Shrinking workforce a growing problem across Alaska
August 9, 2023
The math that more people are leaving Alaska than moving to the state, along with the aging of the adult population that remains, has put Alaska’s largest city and the state at risk of squandering economic opportunities, according to a three-year outlook released Aug. 2 by the nonprofit Anchorage Economic Development Corp.
“Anchorage and Alaska are witnessing a weird combination of big economic opportunities that are mostly a sure thing, combined with economic threats that could lead to decades of stagnation and decline,” Bill Popp, the organization’s president, said at an annual luncheon where the report was presented.
The report and Popp’s presentation painted a picture of plenty of jobs available but fewer people available to fill those jobs.
Anchorage, home to four out of every 10 Alaskans, has lost 18,600 working-age residents since 2013, Popp said, with that defined as being between 16 and 64 years old. Over the next three years, the report predicts, Anchorage will lose an additional 2,900 working-age adults, he said. The total loss of 21,500 represents a 10% decline, he said.
“We’ve lost one out of 10 workers that we used to have. Let that sink in for a moment,” he told the audience.
Statewide trends have been similar. The Alaska labor force peaked in 2013 at 479,000 but by 2022 had declined by almost 26,000, or 5.4%, the sharpest drop of all U.S. states during that period except for West Virginia and Wyoming, according to the Alaska Department of Labor.
“The size of Alaska’s working-age population has been declining for nine years in a row,” the department reported this past spring.
As Alaskans age out of their working years, the state is falling short on replenishing the workforce. The number of new residents moving to the state has fallen behind the number leaving for 10 years in a row.
Wrangell is among the communities worst hit by the decline in working-age residents, recording more than a 20% drop in the 18- to 64-year-old workforce between 2013 and 2022, according to the Department of Labor.
Unless the trend is reversed, the department estimates Wrangell could lose an additional 300 residents over the next two decades, falling to 1,773 residents by 2045.
Notwithstanding the loss of working-age Alaskans, job opportunities are plentiful, Popp said.
The oil industry is planning billions of dollars in investments on the North Slope, largely driven by Santos’ Pikka project and ConocoPhillips’ Willow project, which together will produce thousands of construction jobs and hundreds of operating jobs, Popp said.
Billions of dollars are being steered to Alaska from the federal government for infrastructure projects. But demographic realities undercut those opportunities, he said.
“What kind of economic benefit will come to our communities if most of those oil and infrastructure projects are designed by workers living outside of Alaska and built by shift workers flying in and out of Alaska every two weeks?” he said. “If you think this is an unbelievable scenario, I have news for you: It’s already happening.”
In Anchorage, one out of every four jobs are held by people who do not live in the city, he said. Half of those commute from outside Anchorage but within Alaska, and half are non-Alaskans traveling here for shift work or seasonal work or who never come to Alaska at all because they are working remotely from elsewhere, he said.
The Alaska Beacon is an independent, donor-funded news organization. Alaskabeacon.com. The Wrangell Sentinel contributed reporting for this story.