A Snapshot of the
Alaska Economy
AFN Leadership Forum
Steve Colt
UAA Institute of Social and Economic Research
6 July 2006
Acknowledgments
Funding:
Alaska Council on Economic Education
University of Alaska Foundation
Previous work:
Scott Goldsmith, ISER
Helpful comments:
Cynthia Casas, Steve Jackstadt
These slides available at:
www.iser.uaa.alaska.edu
Overview
Size:
– How big is the Alaska economy?
Structure:
– What drives the Alaska economy?
– How is that changing?
Regional variation:
– How is remote Alaska different?
Looking ahead:
– Strengths and areas of concern
How big is the Alaska economy?
(year 2004)
population: 658,000
total employment: 400,000
– includes military, proprietors
personal income: $22
billion
gross state product: $36 billion
– value of production occurring within the state
– includes wages and profits going to
nonresidents
ISER, AK DOLWD, U.S. BEA
Alaska gross state product:
$36 billion in 2004
All other
GSP
64%
U.S. Bureau of Economic Analysis
Petroleum
related
36%
Alaska gross state product
compared to other states
1600
1,519
1200
907
1000
800
600
229
400
U.S. Bureau of Economic Analysis
California
New York
U.S.
average
23
Alaska
0
22
N. Dakota
200
36
Vermont
billions of dollars
1400
Alaska gross state product:
a closer look
60
50.2
36.0
40
30
22.0
22.9
AK nonpetroleum
27.6
Vermont
billions of dollars
50
41.8
29.7
20
U.S. Bureau of Economic Analysis
Hawaii
Rhode
Island
Alaska
S. Dakota
0
Montana
10
Alaska gross state product
compared to other countries
171.9
180
140
120
90.5
100
40
38.5
U.N. Human Development Report 2005
Norway
New
Zealand
9.0
Costa Rica
0
36.0
22.9
AK nonpetroleum
20
35.0
Alaska
60
Nepal
80
Iceland
billions of dollars
160
Structure
of the Alaska economy
subsistence
the five driving sectors
how we got here
looking ahead
Subsistence
is a vital part of the Alaska economy
Total subsistence harvests
exceed 53 million pounds
ISER, ADF&G
Sources of jobs
in the cash economy:
personal assets 10%
tourism, cargo 10%
oil and gas 32%
fishing, mining,
timber 10%
federal govt 35%
about 400,000 total jobs in 2004
Oil and gas:
126,800 jobs (32%)
Oil
production,
56,300
Other
Sectors,
273,200
ISER
Recycled
taxes,
29,600
Permanent
fund,
40,900
Federal spending:
141,600 jobs (35%)
Military,
53,800
Civilian,
87,800
Other
Sectors,
258,400
ISER
Seafood, mining, and timber:
50,400 jobs (13%)
Seafood,
34,900
Other
Sectors,
349,600
ISER
Mining,
8,700 Timber,
6,200
Agriculture,
500
Tourism and air cargo:
39,800 jobs (10%)
Tourism,
34,200
Other
Sectors,
360,200
ISER
Air cargo,
5,600
Personal assets (mailbox economy)
41,400 jobs (10%)
Personal
assets,
41,400
Other
Sectors,
358,600
ISER
Growth of Alaska employment
1965-2000
ALASKA EMPLOYMENT
THOUSANDS
350
300
350
[photos]
300
250
250
200
200
150
150
100
100
50
50
0
0
1965
1970
SUPPORT
ISER
1975
1980
STATE / LOCAL GOVT
1985
1990
INFRASTRUCTURE
1995
BASIC
Alaska economy looks more like
the U.S. over time
Employment Mix by
Census Class of Worker
100%
80%
60%
40%
Self
20%
Govt
Private Wage
0%
AK 1990
U.S. Census
AK 2000
ANCMatSu
US 2000
Regional variation:
how is remote Alaska different?
jobs
income
demographics
infrastructure
Unemployment
Alaska DOLWD
Average annual wage & salary
earnings in private industry (2000)
Wade Hampton
Yukon-Koyukuk
Bethel
$16,081
$23,691
$24,911
Lake & Peninsula
$26,342
Nome
$26,457
Dillingham
$28,829
NW Arctic
$45,015
NSB
Anchorage
Alaska DOLWD
$70,905
$34,404
Rural Alaska runs on expensive
diesel
Barrels of Oil per Year
barrels
oil per person per year
Primary Energy Inputs per Alaskan
70
60
50
Wood and all
other
Other petroleum
40
Gasoline
30
Diesel
20
10
Hydro
-
Coal
Alaska
Gas
PCE
Network places
Other
Natural Gas
Who will need jobs?
Age distributions, year 2000
100-104
95
90
85
80
100-104
95
90
85
80
75
70
65
60
75
70
65
60
55
55
50
45
40
35
50
45
40
35
30
30
25
20
15
10
25
20
15
10
5
5
0
3,000
0
2,000
1,000
female
U.S. census
0
1,000
2,000
male
Anchorage
3,000
1,000
500
0
female
500
1,000
male
remote rural AK
Internet availability to communities
(not the same as actual connections)
120%
100%
80%
60%
85.6%
97.0%
remote rural
rest of state
40%
20%
0%
Regulatory Commission of AK 2005
uncertain
broadband
dial-up
none
Looking ahead:
strengths and areas of concern
Oil production is
declining…
Concern:
Oil Production 1969 - 2022
2,500,000
NPRA
Other NS
Northstar
Barrels per Day
2,000,000
Colville R
Badami
Duck Island
1,500,000
GPMcIntyre
Milne Pt
KRU.IPA+Sat
1,000,000
PBU.IPA+Sat
Prudhoe Bay
Cook Inlet
Kuparuk
500,000
0
1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 2019
Year
Alaska Department of Natural Resources
We have been rescued – for now by high oil prices
millions of year 2005 real dollars
State Oil Revenues
4,500
4,000
3,500
3,000
Corporate Income
2,500
Severance Tax
2,000
Royalties
1,500
1,000
500
1985
1990
Alaska Department of Revenue, author calculation
2000
2005
Permanent fund earnings
roughly equal oil revenues
Strength:
Small firms are a vital
part of today’s economy….
Strength:
More than 40% of private sector jobs are
with firms of less than 50 people
– average size = 6 people
More than 50% of private sector jobs are
with firms of less than 100 people
These data do not include proprietors:
– most fishers, many professionals
– Therefore, true size of the small-business
sector is significantly larger
Alaska DOLWD, author calculation
Private sector employment
by size of firm (year 2005)
52,522
more
than 500
Less than 50
employees
100-500
52,857
50-100
24,097
Alaska DOLWD
98,892
Alaska leads the nation
in household internet usage
Strength:
% of households with internet access (2003)
– Alaska 68.5
– New Hampshire 65.5
– Colorado 63.4
– Connecticut 62.9
– Utah 62.6
U.S. Census
Strength: Alaska
has
low inequality
Gini coefficients for
countries and regions
(0 = complete equality
100 = complete inequality)
Alaska 38.0
(based on household income)
Alaska estimated by author from US Census
American Community Survey 2004 – household
income
UN Human Development Report 2005 Chap 2 –
per capita income
concern:
formal ownership of Alaska lands
44
6
Total 375 million acres
104
State
Fed conservation
73
Other Fed
ANCSA
Other Private
152
Strength and concern:
Alaska age distribution includes many
young people entering labor force
100-104
95
90
85
80
75
70
65
60
55
50
45
40
100-104
95
90
85
80
75
70
65
60
55
50
45
40
35
35
30
25
20
15
10
5
0
30
25
20
15
10
5
3,000,0 2,000,0 1,000,0
00
00
00
female
U.S. Census
0
1,000,0 2,000,0 3,000,0
00
00
00
male
U.S. (year 2000)
0
10,000
5,000
0
female
5,000
10,000
male
Alaska (year 2000)
We’re all in this
together.
www.iser.uaa.alaska.edu