A dire prognosis for Alaska’s economy has been forecasted by recent statistics concerning outmigration and the state’s labor force.
Analysis of numbers released by the U.S. Census Bureau in December reveal that more than 500 people have left Alaska since July of last year. This constitutes a significant increase in the outmigration rate since the same period in 2017, which saw a net loss of people of only 200.
Furthermore, the Alaska Department of Labor and Workforce Development (DOLWD) found that the state’s workforce has declined by around 10,000 people since the beginning of 2018. This is despite a slight uptick in the employment rate in November and December.
The combination of these two trends – increased outmigration and a shrinking labor force – portends a difficult economic situation for Alaska in the near future.
While some have pointed to the current low price of oil as a primary culprit in the state’s economic woes, experts caution that the situation may be more complex than that.
“The economic downturn in Alaska is more multi-faceted than it is just related to low oil prices,” said Jonathan King, an economist at the Institute of Social and Economic Research at the University of Alaska Anchorage. “There are other factors that are contributing to the reduction in the labor force and outmigration.”
King pointed to Alaska’s low unemployment rate, which at just 4.7 percent is the lowest in the country, as a potential contributing factor to the state’s labor force woes.
“When the unemployment rate is so low, it means there’s limited opportunity for people to move into the labor force,” he explained.
The DOLWD also noted that Alaska’s declining workforce is primarily composed of younger workers, including those in their 20s and 30s. This is a particularly concerning development, as this age group is seen as crucial for the state’s economic growth.
Given the current evidence, Alaska appears to be headed towards an economically difficult period. The state will need to take steps to mitigate the effects of outmigration and the shrinking labor force in order to ensure its economic stability.