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Job trends giving mixed signals

Posted: Friday, March 31, 2000

While the economy in other states is in the midst of a roaring boom, the Kenai Peninsula's job market seems to be slowing down.

The unemployment rate in the borough has been declining. However, it remains above state and national averages, and a closer look at the numbers reveals the decline stems from fewer people in the work force rather than more jobs.

But trying to gauge the health of the peninsula's economy is difficult.

"I don't think it is black and white," said Neil Fried, Alaska's labor economist.

The state numbers show employment levels on the peninsula leveling off in the late 1990s and going into a slight decline in 1999. At the same time, the overall population is increasing. None of the changes are more than a few percentage points.

Fried said the indicators are contradictory and puzzling.

The most reliable ones come directly from businesses and workers -- the quarterly reports employers file and the unemployment claims job seekers file.

"It is pretty straightforward," he said. "There is not statistical voodoo going on."

Some of the other statistics are rougher estimates, he cautioned.

The revised estimate of the borough's January unemployment rate is 14 percent, based on a count of 2,833 unemployed. One year earlier, the jobless tally was 2,921 or 14.3 percent.

Fried said those numbers are trustworthy.

But the less-reliable estimates of the number of people in the total work force and employed in January suggest a decline for the past two years in a row.

After employers' reports from the fourth quarter of 1999 are analyzed, the state will have better information on trends.

But preliminary numbers are available now.

"The total employment for 1999 for the first three quarters of the year was down a little bit," Fried said.

Most sectors of the peninsula job market showed little change between 1998 and 1999, he said. The most significant decline involved canneries.

"If you look at July, it was down quite a bit," Fried said.

"Most of the loss in that job count was in seafood processing. That industry can fluctuate quite a bit."

State statistics show July is the peninsula's month of peak employment, but the number of July jobs has declined yearly since 1996. Last summer, however, canneries were scrambling for help and would have hired more workers if they had been able to find them.

The outlook for other large employment sectors is equally unclear.

The Kenai Peninsula Borough School District, the borough's largest single employer, is planning to lay off about 1 percent of its work force this year.

The oil sector is buoyed by rising prices and weighed down by uncertainties connected with a spate of disputed international mergers. Those effects have trickled down to the Kenai Peninsula.

The Alaska Nitrogen Products fertilizer plant in Nikiski, formerly known as Unocal, is maintaining status quo staffing levels. The affiliated Unocal oil and gas exploration projects at Swanson River and in Cook Inlet are adding several positions. And the oil field service companies have cut back in the wake of industry retrenchment, according to company representatives.

"Actually, we went down in 1999," said Carrie Barth, human resources manager for Peak Oilfield Services, which the state listed as the third largest employer in the central peninsula -- after the school district and Unocal.

The 1998 industry figures on the Kenai were unusually high because of the large "turn around" project at the Nikiski fertilizer plant.

And now everyone in the industrial sector is waiting for the fallout from the mergers before planning significant employment changes, she said.

The work force changes are subtle and may reflect demographic changes and the strong economy elsewhere as much as the economic health of the peninsula.

Val Ischi, employment services manager at the Kenai Job Center, said the types of job listings and job seekers they are seeing remain typical for this time of year.

It is difficult for her office to judge trends, she said, because new online information sources are changing their contacts more than shifts in the area economy.

Other changes are easier to detect.

The distribution of age groups on the peninsula has changed dramatically over the past decade.

The number of people over 40 and of teen-agers has risen, while young adults and small children have declined. There are actually fewer peninsula residents aged 25 to 40 or younger than 10 than there were in 1990, according to state figures. Nearly all the growth in population has occurred because older people are staying and living longer.

This demographic change has had a dramatic effect on the school district, which has seen enrollment decline since 1997.

"You can have a growing population and a declining school population," Fried said.

Fried suggested that young people are not leaving the peninsula at higher than normal rates, but that the number of people coming to Alaska has declined because of the strong job market elsewhere and the erosion of the wage differences between Alaska and other states.

Only a few places in the state, notably the Matanuska Susitna Valley, are seeing a net immigration of people. Other places, including the Kenai, are experiencing a relative out-migration, he said.

Now Alaskans and peninsula residents are only seeing the outflow half of the traditional high turnover.

"We have become less attractive," he said.



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