State drops most jobs since 1980s recession

New statistics reveal the state of Alaska’s job market is in the worst shape since the recession of the late 1980s.

In a report released Friday, the analysis branch of the Alaska Department of Labor and Workforce Development determined the state had 5,530 fewer jobs on average during the first six months of 2016 when compared with the same six months in 2015.

The statistics run from January 2016 through June 2016. They show the difference between the two years widened as the year progressed.

In other words, the job losses accelerated.

Worse for Alaska’s economy, the lost jobs were high-paying ones. Employment fell 1.6 percent, but wages fell 4.5 percent.

“No argument: This is the worst state Alaska’s economy has been in since that ’80s recession,” said state economist Caroline Schultz, who helped compile the data.

Schultz has specialized in analysis of the 1980s recession.

“The only other time we’ve had job losses statewide was in 2009,” she said, and that one-year dip was less than 1 percent.

Through the first six months of this year, the decline is almost double that pace.

Given the decline in oil prices, “we all knew it was coming,” Schultz said.

Friday’s report is especially threatening because it shows that the decay in oil and gas employment spreading into other sectors of the economy.

Retail employment was down, and so was transportation and warehousing. Construction employment was down an average of 8.3 percent, and even hotels, restaurants and bars showed job losses overall.

In the 1980s, a collapse in oil prices caused state government revenues to plummet. In response, the Alaska Legislature slashed state spending and fired thousands of state employees. The double-barreled job losses in the private and public sectors of the economy led to a surge in foreclosures and bank failures across Alaska.

This time around, Alaska’s state government has been able to stagger its job cuts through the use of savings to make ends meet.

Those savings are almost exhausted, and the Alaska Legislature this year will be tasked with either cutting jobs, raising taxes or some combination of both approaches to balance the state budget.

In Juneau, state government employs 23 percent of the city’s workers. The figures released Friday show the City and Borough of Juneau lost about 2 percent of its jobs when comparing the first half of 2015 and the first half of 2016.

Juneau’s private-sector employment declined 0.8 percent (81 jobs), while there was a decline of 7.3 percent in state employment. This was partially countered by a 0.6 percent (4 jobs) increase in federal employment and a 1.1 percent increase (23 jobs) in local government employment. The Juneau School District provides most local government jobs.

Figures for the third quarter of 2016 will be available in January, and figures for the last quarter of 2016 will be available in spring.

The data released Friday comes from the state’s quarterly census of employment and wages, considered the best available figures. The federal Bureau of Labor Statistics publishes a monthly jobs report, but it has consistently estimated flat or even rising employment in Alaska, something the state figures belie.

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