Summer unemployment trend hits area

Jobless rate creeps higher as seasonal workforce begins search for employment

Posted: Friday, August 01, 2003

Unemployment numbers rose slightly in the month of June for the Kenai Peninsula in spite of an increase in employment and perennial growth of the labor force.

According to the latest figures from the Alaska Department of Labor and Workforce Development, the peninsula's labor force, those working and those looking for work, grew from June to May by 1,542. Actual employment -- the number of people actually employed -- was up by 1,312 workers. The unemployment rate crept upward, however, from 9.9 percent in May to 10.2 percent in June, as 230 more people applied for unemployment benefits in June.

State labor economist Neal Fried said this was possible because the number of people unemployed proportionally grows a little faster than employment.

"The new people looking for work grew more quickly than the number of jobs," he said. "June is the month to enter the labor force. You have a surge of people entering the labor force, particularly students."

The peninsula's unemployment rate growth was consistent with the statewide unemployment rate increase of 0.3 percent, with the state jumping to 7.4 percent after showing 7.1 percent in May. Alaska was ahead of the national average of 6.5 percent last month, however.

From May to June, the state followed its expected seasonal trend, adding in that time frame an estimated 10,700 wage and salary jobs -- jobs excluding self-employed work. More than half of these jobs were in retail and the leisure and entertainment (hotels and restaurants) fields. Construction, seafood processing and air transportation also added a significant number of jobs in June. Government employment was down an estimated 2,800 jobs as schools and universities began their summer break.

The unemployment rate is recorded by the U.S. Census Bureau and accounts for people out of work who are actively looking for jobs. Fried pointed out that June typically is the time when school employees begin to seek out summer jobs. Coupled with people who only take jobs during the summer, he said the unemployment numbers can climb.

"You have this big chunk of folks who are in the labor market for eight or nine months out of the year," he said. "Then they're not working. While they're looking and don't have jobs yet, they're unemployed.

"You also have people who weren't working and decide that because the job market is so good, June is a good month to jump back into the labor market."

Fried also counted an influx of Outside transients in the numbers that impact both unemployment increases and job growth. He said it suggests that the weak national economy may be affecting Alaska.

The national job market appears to be luring fewer Alaskans out of state and perhaps causing some job seekers to migrate to Alaska, since it is one of the few states with consistent job growth over the last few years.

"The job market in the rest of the country is pretty soft," Fried said. "People coming from outside Alaska for work generally do it in the spring. There's a lot of that in your neck of the woods."

The state's employment growth has continued through the first half of 2003. Total June wage and salary employment was up an estimated 3,400 jobs over June 2002 for a growth rate of 1.1 percent.

Fried predicted that July employment tallies will reflect a marked drop as the number of jobs will continue to dissipate into the fall.

"This four-month period -- May, June, July and August -- is the big period for jobs in Alaska," he said. "It should drop through September."

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