Fishing industry job market improves

Posted: Thursday, February 16, 2006

After several years of decline, Alaska’s long-suffering commercial fisheries registered a modest recovery over the past two seasons, with a proportional jump in the number of fishing-industry jobs, a state study says.

That assessment appears in an article in the February issue of Alaska Economic Trends, published monthly by the Alaska Department of Labor and Workforce Development.

Whether that trend is to continue, however, is uncertain, given the Alaska Department of Fish and Game’s latest sockeye salmon return forecast issued in December, which predicted significantly fewer salmon would return to Upper Cook Inlet than appeared last year.

Locally, fishery harvest employment in the Gulf Coast region of the state, which includes Cook Inlet, saw a steep decline from 2000 to 2002, when almost 1,500 jobs disappeared in the salmon and groundfish sectors, followed by a “moderate recovery” from 2002 to 2004, bringing back 265 of those lost jobs — “a welcome change,” said Trends’ authors Michael Patton and Dan Robinson, economists with the Alaska Department of Labor.

Salmon provided more than half of all Gulf Coast harvesting employment in 2004, with groundfish being the next most important job-producing category. Statewide, almost 4 billion pounds of fish were harvested in 2004, generating almost $1 billion in gross earnings and more than 6,700 direct jobs — the core of the economy for much of coastal Alaska, the analysis said.

Despite these “distinct signs of improvement,” Patton and Robinson qualified their assessment saying, “Few would deny that there is a lot of ground to recover or that significant economic challenges remain.”

According to state employment data, the 6,742 harvesting jobs of 2004 accounted for 2.9 percent of all private-sector jobs. When seafood-processing jobs were included, that figure jumped to 6.6 percent.

By comparison, in 2004 the oil and gas industry provided 3.6 percent of private-sector employment, the construction industry 7.7 percent, state figures show.

In the Gulf Coast region, the importance of fisheries-related employment was significant. Fish harvesting and processing jobs made up 18 percent of the private-sector jobs in the region, the state’s figures showed.

Meanwhile, fisheries jobs accounted for 14 percent of all private-sector jobs in Southeast Alaska region, and more than half of those in the Southwest region.

Together, the Southeast, Gulf Coast and Southwest regions accounted for nearly all of Alaska’s fish harvesting employment, according to the department.

Alaska’s fisheries, especially salmon, have faced significant challenges over roughly the past 20 years, the authors said.

“Biologically, Alaska’s fisheries are healthy; economically, they have struggled since the late 1980s,” Patton and Robinson said. “Salmon fishermen in particular have faced lower prices as a result of competition from farmed salmon and the consequent increase in world supply.”

According to state data, the world salmon supply in 1980 was around 550,000 tons, 98 percent of which was wild salmon. In 2001, the supply had grown by a factor of four to about 2.2 million tons. Sixty-two percent of that came from fish farms.

The prices of sockeye, pink and chum salmon, which account for more than 93 percent of all salmon harvested by volume, have remained relatively flat and are near historic lows, but price increases for king and coho salmon were enough to affect total earnings upward.

According to the department, earnings fell from $412 million in 2000 to $144 million in 2002, a 65-percent decline, but recovered in the next two years to $254 million by 2004. That increase helped generate the jump in employment in 2003 and 2004.

Employment also jumped 8 percent in the groundfish sector in those years, which may have been due to a significantly higher volume of sablefish caught in 2003.

While the latest employment figures demonstrated a general trend toward recovery within the harvest and processing industry through 2004 and 2005, the latest salmon return forecasts would appear to suggest a coming slowdown, or possibly a reversal of that trend.

According to the Division of Commercial Fisheries, 2005 proved a good season because as 5.1 million sockeye salmon were harvested in the Upper Cook Inlet area, a million more than preseason catch figures has predicted. That was due to a stronger than expected return of 5-year-old sockeye to the Kenai and Kasilof rivers, the division said.

The overall total return was more than 7 million fish, far in excess of the predicted 4.8 million.

The coming season does not appear as promising, and employment is not likely to grow, said Mike Johnson, co-owner of Alaska Wild Distributors and a Cook Inlet drift fisherman.

“The forecast for fish is down,” he said, pointing to Fish and Game studies. “It looks like slender returns for the next three years.”

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