a snapshot of the alaska economy
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A Snapshot of the Alaska Economy. AFN Leadership Forum Steve Colt UAA Institute of Social and Economic Research 6 July 2006. Acknowledgments. Funding: Alaska Council on Economic Education University of Alaska Foundation Previous work: Scott Goldsmith, ISER Helpful comments: - PowerPoint PPT PresentationTRANSCRIPT
A Snapshot of theA Snapshot of the Alaska Economy Alaska Economy
AFN Leadership ForumSteve Colt
UAA Institute of Social and Economic Research6 July 2006
AcknowledgmentsAcknowledgments
Funding:Funding:
Alaska Council on Economic EducationAlaska Council on Economic Education
University of Alaska FoundationUniversity of Alaska FoundationPrevious work:Previous work:
Scott Goldsmith, ISERScott Goldsmith, ISER
Helpful comments:Helpful comments:
Cynthia Casas, Steve JackstadtCynthia Casas, Steve Jackstadt
These slides available at:These slides available at:
www.iser.uaa.alaska.edu
OverviewOverviewSize: Size: – How big is the Alaska economy?How big is the Alaska economy?
Structure:Structure:– What drives the Alaska economy?What drives the Alaska economy?– How is that changing?How is that changing?
Regional variation:Regional variation:– How is remote Alaska different?How is remote Alaska different?
Looking ahead:Looking ahead:– Strengths and areas of concernStrengths and areas of concern
How big is the Alaska economy?How big is the Alaska economy?(year 2004)(year 2004)
population: population: 658,000658,000total employment: total employment: 400,000400,000– includes military, proprietorsincludes military, proprietors
personal income: personal income: $22 billion$22 billiongross state product: gross state product: $36 billion$36 billion– value of production occurring within the statevalue of production occurring within the state– includes wages and profits going to includes wages and profits going to
nonresidentsnonresidents
ISER, AK DOLWD, U.S. BEA
Alaska gross state product:Alaska gross state product:$36 billion in 2004$36 billion in 2004
U.S. Bureau of Economic Analysis
All other GSP64%
Petroleum related
36%
Alaska gross state productAlaska gross state product compared to other states compared to other states
U.S. Bureau of Economic Analysis
22 23
36
229
907
1,519
0
200
400
600
800
1000
1200
1400
1600b
illio
ns
of
do
llars
Ve
rmo
nt
N. D
ak
ota
Ala
sk
a
U.S
.a
ve
rag
e
Ne
w Y
ork
Ca
lifo
rnia
Alaska gross state product:Alaska gross state product: a closer look a closer look
U.S. Bureau of Economic Analysis
22.0 22.9
27.629.7
36.041.8
50.2
0
10
20
30
40
50
60b
illio
ns
of
do
llars
Ve
rmo
nt
AK
no
n-
pe
tro
leu
m
Mo
nta
na
S. D
ak
ota
Ala
sk
a
Rh
od
eIs
lan
d
Ha
wa
ii
Alaska gross state productAlaska gross state product compared to other countries compared to other countries
9.022.9
35.0 36.0 38.5
90.5
171.9
0
20
40
60
80
100
120
140
160
180
bill
ion
s o
f d
olla
rs
Icel
and
AK
no
n-
pet
role
um
Nep
al
Ala
ska
Co
sta
Ric
a
New
Zea
lan
d
No
rway
U.N. Human Development Report 2005
StructureStructure of the Alaska economy of the Alaska economy
subsistencesubsistence
the five driving sectorsthe five driving sectors
how we got herehow we got here
looking aheadlooking ahead
SubsistenceSubsistenceis a vital part of the Alaska economyis a vital part of the Alaska economy
Total subsistence harvests exceed 53 million pounds
ISER, ADF&G
Sources of jobsSources of jobs in the cash economy: in the cash economy:
aboutabout 400,000 total jobs in 2004 400,000 total jobs in 2004
oil and gas 32%oil and gas 32%
federal govt 35%federal govt 35%
fishing, mining, fishing, mining, timber 10%timber 10%
tourism, cargo 10% tourism, cargo 10%
personal assets 10% personal assets 10%
Oil and gas:Oil and gas:126,800 jobs (32%)126,800 jobs (32%)
Permanent fund,
40,900
Recycled taxes, 29,600
Other Sectors, 273,200
Oil production,
56,300
ISER
Federal spending:Federal spending:141,600 jobs (35%)141,600 jobs (35%)
Civilian, 87,800
Other Sectors, 258,400
Military, 53,800
ISER
Timber, 6,200
Mining, 8,700
Other Sectors, 349,600
Agriculture, 500
Seafood, 34,900
Seafood, mining, and timber:Seafood, mining, and timber: 50,400 jobs (13%) 50,400 jobs (13%)
ISER
Tourism and air cargo:Tourism and air cargo: 39,800 jobs (10%) 39,800 jobs (10%)
Other Sectors, 360,200
Air cargo, 5,600
Tourism, 34,200
ISER
Personal assets (mailbox economy)Personal assets (mailbox economy) 41,400 jobs (10%) 41,400 jobs (10%)
Other Sectors, 358,600
Personal assets, 41,400
ISER
Growth of Alaska employmentGrowth of Alaska employment1965-20001965-2000
1965 1970 1975 1980 1985 1990 1995
0
50
100
150
200
250
300
350
0
50
100
150
200
250
300
350
SUPPORT STATE / LOCAL GOVT INFRASTRUCTURE BASIC
ALASKA EMPLOYMENTTHOUSANDS
[photos]
ISER
Alaska economy looks more like Alaska economy looks more like the U.S. over timethe U.S. over time
Employment Mix by Census Class of Worker
0%
20%
40%
60%
80%
100%
AK 1990 AK 2000 ANC-MatSu
US 2000
Self
Govt
Private Wage
U.S. Census
Regional variation:Regional variation:how is remote Alaska different?how is remote Alaska different?
jobsjobs
incomeincome
demographicsdemographics
infrastructureinfrastructure
UnemploymentUnemployment
Alaska DOLWD
Average annual wage & salary Average annual wage & salary earnings in private industry (2000)earnings in private industry (2000)
$34,404
$70,905
$45,015
$28,829
$26,457
$26,342
$24,911
$23,691
$16,081
Anchorage
NSB
NW Arctic
Dillingham
Nome
Lake & Peninsula
Bethel
Yukon-Koyukuk
Wade Hampton
Alaska DOLWD
Primary Energy Inputs per Alaskan
-
10
20
30
40
50
60
70
Alaska GasNetwork
PCEplaces
Other
Bar
rels
of
Oil
per
Yea
r
Wood and allotherOther petroleum
Gasoline
Diesel
Hydro
Coal
Natural Gas
Rural Alaska runs on expensive Rural Alaska runs on expensive dieseldiesel
barrels oil per person per yearbarrels oil per person per year
Who will need jobs?Who will need jobs?Age distributions, year 2000Age distributions, year 2000
AnchorageAnchorage remote rural AKremote rural AK
3,000 2,000 1,000 0 1,000 2,000 3,000
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
85
90
95
100-104
female male
1,000 500 0 500 1,000
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
85
90
95
100-104
female male
U.S. census
Internet availability to communitiesInternet availability to communities(not the same as actual connections)(not the same as actual connections)
Regulatory Commission of AK 2005
85.6% 97.0%
0%
20%
40%
60%
80%
100%
120%
remote rural rest of state
uncertain
broadband
dial-up
none
Looking ahead:Looking ahead:
strengths and areas of concernstrengths and areas of concern
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 2019Year
Bar
rels
per
Day
Concern:Concern: Oil production is Oil production is declining…declining…
NPRA
Other NS
Northstar
Colville R
Badami
Duck Island
GPMcIntyre
Milne Pt
KRU.IPA+Sat
PBU.IPA+Sat
Cook Inlet
Alaska Department of Natural Resources
Prudhoe Bay
Kuparuk
Oil Production 1969 - 2022
We have been rescued – for now - We have been rescued – for now - by high oil pricesby high oil prices
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
1985 1990 2000 2005
mil
lio
ns
of
year
200
5 re
al d
oll
ars
Corporate Income
Severance Tax
Royalties
State Oil Revenues
Alaska Department of Revenue, author calculation
StrengthStrength:: Permanent fund earnings Permanent fund earnings roughly equal oil revenues roughly equal oil revenues
More than 40% of private sector jobs are More than 40% of private sector jobs are with firms of less than 50 peoplewith firms of less than 50 people– average size = 6 peopleaverage size = 6 people
More than 50% of private sector jobs are More than 50% of private sector jobs are with firms of less than 100 peoplewith firms of less than 100 peopleThese data do not include proprietors:These data do not include proprietors:– most fishers, many professionalsmost fishers, many professionals– Therefore, true size of the small-business Therefore, true size of the small-business
sector is significantly largersector is significantly larger
Strength:Strength: Small firms are a vital Small firms are a vital part of today’s economy….part of today’s economy….
Alaska DOLWD, author calculation
Private sector employmentPrivate sector employment by size of firm (year 2005) by size of firm (year 2005)
Alaska DOLWD
98,892
52,857
52,522
24,097
Less than 50 employees
50-100
100-500
more than 500
Strength:Strength: Alaska leads the nation Alaska leads the nation in household internet usagein household internet usage
% of households with internet access (2003)% of households with internet access (2003)
– Alaska 68.5Alaska 68.5
– New Hampshire 65.5New Hampshire 65.5
– Colorado 63.4Colorado 63.4
– Connecticut 62.9Connecticut 62.9
– Utah 62.6Utah 62.6
U.S. Census
Strength:Strength: Alaska has Alaska has low inequalitylow inequality
Gini coefficients for Gini coefficients for countries and regionscountries and regions
((0 = complete equality0 = complete equality100 = complete inequality)100 = complete inequality)
Alaska estimated by author from US Census American Community Survey 2004 – household income
UN Human Development Report 2005 Chap 2 – per capita income
Alaska 38.0(based on household income)
concern:concern: formal ownership of Alaska landsformal ownership of Alaska lands
104
152
73
44 6
State
Fed conservation
Other Fed
ANCSA
Other Private
Total 375 million acres
Strength and concern:Strength and concern:Alaska age distribution includes many Alaska age distribution includes many
young people entering labor forceyoung people entering labor force
U.S. U.S. (year 2000)(year 2000) Alaska Alaska (year 2000)(year 2000)
3,000,000
2,000,000
1,000,000
0 1,000,000
2,000,000
3,000,000
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
85
90
95
100-104
female male
10,000 5,000 0 5,000 10,000
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
85
90
95
100-104
female male
U.S. Census
We’re all in this We’re all in this together.together.
www.iser.uaa.alaska.edu