Southeast Alaska will lose the most jobs since 2009, according to a new forecast from the Alaska Department of Labor.
State economist Conor Bell published his work Thursday in this month’s issue of Alaska Trends magazine. Bell forecasts a 1.4 percent decline in the number of jobs in Southeast Alaska.
“I anticipate the losses to be the greatest since 2009, where we lost about 2 percent of employment,” he said.
Statewide, Alaska is expected to lose about 2,500 jobs in 2016, a 0.7 percent decline. If accurate, it would be the first decline in jobs since 2009.
In that year, Southeast Alaska was splashed by the Great Recession, which struck tourism hard.
This time around, cuts to state government are the culprit behind the forecasted decline.
“Within the region,” Bell wrote, “Juneau will be hit hardest because it has the majority of the region’s state jobs.”
While it isn’t certain how much the Alaska Legislature will cut the state’s budget this year, Bell said job losses will take place regardless of layoffs. The state has a large number of older workers, and as Baby Boomers age, retirements are expected to increase.
Bell forecasts 350 state government jobs will be lost this year in Southeast Alaska, a 6.7 percent cut to the region’s 5,250 state employees. Those losses will have secondary effects on the economies of communities throughout Southeast.
“As those jobs go away,” Bell said, “it depresses demand, so fewer people are buying goods and services, and that could eventually impact employment in other sectors like retail or leisure and hospitality.”
Those secondary effects would not show up until 2017, he said.
Balancing the grim forecast for state government employment is a positive picture for tourism and health care, where employment is expected to rise.
There’s a dark lining to that silver cloud, however. Tourism jobs tend to be seasonal, and they pay much less than government jobs do.
“That’s one of the shortcomings of counting employment,” Bell said. “They’re counted as equivalent, but one does bring a lot more of an economic impact.”
If Bell’s forecast losses come to pass, it would be the third consecutive year of job losses in Southeast Alaska.
That decline, however, is much less than was seen in the 1990s, when the timber industry peaked at 3,543 jobs in 1991. Today, it employs fewer than 830 people, the lowest figure since the 1890s.
“We’ve weathered things before,” Bell said.