Government a top employer in Alaska

In borough, 17.3 percent of work force employed by municipalities, schools, hospitals

Posted: Monday, October 30, 2006

Better than one in every six working people on the Kenai Peninsula are employed in one way or another by local government entities, according to the Alaska Department of Labor and Workforce Development.

An article in the department’s October issue of Alaska Economic Trends shows 3,136 people out of a total peninsula employment of 18,075, or 17.3 percent, are working for municipal governments, the school district or hospitals.

Other data shows that the Kenai Peninsula Borough, some of its cities, its school district, and municipal hospitals hold seven spots on the state’s list of the 50 largest government employers. The Kenai Peninsula Borough School District, which employed 1,286 in 2005 with a payroll of almost $53,000, is fifth on that list, headed only by the Anchorage School District, the Municipality of Anchorage, and school districts of the North Star Borough and Matanuska-Susitna Borough.

Central Peninsula General Hospital’s 405 workers (2005 payroll, almost $19 million) were 16th on the list, followed immediately by the Kenai Peninsula Borough with 388 employees and a $15.6 million payroll.

South Peninsula Hospital’s 2005 payroll was $10.2 million going to its 256 workers. Much further down the top 50 at positions 45, 47 and 49, respectively, were the city of Kenai (144 workers, $5.16 million payroll), the city of Homer (110, $5.38 million), and the city of Seward (106, $4.07 million).

Statewide, municipal governments, schools, municipality-owned hospitals, tribal governments and the like collectively are Alaska’s single largest industry employer, said article authors, Neal Fried and Brigitta Windisch-Cole, both state economists. More than 40,000 jobs come under that heading, representing 14 percent of all wage and salary employment. Local government workers earned nearly $1.4 billion in 2005, or about 11 percent of the state’s entire $12 billion payroll, the authors said.

“It’s not uncommon that a local government entity represents the single largest employer in a community,” the article said.

The U.S. Census Bureau said that in 2002, Alaska spent $4,187 per capita on local government, or about $3.1 billion, which put Alaska fourth behind New York, Wyoming and California. The article said that according to the same figures, Alaska spends about 17 percent more per capital than the national average.

“This isn’t surprising given the higher costs of doing business in Alaska, particularly in rural areas,” the authors said.

In 2005, the average yearly wage for local government was $36,076. That’s 10 percent lower than the overall average for all jobs in Alaska, the article said. As recently as 1999, however, that wasn’t the case.

Government wage-growth has lagged that of most other industries in the ensuing years, the authors said. The average monthly earnings have fallen from $3,809 in 1994 to $3,006 in 2005, they said.

Most of the revenue supporting local governments and their various subdivisions comes from property taxes. The Kenai Peninsula Borough also collects a 2 percent sales tax, the revenues from which go entirely to the school district.

In other news from the Department of Labor, the statewide job count remained basically unchanged, but the unemployment rate dropped significantly in August, from 6.3 percent in July to 5.5 percent. Exactly why isn’t known, the department said, but some of the decline may be due to inherent volatility in the survey that produces the unemployment rate, said economist Dan Robinson.

On the Kenai Peninsula, according to department figures, the July unemployment rate of 6.6 percent fell to 5.9 percent in August. That number was below the 6.6 percent registered in August of last year.

Hal Spence can be reached at

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