A Snapshot of the Alaska Economy

1
A Snapshot of the Alaska Economy

• AFN Leadership Forum
• Steve Colt
• UAA Institute of Social and Economic Research
• 6 July 2006

2
Acknowledgments

• Funding
• Alaska Council on Economic Education
• University of Alaska Foundation
• Previous work
• Scott Goldsmith, ISER
• Helpful comments
• Cynthia Casas, Steve Jackstadt

3
These slides available at

• www.iser.uaa.alaska.edu

4
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

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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
6
Alaska gross state product36 billion in 2004
U.S. Bureau of Economic Analysis
7
Alaska gross state product compared to other
states
U.S. Bureau of Economic Analysis
8
Alaska gross state product a closer look
U.S. Bureau of Economic Analysis
9
Alaska gross state product compared to other
countries
U.N. Human Development Report 2005
10
Structure of the Alaska economy

• subsistence
• the five driving sectors
• how we got here
• looking ahead

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Subsistenceis a vital part of the Alaska economy
Total subsistence harvests exceed 53 million
pounds
ISER, ADFG
12
Sources of jobs in the cash economy
personal assets 10
oil and gas 32
tourism, cargo 10
fishing, mining, timber 10
federal govt 35
about 400,000 total jobs in 2004
13
Oil and gas126,800 jobs (32)
ISER
14
Federal spending141,600 jobs (35)
ISER
15
Seafood, mining, and timber 50,400 jobs
(13)
ISER
16
Tourism and air cargo 39,800 jobs (10)
ISER
17
Personal assets (mailbox economy) 41,400 jobs
(10)
ISER
18
Growth of Alaska employment1965-2000
photos
ISER
19
Alaska economy looks more like the U.S. over time
U.S. Census
20
Regional variationhow is remote Alaska
different?

• jobs
• income
• demographics
• infrastructure

21
Unemployment
Alaska DOLWD
22
Average annual wage salary earnings in private
industry (2000)
Alaska DOLWD
23
Rural Alaska runs on expensive dieselbarrels oil
per person per year
24
Who will need jobs?Age distributions, year 2000
Anchorage
remote rural AK
U.S. census
25
Internet availability to communities(not the
same as actual connections)
Regulatory Commission of AK 2005
26
Looking ahead

• strengths and areas of concern

27
Concern Oil production is declining
Oil Production 1969 - 2022
Prudhoe Bay
Kuparuk
Alaska Department of Natural Resources
28
We have been rescued for now - by high oil
prices
State Oil Revenues
Alaska Department of Revenue, author calculation
29
Strength Permanent fund earnings roughly equal
oil revenues
30
Strength Small firms are a vital part of todays
economy.

• 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
31
Private sector employment by size of firm (year
2005)
more than 500
Less than 50 employees
100-500
50-100
Alaska DOLWD
32
Strength Alaska leads the nation in household
internet usage

• 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
33
Strength Alaska has low inequalityGini
coefficients for countries and regions(0
complete equality100 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
34
concern formal ownership of Alaska lands
Total 375 million acres
35
Strength and concernAlaska age distribution
includes many young people entering labor force
U.S. (year 2000)
Alaska (year 2000)
U.S. Census
36
Were all in this together.
www.iser.uaa.alaska.edu