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Earnings, Employment, and Innovation

Regional Employment & Earnings 

Employment

The labor force in Southwest Alaska is largely structured to respond to the direct demands of the commercial seafood industry, as well as support functions ancillary to that industry. Unfortunately, employment and industry data is somewhat limited due to high self-employment numbers, limited reporting, proprietary information of large sole-owner processing facilities and other factors.

The total labor force saw a small decline in the 1990s and slowly increased until 2014 when it began another slow decline (see Figure 3.1). In 2018 there were 15,353 residents in the labor force, down slightly from 15,621 in 2012. A recent change in the way labor force statistics are calculated by the Alaska Department of Labor & Workforce Development rendered labor data prior to 2010 incomparable to data from 2010 and onward. Figure 3.3 reflects unemployment rates to 2018. Unemployment has continued a slow steady decline from the great recession, but is most closely tied to the health of the resource base, primarily fisheries, though that is also reliant on a robust export market, tying it to the health of the domestic and global economy. The region shares similarities with the US, but is driven by differing factors.

Southwest Alaska reports high self-employment numbers. The U.S. Census Non-employer Statistics is based on the number of business income tax returns submitted by firms without any employees. Table 2.2 shows that the number of non-employer firms stayed fairly steady at around 3,500 firms. The total receipts have been steadily increasing over the past five years. Over half of these firms are businesses related to the fishing industry. These numbers are based on the submitter’s address, so if an individual fishes in the Southwest Alaska region, but lives and completes taxes outside the region, the numbers will not be captured here.

In general, Southwest Alaska hosts many nonresident workers. Workers come from other parts of the state and from the contiguous United States for seasonal work in fishing, tourism, construction and more. Unfortunately, most of the labor force and employment figures in this section do not capture these migratory workers. Figure 3.4 shows the percentage of nonresident workers in various regions around the state. Southwest Alaska has some of the highest nonresident worker figures in Alaska, with Bristol Bay Borough (80.9%), Aleutians East Borough (72.8%), and Lake and Peninsula Borough (48.6%) seeing the highest percentages of nonresident. The employment of non-American labor is subject to Federal labor laws and quotas that can vary from year to year. This adds a level of unpredictability to labor availability. 

Figure 3.4: Nonresident Workers by Place of Work 2017, Source: Alaska Department of Labor and Workforce Development, Nonresidents Working in Alaska

Regional Earnings

Per capita income for the region varies by borough and census Area (see Figure 3.5). Over the twenty-year period between 1997 and 2017, the region saw an average increase in per capita income of 18.9%. All regions experienced steady and faster growth than Alaska, with Bristol Bay Borough and Lake and Peninsula Borough experiencing growth rates of 278.4% and 238.8% respectively over the two decades preceding 2017. In this time both regions experienced record-breaking salmon runs in Bristol Bay and strong catches and improving prices for cod and groundfish.

Figure 3.6 shows employment trends over time for some of the largest sectors. Fishing and government are the two largest employers in the region. Combined government (tribal, local, state and federal) employed 8,400 residents while seafood processing employed 5,000 residents in 2015. In 2018, the government employed 8,300 residents while seafood processing employed 5,000 residents. These figures do not include self-employed residents, many of whom fish. Self-employment information can be found later in this chapter under “Industry and Occupation Trends.”

Taxes

At a statewide level, the tax climate in Alaska is relatively favorable compared to other U.S. states. The Tax Foundation compiles an annual State Business Tax Climate Index. Alaska ranks second out of all the states (a rank of 1 is most favorable for business). The only state with a higher ranking in 2019 is Wyoming. See Table 3.7 for a breakdown of Alaska’s tax ranking.

A particularly relevant fact to the Southwest Alaska region is the fisheries business tax. The fisheries business tax is assessed on fisheries businesses and persons who process or export fisheries resources from Alaska. The Department of Revenue Tax Division collects fisheries business taxes primarily from licensed processors and persons who export unprocessed fish from Alaska. The State also levies the fishery resource landing tax on processed fishery resources. The Southwest region includes additional taxes that vary at the municipal level. These taxes are levied in a variety of ways including through property taxes, sales taxes, bed taxes, fuel taxes, liquor taxes and natural resources taxes.

SWAMC Region Capital Improvement Project (CIP) Lists

Innovation

The U.S. Economic Development Administration (EDA) publishes an Innovation Index for comparing regions to the U.S. in order to assess innovative capacity. The innovation calculation uses measurable inputs and outputs from a region to evaluate what is driving innovation and where there is room for improvement. The scores are compared to the United States as a whole, which is given a baseline value of 100. Higher scores mean that a region is performing better than the country; scores lower than 100 mean that the region is not performing as well as the country as a whole. 

In 2014, the SWAMC region received a relatively low overall score of 74, less than Alaska’s score of 88.8. In 2016, the region moved up to a score of 85.9, an increase of over 10 points, while Alaska only grew to 90.7 points. This growth in the last year is mirrored in the subcategories, with the region nearly closing gaps with Alaska in certain sectors. Productivity and Employment, for example, features the region and Alaska with only a .1 point difference. Data for the SWAMC region still indicates that the region excels in the number of large establishments per 10,000 workers (1.52 establishments per 10,000 workers compared with 1.08 for the U.S.), job growth to population growth ratio (a ratio of 1.47 compared to .49 for the U.S. between 1997 to 2011), and slightly lower unemployment rates (7.5 percent compared to 8.9 percent for the U.S.). Figure 3.8 shows how the SWAMC region scored compared to the state and the U.S.

Innovation Index Indicators

The index is calculated using the following indicators:

Human Capital: (Educational Attainment, Technology-based Knowledge Applications, Population Growth Rates)

Economic Dynamics: (Average Venture Capital, Establishment Churn, Broadband Density + Penetration, Establishment Sizes)

Productivity and Employment: (Change in High-Tech Employment, Job Growth, Gross Domestic Product Per Worker, Average Patents per 1,000 Workers)

Economic Well-Being: (Average Poverty Rate, Average Unemployment Rates, Average Net Migration, Average Growth in Per Capita Personal Income, Compensation)

Source: Innovation Index (partnership between U.S. Commerce Department's Economic Development Administration, Purdue Center for Regional Development, Indiana Business Research Center, Indiana University's Kelley School of Business and others).