• Military and civilian activities of the federal government remain critical to the economy. The federal government was a big part of Alaska’s economy before oil development—and today it still supports a third of all jobs for Alaskans. • Alaska now has five times more jobs—and those jobs are much more likely to be in stores, hotels, and other places that sell things to both residents and tourists. Fifty years ago, Alaskans had to order many items by mail and fly Outside to get some services.• Alaska’s health-care industry has grown enormously. In 1961 only about 1 in 100 Alaska jobs were in health care. Today it’s nearly 1 in 10.• Alaska’s population has tripled since 1960. But with 680,000 residents, Alaska still has only about as many people as Memphis, Tennessee. • Many more Alaskans are now Asian, Pacific Islander, or Black.• The federal government is still the biggest land owner, but its share is down from 99% to 60%. Most federal land in Alaska today is in parks, wildlife

refuges, and other conservation units.• Alaska’s state government now owns 28% of the land. The 1958 Alaska Statehood Act granted the new state 105 million acres.• Alaska Native corporations own about 12% of the land (44 million acres), under terms of the 1971 Alaska Native Claims Set-

tlement Act (ANCSA). That’s most of the privately owned land in Alaska.• Individuals, local govern-ments, and the University of Alaska together own around 1% of Alaska lands.(Continued on page 4)

UA Research Summary No.15 • September 2009Institute of Social and Economic Research • University of Alaska Anchorage

Alaska’s People and Economy, 1867-2009

Utterly worthless. That’s how a congressman from Missouri described Alaska in 1867, when the U.S. bought it from Russia. A lot of Americans agreed. For almost 100 years, hardly anyone—except some Alaskans—wanted Alaska to become a state.

But Alaska did finally become a state, in 1959. Today, after 142 years as a U.S. possession and 50 years as a state, Alaska has produced resources worth (in today’s dollars) around $670 billion. The U.S. paid $7.2 million for Alaska, equal to about $106 million now. For perspective, that’s roughly what the state government collected in royalties from oil produced on state-owned land in just the month of March 2009.

To help mark 50 years of statehood, this publication first takes a broad look at what’s changed in Alaska since 1959. That’s on this page and the back page. We’ve also put together a timeline of political and economic events in Alaska from 1867 to the pres-ent. That’s on the inside pages. There’s an interactive version of the timeline—with photos, figures, and more—on ISER’s Web site: www.iser.uaa.alaska.edu.

AlAskA 1959-2009: WhAt’s ChAnged?• Oil now pays the bills. At first, the new state government had a small income, mostly from a personal income tax and various smaller taxes. Then, in 1968, oil companies discovered a huge oil field, on lands the state owned on the North Slope. Income from oil production made the state wealthy and has paid almost all its general expenses for 40 years. Alaskans now pay no state income or sales taxes.• Alaska has built a very big sav-ings account. In 1976 Alaskans voted to put part of the state’s oil revenues into a special account the legislature couldn’t spend. With that decision, Alaskans used temporary oil revenues to create a permanent asset. The Permanent Fund had a balance of about $30.5 billion in May 2009.• The petroleum sector now directly and indirectly supports a third of all jobs for Alaskans. And an upcoming ISER analysis will show that the petroleum sector—which was very small in 1959—has been responsible for most of Alaska’s economic growth in the past several decades.

20081960 ,226,000 Alaskans,,

679,700 Alaskans

If superimposed on Lower 48, Alaska would cover 20% of land and stretch from coast to coast. Road system covers only

a small area of the state. Hundreds of communities areaccessible only by water or air.

Canada

Lower 48

AKLocation:1,500 miles by air from Anchorage to Seattle; 2,000 miles by road from Alaska border to Lower 48border

959085807570651961

57,000

2000 2007

317,000Alaska Wage and Salary Jobs

Source: Alaska Department of Labor, Research and Analysis

State General Revenues, In Billions of 2007 Dollars

$1

$7

OtherRevenues

Petroleum Revenues

1959 018369 74 77 80 9286 89 95 98 04 2008

$4

Sources: Scott Goldsmith, ISER data base; Alaska Department of Administration, Division of Finance

Alaska Native Corporations 12%

Individual Private/Municipal/University/

1%

State 28%

Land Before Statehood

Land Today

Federal99.5%

Federal59%

Non-Federal 0.5%

• The state government now makes annual cash payments to all residents. The state legislature can’t spend the principal of the Permanent Fund, but it can spend the earnings—money from the fund’s investments. Since the 1980s, the state has used part of the fund earnings for a program that’s unique among the states: annual cash payments to all Alaska residents. Those pay-ments (Permanent Fund “dividends”) fluctuate a lot, depending on how much the fund earns in a given period. Someone who had received the dividend every year from 1982 to 2008 would have collected $29,600—or about $38,000 in today’s dollars.• Alaska Native corporations that didn’t exist in 1959 now make up 1 in 6 of the state’s largest 100 private employers. The 1971 Alaska Native Claims Settlement Act awarded Alaska Native peoples land and money, but also established for-profit regional and village corporations to man-age those assets. Over the years a number of non-profit Alaska Native corporations have also been formed, to administer federal and state health and social service programs. Those for-profit and non-profit cor-porations employ thousands of Alaskans.• A bigger population and economy and improvements in technology have reduced (but not eliminated) the conditions that increase the costs of doing business and make development difficult in Alaska. Those con-ditions include Alaska’s huge size, its distance from markets and suppli-ers, and its harsh climate. • Costs of living are still very high and jobs are scarce in the state’s remote communities. Alaska’s jobs and people are concentrated in a handful of urban areas. But about 10% of Alaskans live in hundreds of small remote communities scattered around the state, far from roads and accessible only by water or air. The costs of living and doing business in those places can be double or triple the costs in larger Alaska places.

WhAt Might Be AheAd?• Alaska faces big challenges in the coming years—but fortunately, it now has many assets it didn’t have 50 years ago. Oil production, which supports so much of the state’s government and economy, is half of what it once was and is still dropping. There is still a lot of oil in Alaska, but it will be harder to get, and much of it isn’t on state-owned land—so the state’s revenue share will be smaller. Also, the federal govern-ment, another mainstay of Alaska’s economy, is dealing with serious budget problems that could affect its activities in Alaska.To help deal with those problems, Alaska today has a bigger and more diverse economy, more people, and improved infrastructure. And be-cause Alaskans decided more than 30 years ago to save some of the state’s oil revenues, the state government also has the Permanent Fund, which is capable of earning tens of billions of dollars over time.

(Tourism, seafood, mining, timber, air cargo, income of retirees, personal assets)

What Generates Jobs for Alaskans?

Source: Scott Goldsmith, ISER

Federal government

Petroleumsector

Other resources

35%

34%

31%

1982 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

$1,000a$404

$952.63 $990.30

$1963.86$1850.28

a1982 dividend was a special legislative appropriation from the General Fund, not PF earnings. bDoes not include special 2008 energy assistance payment of $1,200. Source: Alaska Permanent Fund Corporation

Permanent Fund Dividends Per Person, 1982-2008(Not Adjusted for In�ation)

$2,069b

2008

CCalista

Doyon

NANA

Bering Straits

CookInlet

Ahtna

Chugach Alaska

Aleut Koniag

SealaskaBristol Bay

Arctic Slope

Alaska Native Regional Corporations

Where Do Alaskans Live?

79%

12%9%

Urban areas (Anchorage, Fairbanks, Mat-Su, Kenai Peninsula, Juneau)

Remote rural communitiesin Western, Northern, and Interior Alaska

Rural communities in Southeast and Southcentral Alaska

Source: Alaska Department of Labor and Workforce Development, Research and Analysis

About ISER: ISER is part of the University of Alaska Anchorage. It was established in 1961, soon after Alaska became a state, and it is the oldest public policy research institute in Alaska. To learn more about ISER and its nearly 50 years of research, go to:

www.iser.uaa.alaska.edu

White

AlaskaNative

Asian/Pac. Isl.

Black 4%

72%

18%

6%

3%

1%

19%

77%

19602007

Source: Alaska Department of Labor, Research and Analysis

Alaska’s People

Editor: Linda Leask • Graphics: Clemencia Merrill

Prepared by ISER Faculty and Staff

200933,400 32,000 64,000 55,000 59,000 72,000 129,000 226,000 301,000 402,000 550,000 627,00064,000

*Mid-range projection, Alaska Department of Labor, Research and Analysis

Projectedpopulation after

50 years of statehood

1950s

691,000*1880 1900 1920 1940 1960 1980 20001867 1910 1930 1950 1970 19901890

Alaska Population Growth and Major Political and Economic Events, 1867 - 2009Gold line shows population change

Population at statehood

Sources: ISER publications, 1960-2009, and ISER MAP database; www.Alaskool.org (online materials about Alaska Native history, education, languages, and cultures); Alaska Department of Labor and Workforce Development, Research and Analysis section; Ernest Gruening, The State of Alaska, Random House; Alaska Digital Archives; Alaska State Library Historical Collections; University of Alaska Anchorage, Archives and Manuscripts Department; Anchorage Museum of History and Art at the Rasmuson Center; University of Alaska Fairbanks, Alaska and Polar Regions Collection; Prince William Sound Regional Citizens’ Advisory Council; Alaska Science Forum, Geophysical Institute, University of Alaska Fairbanks; Skagway, Alaska (www.skagway.com); National Park Service (www.nps.gov); Amiq Institute (www.amiq.org); Wikipedia; The Great Pandemic of 1918 (www.pandemic�u.gov); Aleut Regional Corporation; Explore North (explorenorth.com); Daily Alaska Empire, (Juneau, Alaska), November 30, 1945; The Northern Light, University of Alaska Anchorage, February 27, 2007; U.S. Geological Survey, National Earthquake Information Center and Historical Statistics for Mineral and Material Commodities in the United States; Alaska Journal of Commerce, December 14, 2008; Dorothy Jones, A Century of Servitude, University Press of America; Gunnar Knapp, Cathy Roheim, and James Anderson, The Great Salmon Run, TRAFFIC North America; Alaska Blue Book, 1989-90 and 1991-92, Alaska Department of Education; Eisenhower Library and Museum; International Monetary Fund, Primary Commodity Index; Association of ANCSA Regional Corporation Presidents/CEOs; Alaska Department of Revenue, Tax Division; Alaska Department of Fish and Game; Alaska Permanent Fund Corporation; Alaska Division of Geological and Geophysical Survey; National Marine Fisheries Service; The Threat of Pandemic In�uenza (Workshop Summary), Institute of Medicine, National Academies Press; “Resurrecting 1918 Flu Virus Took Many Turns,” Washington Post, October 10, 2005.

U.S. buys Alaska from Russiafor $7.2 million, or about $106 million in today’s dollars. One U.S. senatordescribes Alaska as “the most worthlessterritorial acquisition with which any government was ever a�icted.” Resources produced in that “worthless acquisition” since then have been worth in the range of $670 billion—morethan 6,000 times what the U.S. paid.

Congress makes Alaska a civil and judicial district. Sitka designated capital

1912-1913Congress approves territorial government for Alaska.

First legislature meets; grants women right to vote 1960s1969 - State collects $900 million from oil lease sales on state-owned land on North Slope1968 - U.S. government pays Tlingit and Haida people $7.5 million in compensation for land claims �led in the 1930s1968 - Discovery of Prudhoe Bay oil �eld, largest in North America, on state-owned land1967 - Major �ood in Fairbanks1965 - U.S. government begins underground testing of atomic bomb on Amchitka Island in the Aleutians; testing ends in 19711964 - Largest earthquake in U.S. history hits Southcentral Alaska

1989 - Oil spill in Prince William Sound, largest ever on U.S. shores; world’s largest zinc mine, Red Dog, starts production1986 - Alaska recession begins, following crash in oil prices1986 - Federal homesteading program in Alaska ends1985 - Commercial fur sealing on Pribilof Islands ends1982 - State pays �rst Permanent Fund dividends1980 • High oil prices, big state oil revenues start economic boom • State abolishes personal income tax • Congress passes Alaska National Interest Lands Conservation Act (ANILCA), adding 104 million acres to national conservation units and giving subsistence users priority on federal lands, with subsistence users de�ned as rural residents. But the state constitution prohibits allocating �sh and game on the basis of residence, setting up an ongoing dispute between the federal and state governments over who quali�es as a subsistence user.

1990s• Increased federal spending boosts Alaska economy• Oil prices remain low throughout most of decade• Salmon prices decline throughout 1990s• Federal government begins major management changes in o�shore �sheries, including limiting access and assigning shares of catch

1977 - Oil begins �owing through trans-Alaska pipeline, but end of construction brings economic slowdown1976 - Alaska voters establish Permanent Fund to save part of oil revenues; U.S. extends �shery jurisdiction to 200 miles o�shore 1974 -Start of construction of 800-mile trans-Alaska oil pipeline, at that time the largest private project in U.S. history. Construction creates economic boom.1973 - Alaska begins limiting entry to salmon �sheries, in attempt to stop decline in salmon runs1971 - Alaska Native Claims Settlement Act (ANCSA) awards Alaska Natives $1 billion and 44 million acres

2000-20082008 • Oil prices climb to historic highs, then drop sharply; future price uncertain • State government agrees to provide up to $500 million to advance gas pipeline project2006 - Alaska elects �rst woman governor, Sarah Palin 2005 - Higher natural gas prices spark renewed interest in potential gas pipeline from Nor th Slope

2009 Alaska celebrates

50 years of statehood.

1918 In�uenza epidemic reportedly kills

a third of Alaska Native people and in some villages virtually the entirely population

• Alaska Highway linking Alaska and contiguous U.S. is built• Japanese troops bomb Dutch Harbor, invade Aleutians, occupy Attu and Kiska, and take Aleut residents of Attu to Japan as prisoners. U.S. moves other Aleuts to camps in southeast Alaska for remainder of war. • U.S. troops defeat Japanese on Aleutians in 1943, in only land battles fought in North America in World War II

Congress enacts civil code for Alaska;opens homesteading program to Alaskans; approves

non-voting Alaska delegate to Congress;moves capital to Juneau

Pribilof Islands declared �rstnational wildlife refuge, to be managed for commercial fur seal harvests. Acquiring Pribilof fur sealcolonies was a central reason U.S.bought Alaska.

1916Alaska delegate

to Congress introduces �rst

statehood bill

Rapid growth in commercial salmon industry. Alaska becomes world’s largest salmon producer, and salmon remain most valuable resource through the 1960s.But the industry is dominated by Seattle canneries and �sh traps are in widespread use. Until statehood, Alaskans regularly asked the federal government to ban �sh traps, arguing they depleted salmon runs and cost �shermen jobs.

1911U.S. and other nations sign treaty to stop high-seas �shing for fur seals, which was destroying Pribilof seal population

1924• Congress passes Indian Citizenship Act, recognizing Alaska Natives and other Native Americans as U.S. citizens• Congress passes White Act to protect salmon from over�shing

1930s• Revival of gold mining• Tlingit and Haida people �le �rst Alaska Native land claims in U.S. Court of Claims• Hundreds of families arrive in the Matanuska Valley to establish a farming colony, as part of U.S. government’s New Deal program to create jobs during the Great Depression

1915- 1923 Alaska Railroad built. Construction headquarters site becomes city of Anchorage

30,000Estimated population at time of purchase

1959 - On January 3, President Eisenhower signs statehood act. At 375 million acres, Alaska becomes the largest state. It immediately does what Alaskans have wanted for half a century: bans �sh traps.

1955 -56 - Delegates to constitutional convention write proposed state constitution and Alaska voters ratify it. Supporters argue that as a state, Alaska could ban �sh traps and control salmon �sheries.

1957 - Oil discovered in Cook Inlet

1958 - Congress passes Alaska Statehood Act, awards new state rights to select 105 million acres

1915Territorial legislature

enacts law allowing AlaskaNatives to become citizens, but only

on the condition that they “adopted the habits of a civilized life.”

1945Territorial legislature passes Alaska Civil Rights Act, prohibitingdiscrimination by race; recognizes Elizabeth Peratrovich for herleadership in �ghting discrimination against Alaska Natives

1953 - Major timber harvesting and processing start in Southeast Alaska

1897- 1906Klondike and Nome

gold rushes temporarilymake �rst Skagway and then Nome largest cities

in Alaska

1911-1938 Major copper production from Kennecott mine

1940 - 1960Military build-up: World War II/Korean War/Cold War

1867

1870

1900-1906

1942

1970s

1884

1880 - 1920

1980s

An interactive version of this timeline is on ISER’s Web site. It shows in colorful detail how the people, the economy, and the government (territorial and then state) have changed over time. While navigating the timeline you’ll find historic photos, figures, maps, and text explaining major events, as well links to ISER publications and Web sites. Go to:

www.iser.uaa.alaska.edu

• Military and civilian activities of the federal government remain critical to the economy. The federal government was a big part of Alaska’s economy before oil development—and today it still supports a third of all jobs for Alaskans. • Alaska now has five times more jobs—and those jobs are much more likely to be in stores, hotels, and other places that sell things to both residents and tourists. Fifty years ago, Alaskans had to order many items by mail and fly Outside to get some services.• Alaska’s health-care industry has grown enormously. In 1961 only about 1 in 100 Alaska jobs were in health care. Today it’s nearly 1 in 10.• Alaska’s population has tripled since 1960. But with 680,000 residents, Alaska still has only about as many people as Memphis, Tennessee. • Many more Alaskans are now Asian, Pacific Islander, or Black.• The federal government is still the biggest land owner, but its share is down from 99% to 60%. Most federal land in Alaska today is in parks, wildlife

refuges, and other conservation units.• Alaska’s state government now owns 28% of the land. The 1958 Alaska Statehood Act granted the new state 105 million acres.• Alaska Native corporations own about 12% of the land (44 million acres), under terms of the 1971 Alaska Native Claims Set-

tlement Act (ANCSA). That’s most of the privately owned land in Alaska.• Individuals, local govern-ments, and the University of Alaska together own around 1% of Alaska lands.(Continued on page 4)

UA Research Summary No.15 • September 2009Institute of Social and Economic Research • University of Alaska Anchorage

Alaska’s People and Economy, 1867-2009

Utterly worthless. That’s how a congressman from Missouri described Alaska in 1867, when the U.S. bought it from Russia. A lot of Americans agreed. For almost 100 years, hardly anyone—except some Alaskans—wanted Alaska to become a state.

But Alaska did finally become a state, in 1959. Today, after 142 years as a U.S. possession and 50 years as a state, Alaska has produced resources worth (in today’s dollars) around $670 billion. The U.S. paid $7.2 million for Alaska, equal to about $106 million now. For perspective, that’s roughly what the state government collected in royalties from oil produced on state-owned land in just the month of March 2009.

To help mark 50 years of statehood, this publication first takes a broad look at what’s changed in Alaska since 1959. That’s on this page and the back page. We’ve also put together a timeline of political and economic events in Alaska from 1867 to the pres-ent. That’s on the inside pages. There’s an interactive version of the timeline—with photos, figures, and more—on ISER’s Web site: www.iser.uaa.alaska.edu.)

AlAskA 1959-2009: WhAt’s ChAnged?• Oil now pays the bills. At first, the new state government had a small income, mostly from a personal income tax and various smaller taxes. Then, in 1968, oil companies discovered a huge oil field, on lands the state owned on the North Slope. Income from oil production made the state wealthy and has paid almost all its general expenses for 40 years. Alaskans now pay no state income or sales taxes.• Alaska has built a very big sav-ings account. In 1976 Alaskans voted to put part of the state’s oil revenues into a special account the legislature couldn’t spend. With that decision, Alaskans used temporary oil revenues to create a permanent asset. The Permanent Fund had a balance of about $30.5 billion in May 2009.• The petroleum sector now directly and indirectly supports a third of all jobs for Alaskans. And an upcoming ISER analysis will show that the petroleum sector—which was very small in 1959—has been responsible for most of Alaska’s economic growth in the past several decades.

20081960 ,226,000 Alaskans,,

679,700 Alaskans

If superimposed on Lower 48, Alaska would cover 20% of land and stretch from coast to coast. Road system covers only

a small area of the state. Hundreds of communities areaccessible only by water or air.

Canada

Lower 48

AKLocation:1,500 miles by air from Anchorage to Seattle; 2,000 miles by road from Alaska border to Lower 48border

959085807570651961

57,000

2000 2007

317,000Alaska Wage and Salary Jobs

Source: Alaska Department of Labor, Research and Analysis

State General Revenues, In Billions of 2007 Dollars

$1

$7

OtherRevenues

Petroleum Revenues

1959 018369 74 77 80 9286 89 95 98 04 2008

$4

Sources: Scott Goldsmith, ISER data base; Alaska Department of Administration, Division of Finance

Alaska Native Corporations 12%

Individual Private/Municipal/University/

1%

State 28%

Land Before Statehood

Land Today

Federal99.5%

Federal59%

Non-Federal 0.5%

• The state government now makes annual cash payments to all residents. The state legislature can’t spend the principal of the Permanent Fund, but it can spend the earnings—money from the fund’s investments. Since the 1980s, the state has used part of the fund earnings for a program that’s unique among the states: annual cash payments to all Alaska residents. Those pay-ments (Permanent Fund “dividends”) fluctuate a lot, depending on how much the fund earns in a given period. Someone who had received the dividend every year from 1982 to 2008 would have collected $29,600—or about $38,000 in today’s dollars.• Alaska Native corporations that didn’t exist in 1959 now make up 1 in 6 of the state’s largest 100 private employers. The 1971 Alaska Native Claims Settlement Act awarded Alaska Native peoples land and money, but also established for-profit regional and village corporations to man-age those assets. Over the years a number of non-profit Alaska Native corporations have also been formed, to administer federal and state health and social service programs. Those for-profit and non-profit cor-porations employ thousands of Alaskans.• A bigger population and economy and improvements in technology have reduced (but not eliminated) the conditions that increase the costs of doing business and make development difficult in Alaska. Those con-ditions include Alaska’s huge size, its distance from markets and suppli-ers, and its harsh climate. • Costs of living are still very high and jobs are scarce in the state’s remote communities. Alaska’s jobs and people are concentrated in a handful of urban areas. But about 10% of Alaskans live in hundreds of small remote communities scattered around the state, far from roads and accessible only by water or air. The costs of living and doing business in those places can be double or triple the costs in larger Alaska places.

WhAt Might Be AheAd?• Alaska faces big challenges in the coming years—but fortunately, it now has many assets it didn’t have 50 years ago. Oil production, which supports so much of the state’s government and economy, is half of what it once was and is still dropping. There is still a lot of oil in Alaska, but it will be harder to get, and much of it isn’t on state-owned land—so the state’s revenue share will be smaller. Also, the federal govern-ment, another mainstay of Alaska’s economy, is dealing with serious budget problems that could affect its activities in Alaska.To help deal with those problems, Alaska today has a bigger and more diverse economy, more people, and improved infrastructure. And be-cause Alaskans decided more than 30 years ago to save some of the state’s oil revenues, the state government also has the Permanent Fund, which is capable of earning tens of billions of dollars over time.

(Tourism, seafood, mining, timber, air cargo, income of retirees, personal assets)

What Generates Jobs for Alaskans?

Source: Scott Goldsmith, ISER

Federal government

Petroleumsector

Other resources

35%

34%

31%

1982 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

$1,000a$404

$952.63 $990.30

$1963.86$1850.28

a1982 dividend was a special legislative appropriation from the General Fund, not PF earnings. bDoes not include special 2008 energy assistance payment of $1,200. Source: Alaska Permanent Fund Corporation

Permanent Fund Dividends Per Person, 1982-2008(Not Adjusted for In�ation)

$2,069b

2008

CCalista

Doyon

NANA

Bering Straits

CookInlet

Ahtna

Chugach Alaska

Aleut Koniag

SealaskaBristol Bay

Arctic Slope

Alaska Native Regional Corporations

Where Do Alaskans Live?

79%

12%9%

Urban areas (Anchorage, Fairbanks, Mat-Su, Kenai Peninsula, Juneau)

Remote rural communitiesin Western, Northern, and Interior Alaska

Rural communities in Southeast and Southcentral Alaska

Source: Alaska Department of Labor and Workforce Development, Research and Analysis

About ISER: ISER is part of the University of Alaska Anchorage. It was established in 1961, soon after Alaska became a state, and it is the oldest public policy research institute in Alaska. To learn more about ISER and its nearly 50 years of research, go to:

www.iser.uaa.alaska.edu

White

AlaskaNative

Asian/Pac. Isl.

Black 4%

72%

18%

6%

3%

1%

19%

77%

19602007

Source: Alaska Department of Labor, Research and Analysis

Alaska’s People

Editor: Linda Leask • Graphics: Clemencia Merrill

Prepared by ISER Faculty and Staff