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Area jobless rate high compared to others

Season fluctuations high, Carey points to oil and support industry decline

Posted: October 27, 2011 - 8:20pm  |  Updated: October 27, 2011 - 8:29pm
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Ryan Olson uses a computer Thursday afternoon at the Alaska Job Center to refine his resume after attending a resume building workshop in a conference room at the center.  M. Scott Moon
M. Scott Moon
Ryan Olson uses a computer Thursday afternoon at the Alaska Job Center to refine his resume after attending a resume building workshop in a conference room at the center.

Robert O’Day got laid off about a month ago from his job repairing furniture.

“It got slow, numbers were down, so they did what they had to do,” he said.

Now, he is hoping a job prospect at a processor in Anchorage will come through so he can avoid the Peninsula’s winter job market, which isn’t usually kind on the unemployed.

“Yeah, I’m living in a tent right now,” said the 47-year-old with a laugh as he finished working at a computer at the Peninsula Job Center on Thursday. “I enjoy it though … just as long as you have got a good sleeping bag.”

O’Day said he thought there were a lot of people on the Peninsula starting to look for work. He based that thought on the traffic he has seen filter through the job center.

“There’s work out there, but it’s spotty,” he said, adding there were more prospects in Anchorage.

According to statistics released by the Alaska Department of Labor and Workforce Development, the unemployment rate in the Kenai Peninsula Borough was 8.1 percent in September — the highest among major communities connected to the road system.

As a state, Alaska’s seasonally adjusted unemployment was 7.6 percent in September; 5.8 percent in Anchorage, 7.6 percent in the Matanuska-Susitna Borough and 5.8 percent in Fairbanks. The national unemployment rate is 9.1 percent.

The Peninsula’s rate is up from 7.6 percent in August, but down from 8.6 percent in September of 2010.

However, the Peninsula’s annual unemployment rate has steadily increased from 7.6 percent in 2007 to 10 percent last year.

The area’s unemployment usually swings with the seasons, state economist Neal Fried said. Last year, the rate fluctuated between 13 percent in February and 7.8 percent in July, the highest and lowest points respectively.

“On the Peninsula you have a couple of things that really add to the seasonality in really a dramatic way,” Fried said. “They are the most seasonal industries in the state — one is fishing and the other one is tourism, or the visitor industry.”

The Peninsula is made up of a number of economic drivers — oil, tourism, service, and fishing — and the various cities separated by geographical and political boundaries, Fried added, don’t have much influence on each other’s economy.

“You have a pretty diverse economy, but there hasn’t been much growth,” he said.

Alaska ranks as one of the nation’s most employed states. It is the 19th least unemployed state at 7.6 percent next to Montana (7.7 percent) and Wisconsin (7.8 percent).

Fried said Alaska has done much better than the rest of the nation, and for the first time in the state’s history has a lower unemployment than the national average, which happened in 2009, he said.

That’s not to say the state’s rate went down, rather it went up, Fried said, showing the “nation’s rate went up that much more.”

“It really is an expression of how bad it is outside, not how good it is in Alaska,” he said. 

Fried added that he thought the Peninsula would have a lower annual unemployment than 2010’s 10 percent based on the numbers through September.

O’Day said he though there were a lot of older residents having a hard time finding work in the area. He added that Alaska’s relatively attractive employment situation was luring residents north.

“There are a lot of people moving into Alaska, a lot of them are coming from California and the southern states and they are bringing their unemployment claims with them,” he said.

In one year, the state’s labor force increased by about 6,000, from 363,124 in September of 2010 to 369,168 this year. On the Peninsula, however, the labor force remained relatively static at 27,577 residents last year and 27,503 this September, according to statistics.

“Fewer Alaskans are leaving, a few more people are coming here as a result of a better job market in Alaska than the national average and that effectively pushes up our unemployment rate,” Fried said.

Murphy Daugherty, an out-of-work welder looking for jobs at the job center, said the opposite was true for him.

He said there is a lot of competition for jobs in his field. When asked what kind of work he would take, he had a quick answer.

“Anything,” said the 57-year-old. “I’d prefer to go into the oil field or the pipeline work.”

He said he thought job offers had slowed with so many residents coming from the Lower 48 and was eyeing work in the gas fields of North Dakota, which has the nation’s lowest unemployment rate at 3.5 percent.

“I know people down there and I can go to work and I might if I don’t find something here,” he said.

Carl Martinez, 54, said he hasn’t seen what he called “real jobs” in drafting and design on the Peninsula for some time.

Martinez added that he has been working part-time for four years.

“I can work part time because I have downsized myself knowing this was happening 10 or 15 years ago,” he said. “My existence is toward that third-world existence. That is why I am still working, but actually there is no more part-time work on the Peninsula.”

Kenai Peninsula Borough Mayor David Carey said he thought decreases in the area’s oil and petrochemical industry over the last several years had ripple effects.

“When you lose those top jobs, you then also lose a number of the secondary and the tertiary jobs — those people who supply things for those people,” he said.

Carey added the next borough mayor should be concerned about unemployment, but the amount of impact a mayor can have on those numbers is “relatively narrow.”

He added money allocated from the legislature over the last several years has been one of, if not the “largest plus” to the area’s economy.

“When you look at all the money that we got from the legislature, if you take that away, economically we would be in a much worse situation, our unemployment would be much higher,” he said.

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