discussion must include health care for all or a way to make it affordable. That might mean eliminating nafta – + heavy tariffs so Americans can afford their own care . I don’t know . Good thing a buisness man trump is working to fix all the mess from our sell out career politicians. Sure trump went bankrupt a few times but what that means is he’s been through the fire and gained knowledge. Over his lifetime his net value has increased massively. So he is very qualified to help America make financial decisions. Repair of our economy may also include total revamping the fed and bank systems so our money value quits getting degraded by paying interest on the money we put into the economic system. It’s silly houses now cost 10 times what they did in 1970 . The houses don’t actually cost much more to build its that money isn’t holding its value. Houses do . If money held value it higher wages would have been not needed and people could probably afford their own health care more easily. Able to keep their independence and not become reliant on government . Medred is massively on right track with this article. Pointing out how diversity of economy and local citizens are holding this state financial s together. Diverse investment strategy. Renewable sources. Parks ect . Good job Craig.
Nice discussion, but I’m skeptical of the seriousness of one that does not include as one of its main topics is healthcare.
Already, greater numbers of seniors are using healthcare dollars in places like Washington and California, where treatments are generally half what it costs in Anchorage.
The typical health insurance premiums for Anchorage teachers may have already reached 1700.00/month, or 20,400.00/year. For the three thousand or so employees in that teacher’s bargaining unit this comes to a whopping 61,200,000.00/year.
To put this into proper perspective half the homeowners is Anchorage pay less in school taxes than what it cost to keep a single teacher insured for one month.
We have a killer market at the moment, but I’m not confident the senior population will have nearly the positive influence as alluded to here.
Right Randy! We need to increase our property taxes. But before that happens please give us the basis for your assertion that heath care insurance for teachers in just Anchorage alone is costing $61 Million each year.
TfC, if you go the the ASD home page follow the links to the teacher negotiations.
My understanding is that there are 3300 teachers so I rounded off the number to 3k. The 1700.00/month is rounded off, which includes this years monthly premiums increase. 12×1700=20,400/yr per each employee; or, 20,400 annual premium/emp 3,000 teachers=61,200,000.00.
The muni is taxed to the cap, and property values are flat and falling. Property tax increase is unlikely as the district lost nearly 700 students last year.
It should be noted, teachers with 20 years in earn in excess of 125k. All covered teachers pay little to no co-pays or out of pockets.
I’ll leave it to Greg to tell you about Sheffield’s ambulance trip from South America to US for health emergency; yes, a private jet.
Incidentally, the folks that don’t pay a dime for healthcare have Medicaid that equals or is better than ASD teachers.
Furthermore, teachers are in the classroom 191 days/year; or part time by private sector standards.
Randy, with all respect I do not have any idea where you got your numbers from. Where did you get the $1700 per month per teacher. And the $125K per year for teachers who have 20 years in. I have a family member who has 19 in and she gets around $70K a year. Can you be specific about where you are getting these numbers instead of just re quoting them? I am thinking that you are exaggerating a bit. Maybe???
As long as elected governors of this state (D’s, R’s & I’s) are beholden to corporate bankers and oil industry lobbyists we will continue to see a “state of stagnation”.
Until new economies such as bio tech and renewable energy are introduced to this state, we will continue to put as much energy into these “mega” projects as we get out in the end.
The sad part is what we are seeing throughout America (not just in Alaska) is the continual loss of jobs as corporations move their manufacturing to Mexico and Canada as well as out sourcing to Asian countries like China and Taiwan. This “siphoning” out of our domestic economy has been in play since the 1990’s when the Clinton’s introduced NAFTA and touted it as great for our trade relationship with our neighbors…the only problem is that it clearly became a one way street since tariffs were never lifted to import more products from Canada and companies did not move here to open new factors or create jobs for the American population.
Add to that what the WTO and G7 agreements did to domestic products and you see situations like we have today…..thousands of Alaskans getting their food though programs like SNAP and food banks while over 50 percent of our sea food is sent to China for the profit of privilege oligarchs.
Well Steve, Thank God for Trump then and his renegotiating of NAFTA and Chinese Tariffs while bringing corporations back to America with more friendlier regulations and taxes over the Obama Admin.
And just be glad this never happened “Back then, houses were going up in Anchorage as if the city were planning to welcome a mass exodus from Los Angeles. When that failed to materialize, everything came tumbling down.”