All tangled up//New Mexico State Parks

In a sure sign that the always contentious Cook Inlet meeting of the Alaska Board of Fisheries is approaching, the state’s largest newspaper is propagandizing on the value of the state’s commercial fisheries and calling it “journalism.”

Imagine the reaction if the Anchorage Daily News applauded the state oil industry for being a $5.6 billion business paying $172 million in Alaska taxes and employing 58,700 workers all “sustained without one penny of support from the state.”

That, of course, is not going to happen given that although the oil industry remains the mainstay of the state economy some Alaskans are already angry that the $1.6 billion or so in revenue the state is expected to collect in petroleum taxes and royalties this year isn’t enough.

And just about every Alaskan would rebel at the idea of giving up all of the oil revenue in order to keep the industry pumping crude through the Trans Alaska Pipeline System. Yet for years, the commercial fishing industry has been getting a deal even better than that.

It has long been subsidized by the state.

Thanks to some minor tax increases, some new revenues from fish caught in test fisheries and some state staff reductions, state revenues from fisheries now appear to come close to matching state costs to run those fisheries, and the ADN’s defacto fisheries reporter, Laine Welch, is bragging about this as an accomplishment.

Welch isn’t actually, officially the ADN fisheries reporter. She just plays the part. The ADN uses the “journalism” she provides them because, as ADN editor David Hulen once explained, fishery issues are too complicated for an ADN staff reporter to unravel.

Hulen was and is well aware of Welch’s conflicts. She doesn’t try to hide them. All you have to do is go to her website – Alaska Fish Radio – to see who supports her. Her income comes from commercial fishing interests, and she honestly outlines what she does:

“Our goal is to be the ‘go to’ site for timely news for Alaska’s seafood industry: fish catches, market trends, management changes, politics, research, the obscure – anything that impacts our fisheries, fishermen, processors and oceans.”

The fishermen in this case would be “commercial” fishermen. Welch could care less about sport, personal-use or subsistence fishermen, or the approximately 80 percent of Alaskans who don’t fish at all and thus only benefit from whatever economic advantages accrue to the state from the commercial fisheries.

In reality, Welch is an industry-funded cheerleader for the commercial fishing business. When this was pointed out to Hulen years ago, the ADN’s big concession to factual information was to begin identifying Welch as a “Kodiak journalist” instead of an “independent journalist.”

What the difference has never been clear, and there is nothing wrong with the ADN running Welch’s column as commentary from a clearly identified industry propagandist, but labeling it journalism?

This is journalism?

So let’s parse these claims of state benefit Welch touts.

First off, an Alaska reader with even minimal math skill might notice that $172 million in taxes on a reported $5.6 billion industry is a tax rate of about 3 percent, which is a pretty sweet rate for any industry. The oil industry would kill for this sort of deal.

Working Alaskans in Kenai, along with all the other Alaskans and tourists who troop there to fish every summer, now pay twice this in sales tax every time they make a grocery purchase or visit a restaurant to eat.

Not to mention that the $172 million isn’t really $172 million; it’s $132 million after a state kickback of $40 million to private, nonprofit (PNP) hatcheries run by commercial fishermen for commercial fishermen.

They try to sell those hatcheries by claiming they produce fish for “all Alaskans,” but, according to the Alaska Department of Fish and Game, 99 percent of the PNP fish – largely pinks and chums – are caught by commercial fishermen. 

Not all commercial fishermen, however. There are no hatcheries in Bristol Bay, the stronghold of the state’s high-value sockeye salmon. So actually 99 percent of the PNP hatchery fish go to a small portion of the 1.5 percent who dominate the harvest of Alaska salmon.

The hatcheries themselves are now also allowed to catch “cost-recovery” fish to help pay for the operations of their facilities, which were to be supported with an “assessment” on commercial fishermen who formed private, non-profit aquaculture associations to run the hatcheries.

This is how that $40 million comes to pass through the state budget. It’s assessment money the state collects from the fishermen to pay the hatcheries to produce more fish for the fishermen.

The state is just the middleman and an enabler, which can complicate its original role as the resource manager.

The state pretty much had to allow the hatcheries to engage in the “cost recovery” fishing of a legally public resource because the state has loaned tens of millions of dollars (it may now actually be hundreds of millions) to the hatcheries and would lose its investments if the hatcheries went under.

And Welch is trumpeting how this is all “sustained without one penny of support from the state?”

Tough business

This is not meant to disparage the commercial fishing industry in Alaska. It is a vital part of the local economies in Kodiak, Cordova, some parts of Southeast Alaska, and elsewhere.

But “journalists” are supposed to paint a clear picture of reality, not some rosy portrait of goodness desired by the people who pay their salary.

At a statewide level, the mining industry is a better economic deal for the state of Alaska than the commercial fisheries, according to the University of Alaska Institute of Social and Economic Research (ISER). (And yes, the author realizes what a politically incorrect thing that is to write.)

“Mining brings in about six times more than the state spends to manage it,” ISER reported in 2015 after looking at the costs and benefits of the mining, fishing and tourism industries. At that time, tourism was breaking even, and the state was subsidizing the commercial fishing industry.

If the state is now collecting enough revenue from fishing businesses to cover the costs of managing and policing them that is a big step forward in a state facing a fiscal crisis. Whether parity has actually been reached here is unclear.

Revenues now exceed by several million dollars the budget of the fishery managers within the Commerical Fisheries Division of Fish and Game, but fishery policing is done by the state Department of Public Safety. It is unclear how much of that agency’s Alaska Wildlife Trooper spending of about $27 million is spent on commercial fisheries enforcement, one of that division’s biggest responsibilities.

ISER estimated troopers spent about $7 million in 2015. ISER also reported almost $15 million being spent by the state to support the Alaska Seafood Marketing Insitute. The state has eliminated that subsidy.

Clearly, for what might be the first time in recent state history, the state is at least making an effort to see to it that commercial fisheries pay their way.  So let’s, for the sake of argument, assume we are at the break-even point, as Welch claims, and ask the key question:

What does Alaska get for this?

Low-paying jobs

Welch cites “about 58,700 workers…directly employed by Alaska’s seafood industry, earning $1.7 billion in wages annually.”

That sounds great, but if you do the math, the average income works out to approximately $28,961 per person per year. That’s below the $32,190 poverty line for an Alaska family of four.

The mean here is not, however, representative of an industry with two distinct classes of workers: low-wage, “slime line” workers in processing plants and better-paid holders of limited entry permits to fish commercially. Some of the latter do very well.

Quite a few of them have done so well they’ve moved out of state. That might be a good thing or a bad thing. If they continue to own a home here in a community where they pay property taxes and ask for little in the way of public services because they are gone during the long, cold part of the year, that could be a good thing.

If they are only here for a couple months to grab their money and help drain the wealth out of the state, that’s probably a not-good thing.

“There were 29,400 skippers, active permit owners and crew who fished in Alaska, of which 16,319 (56 percent) were Alaska residents,” Welch wrote. So, in other words, 44 percent of the people actively involved in catching fish commercially in Alaska are non-residents.

Forty-four percent is a pretty big number, but it pales compared to the processing end of the business.

“Alaska processors employed 26,000 workers on average,” Welch wrote.

According to the Alaska Department of Labor, most of those workers are seasonal (the 26,000 number is the July peak, the number of workers from Sept. to May is about 5,000); just under 72 percent of them are non-residents; and they are paid an average wage of $12.25 per hour.

Given the latter, a rational Alaskan might give thanks that so many of these workers are migrant laborers who don’t stay in the coldest, darkest state year-round and thus don’t demand a lot of costly government services.

Suffice to say, the fishing industry isn’t exactly providing tech industry salaries of $70,000 to $140,000 per year on which the Legislature could impose an income tax to solve Alaska’s fiscal problem. And there is no sign that this is going to change.

Fish farmers are now doing to the seafood business what their predecessors on land did to the rest of the agricultural business long ago. The Alaska fishing industry is facing stiff competition only getting stronger.

That said, Alaska fishing isn’t going to die anytime soon.

There is too much resource available and with some changes in harvest techniques, something that seems inevitable in the future, it is possible to lower production costs and keep Alaska fish competitive. And the business itself is full of some of the best people you’ll ever meet.

Still, that doesn’t mean it is inherently in the best interest of the state – or of the state’s residents – to basically give the fish away to support the industry. It might be; it might not be.

These are the kinds of things the citizenry is supposed to decide. This is the way democracy works. The only problem is people can’t make these kinds of decisions in a vacuum. What journalism is supposed to do is pump some air in there.

Journalism is supposed to provide data and context to help give people some idea of the tradeoffs in a world full of tradeoffs. In that regard, the whole fisheries management system in Alaska could probably, at this point, use a review.

In some cases, it appears the state is spending significantly more to manage small, hotly contested fisheries than those fisheries are worth. The management costs in Cook Inlet, for instance, appear to far exceed any return the state gets in terms of taxes on the catch.

A good argument might be made for a more conservative management scheme to lessen the demand for intensive management efforts aimed at catching every, last harvestable fish in a complicated mixed-stock fishery without undue damage to weak runs, a herculean task from a fisheries management standpoint.

The good part of being a propagandist instead of a journalist might be that you don’t have to worry about all these complications. You just sing the praises of your cause and collect your money.

There’s nothing wrong with that either. The country is overrun with advocates these days. They, too, are a vital part of democracy.

They just shouldn’t be allowed to pretend their one-sided view of the world is journalism because it’s not journalism. It’s propaganda.