Unemployment Woes in Southwest Alaska

Validating what has long been documented by the state of Alaska Economic Trends reports, southwest Alaska continues to struggle to maintain a stable economy due to a lack of year-round employment opportunities, one of the highest costs of living in the nation and seasonal local industries. Facing these consistent issues, residents in the Bristol Bay region are challenged to make ends meet and maintain cultural values as reported in the recently published Pebble Environmental Baseline Document (EBD).

The majority of socioeconomic studies were undertaken between 2004 and 2008 as part of the EBD with subsequent data for some areas included from 2009 and 2010. The studies encompass both the Bristol Bay and Cook Inlet drainage areas. The economic studies included information on employment, labor force status, key employers, basic industries, income, occupation, unemployment and other data.

According to the 2000 Census, the data available at the time of the EBD socioeconomic studies show that throughout the Lake and Peninsula Borough in 1999, 19 percent of the population lived below the poverty level. Data from the 2010 Census, which was conducted post EBD efforts, revealed that overall nine percent of Alaska residents live below the poverty level, 16 percent live below the poverty level in the Lake and Peninsula Borough and nearly eight percent and 18 percent live below the poverty level in the Bristol Bay Borough and Dillingham Census Area respectively. As unemployment increases in the region and job opportunities remain scarce, residents look for stable, year-round work elsewhere. However, in rural Alaska, leaving the community to find a job far from home is not a cultural ideal.

Three industries drive the regional economy in the Bristol Bay study area: Commercial fishing/seafood processing, tourism and government. Of these three primary economic resources, only government provides significant year-round employment.

Commercial Fishing

Overwhelmingly, the majority of fishing jobs are seasonal, running roughly from June through mid-August. According to the 2009 Alaska Department of Labor and Workforce Development statistics, of the estimated $24 million in annual wages from the Bristol Bay fishery processing industry in 2008, 84 percent of industry wages are associated with non-residents, a number confirmed within the EBD research.

In 2009, results from the EBD studies show that 54 percent of the 1,444 total drift gillnet permits fished were owned by non-resident permit holders, who harvested 62 percent of the 157 million pounds of salmon for the fishery while collecting 81 percent of the fisheries total ex-vessel value of $81 million.

Visitor Industry

While tourism is an important industry in southwest Alaska, it is considered luxury or high-end travel due to the cost associated for trips per person and lack of easy access to activities, which limits growth potential. An average sport fishing trip in southwest Alaska, which generally requires chartered air flights, lodge accommodation and often guide services can range from $2,500 to $8,000 per person. Likewise, other popular activities in the area, such as bear viewing or hunting carry similar price tags. The short summer tourism season, May through September, is an added challenge.

Government

Government is the largest regional source of year-round employment in the Lake and Peninsula Borough. In 2008, government accounted for a monthly average of 424 jobs and nearly $11.5 million in annual payroll. Local government accounted for 373 jobs in the borough, with 42 federal government jobs and nine state government jobs reported.

Cost of Living

Because southwest Alaska is not connected to the main road system, costs for basic goods and services, which have to be transported by boat or airplane, are extremely high. The EBD reports that in May of 2010, gas prices per gallon in the region ranged from $5.12 in the town of Newhalen up to $7.50 in Iguigig. Currently, reports from independent sources show gas prices continuing to rise in southwest Alaska.

To review the full EBD presentation of socioeconomic studies, or a condensed technical summary of the EBD socioeconomic studies visit www.pebbleresearch.com.