Wages rose and job opportunities increased across much of Southeast through 2022, but problems such as the lack of affordable housing and child care remain persistent throughout the region, an economic consultant told the annual gathering of the Southeast Conference.
Meilani Schijvens gave Southeast’s economy an overall grade of A, the highest rating she has ever assigned for the region in her annual report, now in its 10th year.
“Why did our economy earn an A? … Number One — our jobs were up by 5%,” she answered. “That’s an increase of 2,200 jobs here in Southeast Alaska. Jobs were up all across the region.”
But there were exceptions. The job count dropped in 2022 from 2021 in Wrangell (5%), Petersburg (12%), Kake (3%) and Angoon (5%). Job gains were strongest in Ketchikan, Haines, Hoonah, Skagway and Gustavus as the tourism industry resumed operations after the pandemic shutdown.
Some of the job loss in Wrangell in 2022 likely was due to completion of the $30 million Wrangell Medical Center construction project in 2021.
Schijvens, who runs the Juneau economic analysis business Rain Coast Data, based her report on information compiled from the Alaska Department of Labor and the Southeast Conference’s annual spring survey of business owners. The group met last week in Sitka.
Across Southeast, Schijvens said, 44,450 people were employed in 2022. Wages rose by an average of 11% over the prior year.
Total wages paid in Wrangell in 2022 was 7% higher than 2021, even with the lower job count.
Schijvens also highlighted federal spending in the region, especially from the 2021 Bipartisan Infrastructure Deal and the subsequent Inflation Reduction Act passed by Congress.
“When we just look at some sort of key federal investments, the infrastructure bill has invested $220 million in Southeast Alaska so far and counting, Build Back Better (U.S. Economic Development Administration), our RAISE grants (U.S. Department of Transportation), the Southeast Alaska Sustainability Strategy (U.S. Forest Service), our very intensive COVID relief dollars, the Inflation Reduction Act, Housing and Urban Development, just that roundup alone adds up to a billion dollars,” she said. “And this is money that is really making a huge impact.”
The regional economy was “in real dire straits about two years ago,” but for now it’s looking brighter, she added. The return of tourism is a big part of that, she said.
There were exceptions, however.
Based on results from the April 2023 survey of Southeast business owners and managers, “The seafood and transportation (non-tourism) sectors were most likely to call the 2023 economy poor or very poor,” Schijvens’ report said. “Along with business leaders in Wrangell.”
While she mostly focused on data from 2022 as compared to 2021, she took a longer view in terms of Southeast’s aging population. The state needs to attract younger people, but to do this it must address two key concerns — housing and child care.
“If you look at the total population in Southeast Alaska in 2000, and look at the total population in 2022, we have almost identical population numbers. However, we have 6,500 fewer residents at a prime working age, the 19- to 59-year-olds,” she said. “We want to be able to attract and retain those younger workers; we’re going to need them in the Southeast Alaska economy. And that needs two things: It needs housing and it needs child care.”
Those who stay are often either from here or moved here for the expansive recreational opportunities, she said.
“On the flip side, why do people not stay at their jobs in Southeast Alaska? Or why are people maybe not able to take the job in the first place? Number one reason, according to our business leaders, housing — lack of housing, cost of housing. The No. 2 reason, child care, lack of child care, cost of child care; and our No. 3 reason, transportation.”
Breaking Southeast’s economy into various sectors, Schijvens showed that the visitor industry is the largest single employer in the region, with 15% of the workforce, followed by local government (14%), state government (10%), seafood industry (8%) and private health care employers (7%).
“We’re not super dependent on any one key aspect of our economy. When people talk about having a diverse economy, this is what they’re talking about,” she concluded.
Since 2019, she said, wages have grown by 12%, with particular growth in retail, construction, seafood, health care and mining, but this has not kept up with inflation.
This past spring’s survey of 370 business people across the region indicated that about three-quarters of them have a rosy view of the future, with the highest degree of optimism registered in Skagway, Juneau, Gustavus and Sitka — towns that cater to large cruise ships.
“There’s also the communities on the other end that are struggling a bit more, led by Wrangell and Prince of Wales,” she said. “The communities with less optimism include communities that don’t currently have large cruise ports and are much more reliant on the seafood sector.”
While 68% of those questioned in Skagway saw a positive future for their town, 29% of those surveyed in Wrangell had a negative outlook on its future. This pessimism was shared by residents who were polled in Petersburg and on Prince of Wales Island.
The Wrangell Sentinel contributed reporting to this story.
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