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Long federal shutdown could affect Alaska economy

Federal employees make up almost 5 percent of all Alaskan workers

Posted: October 14, 2013 - 1:33pm  |  Updated: October 15, 2013 - 12:06am

FAIRBANKS — Alaska has the nation’s third highest proportion of federal workers, but a state economist says it’s difficult to tell whether a partial government shutdown will have a lasting effect on Alaska’s economy.

The effect will be more pronounced the longer the shutdown continues, state Department of Labor economist Neil Fried said.

“There’s no doubt that it’s having an effect,” Fried said. “The question is how extensive is it. That’s impossible to tell.”

Every Alaska census area is affected, the Fairbanks Daily News-Miner reported.

Federal employees make up nearly 5 percent of all workers in the state, ranking behind only Maryland and Hawaii. The numbers do not include contractors who bid for federal work.

The military has 23,237 people in Alaska. Another 16,390 civilians work for the federal government in the state. Of the latter figure, 5,175 work for the Department of Defense.

Military employees were not furloughed and most of those DOD employees were called back to work Oct. 7.

“That certainly softens it, there’s no doubt about that,” Fried said. “That’s certainly good news for Fairbanks.”

Fairbanks has the highest concentration of military personnel and Defense Department employees in the state.

Many rural census areas, however, do not have a military presence.

More than a quarter of the workers in southeast Alaska’s Hoonah-Angoon census area were employed by the federal government. The federal government employs 17 percent of the wage earners in the Denali Borough.

“This is a big story for Alaska. It’s a big story for Alaska’s economy,” Fried said, “in some of the smaller places in Alaska where opportunities generally are pretty scarce in the first place.”

The federal department with the second highest number of employed Alaskans — 2,645 — is the Interior Department. They remain on furlough.

A partial federal shutdown in 1996 shutdown lasted three weeks. Fried said he reviewed economic data from then and could spot significant effects.

The current partial shutdown has created issues for groups dependent on federal grants, such as Alaska Native corporations and the University of Alaska.

The shutdown’s effect would become more evident the longer it lasts, Fried said.

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