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2013 broke records, 2014 won't

In 2013, the Southeast Alaska economy, which had been in an expansion phase for the previous five years, stopped growing. Both the population and the number of workers in the region grew by a mere 19 people, which is akin to no growth at all. Total wages grew by just 2 percent, and economic trends statewide were nearly identical.

 

Despite our near-zero growth rate, the number of residents, workers and job earnings each represent records for the region. We have reached a high point in the regional economy, but our momentum appears to have slowed. Some indications suggest the economy may begin trending downward. There are several reasons for this.

 

The Southeast Alaska economy has always had a countercyclical relationship with the national economy. When the national economy stumbles, the sheer size of our government workforce acts as a stabilizer. Further, in reaction to a weakening dollar, the value of precious metals rise, increasing the economic value of our mining industry. During these periods, our job market becomes an attractive lure for young people out of work in the Lower 48. Thus, our population expands.

 

We have experienced five years of growth partly because of these elements. However, for the first time since 2008, some monthly regional unemployment rates are exceeding those of the nation as a whole. Metal prices are falling, less oil at cheaper prices means less unrestricted State government revenue, and a culture of reduced federal spending (along with the elimination of earmarks) has translated into fewer dollars filtering down to municipal and tribal governments. As a whole these impacts mean that our half-decade of economic growth appears to have reached an apex — for now.

 

There are, however, some exceedingly bright points in our economy. Since 2010, the private/military maritime economy of the region has grown 14 percent (about 900 jobs), while wages grew by $76.4 million (24 percent) as nearly every component of this sector added jobs to the regional economy. An influx of 250 U.S. Coast Guard jobs since 2010 — jobs with high multiplier effects — have counteracted the loss of federal jobs in other areas (especially in the U.S. Forest Service). Fishermen in the region caught 479 million pounds of seafood in our waters in 2013, toppling old records and expanding our processing capabilities. The visitor industry, which falls and rises according to the strength of the national economy, is back to near-record levels and continues to expand.

 

Unfortunately, Southeast Alaska’s economy is expected to shrink by .5 percent by the end of the year. Our maritime industry will continue to grow, thanks in part to the Alaska ferry shipyard contract in Ketchikan, as will our visitor industry. However, previous positive drivers for the region’s economy, such as government and mining, are expected to fall by nearly 300 jobs this year. Our inability moving forward to attract and retain millennials to our region could especially be felt in Juneau, where childcare availability has reached historic lows. Inability to find reasonable housing and childcare (especially in the face of reduced school spending) is a major deterrent to young families looking to move here, as well as for those who are trying to stay.

 

Knowing all of this gives us a chance to dig deep and reinvent ourselves as a region. Growing our economy from this point forward is going to require hard work, new ideas, and a passion for all things Southeast Alaska. Fortunately our greatest asset is the people and organizations that have these qualities. We will continue to grow into the Southeast Alaska we want to be, as long as we have a vision and continue our efforts to achieve it.

 

• Meilani Schijvens, a lifelong Juneauite, is the owner of Rain Coast Data and authors a monthly column by the same name. She has 20 years of professional and academic experience in the fields of economics, transportation and natural resources relating to Southeast Alaska.