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Unemployment spikes in Southwest Alaska as winter settles in

Joseph Miller

A rise in the unemployment rate for southwest Alaska seems to be spiking at an alarming rate as the winter months continue. The October unemployment rate in the Dillingham Census Area reached a startling 10.1 percent, which indicates a 1.3 percent jump from the statistics recorded in September.

The entirety of the Bristol Bay Borough had an unemployment rate of 6.9 percent last month, which is also a significant spike from the 3.7 percent that was recorded in September. While the statewide unemployment rate has risen in the last month from 5.5 percent to 6.1 percent, it appears that the southwest region of Alaska is the only region to reach a double digit percentile in the state. This includes the Bristol Bay Borough, the entirety of the Lake and Peninsula Borough, the Aleutians East Borough, the Aleutians West Census Area, as well as the Bethel and the Wade Hampton Census areas. The highest unemployment rate within these regions was in the Wade Hampton Census Area, which was 19.7 percent, which had increased approximately 1.4 percent since September, meaning that the Wade Hampton area also has the highest unemployment rate in the state. The City and Borough of Juneau had the lowest rate last month at 4.3 percent. The largest increase in unemployment was in the Municipality of Skagway, where the rate climbed from 2.7 percent in September to a staggering 15.5 percent this October.

"There can be a lot of big changes that occur very quickly in Alaska's sub-states," said Caroline Schultz, an economist for the Alaska Division of Labor and Workforce Development. "For instance, the fishing and tourism industries change very dramatically with the seasons in Alaska, so the changes in these numbers happen really fast. We have a very different economic environment here compared to many other states. Bristol Bay in particular has always been seen as having one of the more dramatic swings, but it is because it is so tiny in regards to population. Dillingham is the same way."

According to Schultz, every state has its own seasonal adjustment model that takes into account the seasonal conditions of the state and the effects that it has on the state's economy. The total percentages are controlled on smaller division levels within the state, and since every state has its own system of adjusting to seasonal patterns, the percentages sometimes show things without much explanation that might not accurately reflect the actual economic conditions of the area.

"It's tough in rural Alaska and in areas like Bristol Bay because it is so much different out there compared to a lot of places in Alaska and certainly in the country as a whole," Schultz said. "Out there people don't look for jobs the way that people look for jobs in the city. Some people say that our estimates understate the unemployment rates in some of these areas, but we are really just compiling this data based on the definition of 'unemployed'. The numbers are kind of a clunky tool when compiling the data for areas that might not have more than a few hundred people."

While the percentages of regional unemployment in Alaska may seem daunting, these figures are based off of the recorded populations and civilian labor forces of these areas. In the Bristol Bay Borough, there were 1,048 recorded in the civilian labor force in September, and only 556 remained by October. This means that in September, 32 people were unemployed in the Bristol Bay Borough and by October, that number had risen to 38 people. In Dillingham, the main population center within the borough, the number of unemployed civilians had grown from 173 to 186 between September and October.

In an attempt to clarify between those who are unemployed and those who are not working, the Alaska Department of Labor and Workforce Development made a point to define the unemployment figures in their press release that was issued on Nov. 22 on the department's website.

"The official definition of unemployment excludes anyone who has not made an active attempt to find work in the four-week period up to and including the week that includes the 12th of the reference month," reads the press release. "Many in rural Alaska do not meet the definition because they have not conducted an active job search due to the scarcity of employment opportunities."

While the compiled percentages across Alaska are calculated using a formula to arrive at a "seasonally adjusted rate" of unemployment, the percentages of the "sub-states", which consist of Alaska's municipalities, districts or boroughs are not. Because of this, the rise and fall of unemployment percentages in these smaller, more localized areas seem much more dramatic when compared to the statewide averages.

As one might expect, it is the prediction of the division that the unemployment percentages will go back down in many areas in Alaska after the winter months pass and the fishing industry comes back into full swing. According to Schultz, Bristol Bay has one of the state's lowest unemployment rates in the summer, particularly because of the area's booming salmon industry.

"It's a pretty consistent trend here in Alaska that unemployment goes back down once things start to warm up and the fisheries and canneries start to reopen," Schultz said. "Jobs are a bit spotty in the winter in southwest Alaska. Pollack fishing will cause percentages to go down a bit in the Aleutians and there will be some changes because of the winter crabbing season in Bristol Bay, but it doesn't have that large of an effect."

Despite the escalating unemployment rates that seem to be moving through the southwest regions, Alaska's unemployment rate lingers around 6.5 percent, which is 1.2 percent lower than the national rate. The unemployment rate for Alaska last October was 6.8 percent, meaning that there has been a small decrease in the amount of Alaskans that are out of work this year. The Alaska Department of Labor and Workforce development confirms that Alaska's unemployment rate as a whole has been below the national rate for the last five years. However, the gap between Alaska's unemployment percentages and the nation's has been getting smaller every year since 2010. Only time will tell if Alaska will be able to maintain its lead in the coming years.

This article originally appeared in the Bristol Bay Times/Dutch Harbor Fisherman and is republished here with permission.