Reasons to be optimistic with best job market in generations

UAA Economic Professor Kevin Berry, and Dr. Bret Watson with the Institute of Social and Economic Research at UAA sat for separate interviews regarding the state of the economy in Alaska.

Talking with them about changes in oil prices, war in Ukraine and the recent infrastructure bill, one point they both agreed on was the unique, generational opportunity facing workers in the job market today.

Watson, whose research focuses on mineral and energy economics, talked about the impact higher oil prices will have for the state. While budget problems facing the state have been somewhat alleviated by the recent spike in prices, we probably won’t see a huge increase in oil related jobs like during past booms.

According to Watson, the state typically sees the most job creation when new wells are drilled. At the moment, the appetite by investors to develop new projects on the North Slope just isn’t there.

Also, due to recently low prices, oil producers have become more efficient and, as he said, “they’re never going to forget how to do things more efficiently.”

That’s not to say today’s prices won’t result in the creation of some new oil related jobs. And if prices stay up in the long term, we might see renewed interest for investment in North Slope projects.

Turning to another industry in the state, Watson, with Bob Loeffler, recently published a paper for ISER on the economic potential for the mining industry in Alaska 20 years down the road. Given favorable conditions, the industry could employ 8,472 people, compared to the rough 3,876 people employed in 2019.

To achieve the favorable scenario, the paper outlines five areas of potential improvements in the state. That scenario also relies on higher mineral prices and public support for mining projects.

Both Watson and Berry cited the pandemic as a factor contributing to the hot job market. Alaska is still down significantly from its pre-pandemic employment numbers in 2019.

In Feb, the US Bureau of Labor Statistics reported that the rate of job openings in Dec 2021 for Alaska was the highest in the nation at 9.3%, totaling around 32,000 jobs.

An area hit especially hard was the tourism industry, which Berry said could see a lot of opportunities this year based on the number of cruise ships coming into the state, though that will largely depend on how full the ships are.

Watson pointed to Alaska’s strong health care industry for job seekers, noting it was the health care sector that pulled the state out of a recession in 2019, before COVID.

Another tailwind for job hunters Watson and Berry mentioned is the employment gap caused by the older population leaving the workforce. According to Berry, 50% of people over 55 have retired.

A big factor that will, as Watson described it, “exacerbate tightness in labor markets,” is the bipartisan infrastructure bill passed by congress. At a symposium hosted by Senator Lisa Murkowski on the bill, Communications Director for Sen. Murkowski, Karina Borger, mentioned that the state has already locked in $1.2 billion in funds.

Much of the money in the bill has yet to be awarded. State and local governments, in addition to other organizations, will have to apply for these funds via competitive grants. The symposium was organized to help connect various stakeholders and educate them on the grant writing process.

Infrastructure Investment Coordinator for the governor’s office, Miles Baker, said, “the long-term opportunity for our state is huge.”

He also said, “I certainly believe, and I think the governor believes, and most Alaskans believe we’re uniquely positioned to be competitive.”

For people in project management, logistics, engineering, construction, and the trades, Watson sees numerous jobs tied to the infrastructure bill.

There are a few other potential industries and markets that were mentioned.

Berry talked a little about the expansions being made at the Ted Stevens International airport.

Watson suggested the tensions with Russia over its war with Ukraine as a cause for upwards pressure on mineral and energy prices. Alaska’s seafood industry also depends on seasonal labor from Eastern Europe, according to Watson, so it is another area that will experience higher demand.

Regarding some benefits to working in Alaska, Watson mentioned low taxes, the PFD and historically higher wages compared to cost-of-living expenses.

To illustrate this last point, Watson pointed to himself, saying that on his salary he might not be able to afford a home in California, but in Anchorage it is much more reasonable.

Berry brought up the fact that Alaska is normally countercyclical with the Lower 48, so typically we’d see an inflow of workers to the state as the economy heats up. But with hot labor markets across the country, this puts even more pressure on in-state employers to raise wages. This, by Berry’s estimate, could produce a great opportunity for people who want to stay in Alaska.

Berry mentioned the flip side as well; anyone who is eyeing a dream job or desires to live in a big city like Seattle or Los Angeles has a unique opportunity to make that happen.

The University of Alaska has been hard hit by the worker labor shortage and many positions are available.

UA Acquisition Talent Specialists Charla Bodle and Chris Triplett talked about the number of positions open and some of the benefits of working at UAA.

At time of writing there are nearly 200 openings that have benefits in the UA system. Job types are across the board: faculty, administrative, trades, health, part time, etc.

One unique benefit the university offers is tuition waivers that can be used for children, as well as spouses. The waivers are effective immediately upon hiring.

Triplett mentioned that like other state jobs, most positions are Monday through Friday, 8-5pm. Also, there are several paid days off for holidays, though the university tends to consolidate them around major holidays instead of having them dispersed throughout the year, giving staff consecutive days off.

Some positions offer a hybrid of in-person and remote work flexibility.

But wherever job seekers may go, Berry gave a clear answer to the economic outlook for graduates: “Good time to be graduating college.” Also saying, “If I could pick a time, this would be it.”