Good-paying jobs are state's best resource

So what?

Here's what. Alaskans take some pride in the fact that between 2000 and 2007, while most of the rest of the country was lagging, Alaska's total employment grew 12.7 percent, an outcome that was only a bit shy of 50 percent faster than the national average. But just as West Virginians presumably take some pride in leading the nation in home ownership only to find that a closer look leaves one less than thrilled, a look beyond Alaska's job performance also leaves one less than thrilled.

Alaska's 2000-2008 percentage growth in real, inflation-adjusted GDP ranked 44th out of 50 states, placing it ahead of only Michigan, Ohio, Indiana, Missouri, Louisiana and Connecticut (another surprise). How can that be? How can Alaska create employment at a much faster rate than the national average but trail badly in the growth of production of goods and services?

The answer lies in the types of jobs being created.

Almost exactly 10 years ago I addressed this problem and noted that Alaska was investing far less than the national per capita average. I also noted that what investment there was, outside of oil and gas, was mostly in relatively low-paying labor-intensive industries such as services and retailing, rather than in relatively high-paying capital-intensive industries such as mining and manufacturing. The same is true today.

Now, that is not necessarily bad for the Alaska lifestyle if Alaskans can continue to milk the North Slope cow in order to fund state and local government. But it is necessarily burdensome to the Alaska average tax payer if the cow dries up, as expected, and cannot be freshened.

So what can be done?

There are several options.

First, Alaska can re-embark on a well-thought-out search for new sources of economic growth, industries in which moderate state stimulus might just make a difference. Pursuit of North Slope natural gas fits this description although, sad to say, the current short- to medium-term outlook is pretty gloomy.

Second, Alaskans can spend lots and lots of money on pointless economic studies designed to enrich the consultants who end up telling you what you already know. If you have a long memory you might recall the 1977 "Sectoral Analysis" done by consultant firm Arthur D. Little that ended up telling us in very vague and general terms that Alaska's best options lay in (seriously) oil and gas, timber, seafood, hard rock mining and tourism. At the time I thought that was pretty obvious, said so pointedly and then caught a lot of grief for raining on the state commissioner of revenue's proposed parade.

Third, Alaskans can get really carried away by either hype or feel good projects as in the once proposed Alpetco petrochemical plant and the short-lived Delta barley project.

Finally, Alaska's leaders can prepare for the possibility that the oil and gas cow will dry up and cannot be freshened. I think that you all know what that entails.

David M. Reaume is a Washington state-based economist who worked for many years in Juneau. His opinion column appears every month in the Anchorage Daily News.