Some SE towns suffering economic distress

Juneau's economy has been doing fairly well in the past decade, unlike the rest of Southeast Alaska, according to an analysis by a Juneau research and consulting firm.

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From 1990 to 1999, Juneau's employment rose 18 percent; while Sitka fell 2 percent; Wrangell-Petersburg fell 3 percent; Haines dropped 8 percent; Ketchikan's employment slipped by 9 percent; and Skagway-Hoonah-Yakutat experienced a 17 percent drop, Jim Calvin of the McDowell Group told a Juneau Chamber of Commerce meeting on Friday.

Overall, Southeast employment rose 4 percent and the state as a whole rose 16 percent, he said.

Statistics show Southeast communities suffering major economic distress in the 1990s, but indicators show that the worst is behind us, Calvin concluded.

Payroll trends for 1990-99 showed Juneau up 6; Sitka down 13 percent; Haines down 19 percent; Ketchikan down 21 percent; and Skagway-Hoonah-Yakutat down 35 percent. Southeast was off 9 percent overall while Alaska as a whole was up 5 percent.

"Juneau typically tracks Alaska, but the rest of the region is separate," Calvin said. "Primarily this is due to the timber industry."

Downturns in Southeast's timber industry began in 1990 with the shutdown of the Haines sawmill, the community's single largest employer.

In 1994 came the closure of the Wrangell sawmill, followed by the 1997 closure of the Ketchikan pulp mill.

These closures meant the "loss of hundreds of year-round, high-paying jobs," Calvin said.

Wage trends in real dollars, 1990-99, were minus 10 percent for Juneau; minus 12 percent for Sitka, Haines and Southeast; and minus 13 percent for Ketchikan. Alaska was minus 10 percent.

As to personal income in real dollars including permanent fund dividends for the same period, Juneau was up 14 percent; Haines was minus 1 percent; Ketchikan was down 7 percent; Prince of Wales was off 11 percent; Skagway-Hoonah-Yakutat was minus 6 percent; and Southeast overall was plus 2 percent.

Per capita income in Juneau in 1999 was $33,974, while Alaska was $28,629 "substantially above the U.S. average but the gap is shrinking," Calvin noted.

Income in Juneau has been flat over the last decade "but it has escaped the down trends of the timber industry," he said.

All over Southeast, the number of proprietors and self-employed people is increasing. Many of these jobs are in tourism, bed-and-breakfasts and cab driving, translating into lower incomes, he said.

The exception was higher-paying jobs created by the building of a SouthEast Alaska Regional Health Consortium hospital in Sitka, he said.

Like Jon Carter of DIPAC who spoke to the Chamber two weeks earlier, Calvin noted the competition of Chilean seafood.

"Everyone knows that we have been battling farmed fish, which now accounts for about 60 percent of world salmon production," he said. He suggested Alaska "take measures to penalize the Chileans."

"In the 1970s and 1980s, the world came to Alaska and knocked on our door for timber and seafood, and it's not doing that any more," Calvin said. "We need to take Alaska to market."

The numbers Calvin put forward "offer some pessimism - but we are optimistic at the bank," said Lloyd Johnson, vice president of First National Bank, who attended the talk. "We are lending money right and left and taking deposits right and left."

Johnson agreed with Calvin that Southeast must get out and sell itself.

"We need to do that with tourism and even in respect to keeping our Capitol at the corner of Fourth and Main," Johnson said. "We can't wait for business to walk in the door. As I continually tell my loan officers, you gotta get out there and be on the street."

Ann Chandonnet can be reached at achandonnet@juneauempire.