Alaska’s Employment Landscape: A Perspective from Dave’s Alaska Homes
I recently had the pleasure of attending a meeting with Neal Fried, our state of Alaska economist for many years. This annual gathering, organized by the Valley Board of Realtors, is always a fascinating exploration of the numbers shaping our economy here in the Valley and the state. As a realtor and a local, these numbers are my catnip – they give us a sense of the direction we’re heading in as a community and as a state.
One particular graph from this year’s presentation caught my eye (see below). It showed two lines – one blue, representing the number of unemployed, and the other red, indicating job openings. In 2019, these lines closely tracked each other, indicating a balance in the job market. In other words, for every job that became available, there was someone to fill it.
Then came 2020, the year of the pandemic. Unemployment jumped, and our lines diverged, but here in the valley, we managed to recover rather quickly. We didn’t shut down entirely, so we quickly regained some semblance of balance.
However, a startling trend has emerged since then. Unemployment has continued to decrease (right now the lowest rate ever in Alaska), but job openings have soared. A wide gap has formed between the two, indicating a surplus of jobs but a shortage of people to fill them. It’s a puzzling anomaly, and as Neil pointed out, solutions are not obvious.
As Travis and I were talking about this he pointed out how much turnover there seems to be in the job market and we know how costly that is. So the opportunity is a focus on employee retention. Work environment, leadership, opportunities for advancement and fair compensation are the keys to adding needed employees and retaining employees!
Here are the general possibilities or solutions to deal with employment gaps in Alaska based on historical trends and common strategies:
Economic Diversification: If employment gaps are due to over-reliance on one or two industries, such as oil and gas, a strategy could be to diversify the economy. This could include promoting other industries such as tourism, fishing, or renewable energy.
Skills Training and Education: To fill employment gaps, there could be an increased focus on education and skills training. This could involve providing incentives for Alaskans to pursue higher education, or providing vocational training in high-demand fields.
Incentives to Attract Workers: If the issue is a lack of workers rather than a lack of jobs, the state could provide incentives to attract workers from other states or countries. This could include tax breaks, housing assistance, or other benefits.
Remote Work Opportunities: Given the rise of remote work due to advancements in technology and the COVID-19 pandemic, more people could potentially fill jobs in Alaska without having to physically move there.
Infrastructure Development: Improved infrastructure can also help to create jobs and make the region more attractive to businesses and workers. This could involve investments in transportation, internet connectivity, or housing.
This situation is a fundamental issue for our economy, and there’s no straightforward solution. We’re navigating uncharted waters here, and it’s intriguing to speculate where we might end up. For now, we’ll keep an eye on the numbers, and as always, I’ll keep you updated with my thoughts.
Stay tuned, and let’s see where this journey takes us. Alaska’s economic landscape may be shifting, but I have no doubt that our resilience and spirit will see us through any challenges we face.
As always, we would love to hear your thoughts and questions about these market trends.
If you or someone you know is thinking about buying or selling a home, or if you’re just curious about the value of your property in today’s market, please feel free to reply to this email or give us a call.
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