AD Main Menu

Alaska jobs reach record level, but oil industry isn’t powering the growth

Alex DeMarban
A record haul of pink salmon last summer fueled the hiring of additional workers in the fisheries sector. Courtesy of Alaska Department of Fish and Game

Employment in Alaska reached its highest level in history late last summer. But it wasn’t the oil industry -- which has said it is ramping up work following a tax break passed by the Legislature in 2013 -- that drove the increase, according to numbers provided by the Department of Labor and Workforce Development.

While the oil and gas industry’s year-over-year growth continued -- part of a decade-long trend as oil prices have tripled -- the job growth was much slower than the blistering pace seen the year before.

Oil production is the Holy Grail of the tax cut -- it pays for most state services. But critics of the cut have said production won't rise enough to pay for the hundreds of millions of dollars a year the state will lose because of it.

But proponents of the cut, such as Gov. Sean Parnell, have said it will have another important benefit: More high-paying jobs that fuel the economy. 

Perhaps hiring is accelerating in 2014 -- oil companies have said they’re spending and doing more in Alaska. But as of last September, the job gains had so far been slow.

Big growth in fishing, health care

An average of 353,189 people had jobs in Alaska during July, August and September, the latest quarter for which precise figures are available.

That was an increase of 0.6 percent from the same period in the previous year, the department announced Tuesday. Employment peaked in August at 358,470 workers, the highest monthly job count on record.

Government jobs were down during the quarter. Federal employment dropped by 993 from the third quarter 2012. Local government jobs were also down, part of a trend related to cutbacks at schools. But on the plus side, the private sector added 3,348 jobs, compared to the same period in 2012.

The state Labor Department noted that the seafood processing industry, which added more than 1,000 jobs to handle last year’s record run of pink salmon, accounted for much of the growth. Also important were 750 additional workers added in the health care and the social services sector, the department said in a statement.

Alaska employment is always highest in the third quarter, thanks to seasonal hiring that increases most during the summer months, as tourism, commercial fishing, and other industries are in full swing.

Oil and gas jobs

As for employment in the oil and gas industry, the number of workers rose to about 14,300 during the quarter, an increase of about 200 jobs from the same period in 2012.

The tax cut was passed last spring, and didn’t go into effect until January of this year. But since last July, Parnell’s office has touted claims that work has increased in the oil patch because of the Legislature’s decision. A series of video testimonials is posted on the governor's web site.

But the job growth was significantly higher during the same period a year before, before the passage of the tax cut. Between the third quarter of 2011 and the third quarter of 2012, the industry added 750 jobs.

A couple of years does not a trend make, however.

Carolina Schultz, an economist for the state Labor Department, said employment in the oil and gas industry has seen small ups and downs in recent years. But the general trend has been up.

“It is too soon to tell if third quarter’s slower growth is indicative of a change in the trend, or just another normal slow-down in activity,” she said.

During the six years the old tax system was in place, employment rose. Between November 2007 and September 2013, 2,567 jobs were added, as workers jumped from 11,737 to 14,304, according to figures provided by Schultz. 

During that six-year period, hiring slumped for a spell starting in 2009, after oil prices fell from more than $100 a barrel to less than $50 a barrel.

As for the previous six-year period that started in November 2001, before the tax increase, the oil and gas industry added 2,746 jobs.

Contact Alex DeMarban at alex(at)alaskadispatch.com