There's been a lot of talk and misconceptions about Alaska hire lately. As representatives of the Alaska construction industry, few people believe in local and Alaska hire more than we do. We want to set the record straight on some of those uninformed, misleading and politically motivated comments.
Alaska hire applies to a small slice of the pie to begin with. The Alaska Hire statute does not apply to private construction projects or projects with any federal funds. It only applies to projects that are 100 percent funded with state or local dollars. This is about 7 percent of the total construction volume this year.
Alaska law directs that areas of the state be designated zones of underemployment if area unemployment rates are substantially higher than the national rate. The Aug. 16 determination by the Alaska Department of Labor and Workforce Development allows 15 areas to remain as zones of underemployment, with residents in certain occupations given a hiring preference on eligible public works and construction projects in the designated zones. The designation is based on the fact that Alaska's unemployment rate has been below the nation's since 2009.
This will not open the floodgates to outside contractors coming to Alaska. That is and always has been an option thanks to the Privileges and Immunities Clause of the U.S. Constitution. That privilege establishes open borders among the states and allows residents of other states to come to Alaska and work. It is those open borders that allow many Alaska residents and companies to go to work in North Dakota and other states. Outside contractors come and go, and some succeed and stay to become Alaskan contractors.
Many of our construction workers need to travel south for the winter, not just for the sun, but for additional income to supplement what they earn in our short construction season. We get their skills in the summer when we need them and they get to fill out their income working in other states.
It costs much more for a contractor to import labor from the Lower 48 than it does to hire a local. The public projects that the Alaska hire law applies to have a prevailing wage requirement -- workers are paid at published rates. Contractors can't hire $10 per hour workers. The prevailing wage requirements also include paying subsistence at $75 per day to workers whose domicile is more than 75 miles from the job. Why import workers when it costs more?
Except for the pipeline, when Alaska could not meet the labor demands, there has not been a large influx of outside construction workers into Alaska. There are not the margins on construction projects to allow contractors to hire outside labor. Why would they, when some of the best are available in Alaska? The excellent training Alaskans receive in the construction trades results in some of the best trained workers in the country.
In Alaska construction, about 20 percent of the construction workforce is nonresident. That is at par with the non-resident percentage of the whole Alaska workforce. Some industries are better, some are worse. As one would expect, government employment includes a very high percentage of resident workers. In seafood harvesting, including permit holders and crew, almost 42 percent of the harvesting workforce are non-residents. In seafood processing almost 75 percent of the workforce are non-residents. Seasonal industries have higher percentages of non-resident workers.
It is offensive to Alaska contractors to think we aren't for Alaska hire. Alaska contractors go out of their way to hire local, to hire Alaskan. The updated determination will not affect this.
John MacKinnon is executive director of Associated General Contractors of Alaska. Amy Nibert is president and CEO of the Alaska Chapter of Associated Builders and Contractors Inc.