Alaska hire preference goes away for much of state

Lisa Demer

The Parnell administration, in an unprecedented move, has ruled that Alaska hire requirements for state and local public works contracts won't apply to the entire state but only to limited, mainly rural areas.

No longer covered as of Friday: Anchorage, Fairbanks, the Mat-Su, Juneau and the Kenai Peninsula.

The Alaska Democratic Party howled. But officials in the state Department of Labor and Workforce Development defend the change, saying Alaska's healthy economy and low overall unemployment no longer justify a requirement to give Alaskans 90 percent of the state and local public works jobs in the major population areas.

A 1986 law says that Alaska residents in "zones of underemployment" should get job preferences and defines those zones as areas with unemployment rates "substantially higher than the national rate of unemployment." The state defines that in regulation as 10 percent above the national rate.

Since 2009, Alaska's unemployment has been below that of the nation overall, said Dan Robinson, chief of research and analysis for the labor department. The average unemployment rate for last year in Alaska, for instance, was 7 percent, compared with 8.1 percent for the United States. The Great Recession didn't hit as hard here; the housing market didn't crash.

"To get to the 10 percent or higher (above national unemployment), you'd have to go back 13 years," Robinson said. "The economic justification just gets weaker."

Officials aren't sure what the result of the new, more limited application will be.

"This is the first time the whole state hasn't been determined a zone of underemployment," Robinson said.

Commissioner Dianne Blumer made the determination, which took effect Friday, to apply the Alaska hire provision to 15 boroughs and census areas, and only for certain jobs in each. For instance, plumbers and pipefitters get the preference in the Aleutians East Borough, but not painters, who are covered in the Aleutians West Borough, or carpenters, who are covered in the Denali Borough.

To cover a special craft or trade, the state must find that the area has unemployed but qualified workers in that field as well as nonresidents taking the jobs, Robinson said.

What difference has the Alaska hire standard made? The state hasn't studied that.

The commissioner of labor must make the determination every two years. In 2011, with Alaska unemployment rates below the national average, then-labor commissioner and now state Sen. Click Bishop made a determination that 90 percent of the jobs in state and local public works contracts still should go to Alaskans. The recession was crushing the Lower 48, so it made sense to be cautious, Robinson said.

Contractors have been complaining about the requirement and the hurdles of trying to get around it through a waiver process, said John MacKinnon, executive director of the Associated General Contractors of Alaska, a trade group whose membership includes 340 contractors. He said he met two weeks ago with Blumer and she told him that change was coming.

"In an ideal world, we'd have 100 percent Alaska hire," MacKinnon said. "We just don't have the trained labor force to handle the volume of work in some spectrums."

Specialized jobs such as pile driving may draw workers from Outside, he said. So do road work jobs on contracts wedged into Alaska's short paving season.

Hundreds of millions in state and local contracts for roads, airports, schools and other public works projects go out every year, he said.

He said he has complained to Blumer about the challenges.

Vince Beltrami, president of the Alaska AFL-CIO, the umbrella trade group, said he only learned of the change Thursday, which was troublesome. He said he doubted a worker shortage really exists.

"I never agree that there's not enough Alaskans," he said.

The issue, he said, may be not training enough people and getting them into years-long apprentice programs soon enough.

A sister education foundation to Associated General Contractors is trying to recruit and prepare workers to become apprentices, MacKinnon said.

Reach Lisa Demer at or 257-4390.


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