My grandfather, Sheriff Ed Crawford (Sunrise, Alaska, around 1910) used to say "Figures don't lie, but liars figure." I rely on that sage advice when reviewing the constant stream of economic reports on the demise of Alaska's economy.
Start with the report of Erickson and Associates, published April 12, 2015, entitled "The Great Alaska Recession." The report announced (in 2015) that Alaska was already in a recession. The problem is that the reported recession outlined in the report did not happen. When economists or special interests manipulate economic data to redefine recession, they are just playing politics. The recession bogeyman is a scare tactic used by the big spenders to keep profligate spending. Public unions say right-sizing Alaska's government will cause a recession, and redefine a recession to mean any time where public spending is in jeopardy.
Moody's Analytics recently joined the fray to bolster the argument of those who demand that we raise taxes and raid the Permanent Fund. In a real stretch, they pronounced that Alaska is in a recession because the price of oil is down and may be for a while. It appears that they missed the 7 percent growth in air freight and passenger traffic in Alaska during 2015. Or the huge expansion of the retail sector or the continuing replacement of Outside medical services with Anchorage-based statewide facilities. How many oil workers does it take to make a doctor's income? We love them both, but don't exclude non-oil-worker Alaska jobs from the analysis. Net job creation in Alaska boosted total employment for 2015. The Great Alaska Recession was projected in 2010, 2012, 2013, 2014 and 2015. Each failed to occur. Let's look at facts and define a recession.
Businessdirectory.com defines a recession as: "Period of general economic decline, defined usually as a contraction in the GDP for six months (two consecutive quarters) or longer. Marked by high unemployment, stagnant wages, and fall in retail sales, a recession generally does not last longer than one year and is much milder than a depression." In Alaska, we look at employment and the gross state product.
According to Alaska Economic Trends, a publication of the state labor department, the preliminary revised seasonally adjusted unemployment rate for Alaska as a whole in October 2015 was 6.4 percent, compared to 6.7 percent in 2014. Not seasonally adjusted, the unemployment rate was still down year to year. That fails the definition of a recession, even an economist's.
In 2015, jobs were up. Air transportation grew. Tourism passed two million visitors. Fishing had a great year. Military reduction was stopped dead by our congressional delegation and world events. Alaska's bases will not be downsized, and if the next president is a Republican, military spending in Alaska will rise. Military planners know well that Alaska is situated within 9 hours' flight time to 95 percent of the world. And retail grew ... strongly.
Rising Alaska wages from 2008 through 2015 beat the national average, refuting the notion of a recession. Alaska's economy is driven by complementary industries that rise or fall with the price of oil. The cost of fishing goes down with a drop in oil pricing. The cost of tourism goes down with the drop in oil. Air transportation goes down with the drop in oil. And Alaska employment goes up in each of these industries. This counter-cyclical influence brings job stability over all in a changing economy.
Housing is another strong indicator of a recession-proofed Alaska. Alaska homes became increasingly affordable in 2000 through the first half of 2015, according to the headline in another labor department story. Anchorage residential sales were up 6.95 percent in 2015. An increasing real estate market is not a good fact for the doomsayers, scaremongers and economists.
Alaskans need to know that predictions of Alaska's recession are just political maneuvering. If the Legislature caves in to special interests and refuses to right-size government, your Permanent Fund dividend will be sacrificed at the altar of more government spending. That's what this game's all about.
Public employee unions and their allies' motives are certainly understandable. They are just protecting their turf at the expense of all other Alaskans. They are willing to sacrifice the retail economy of Alaska to keep state employment high.
What is at stake is really important to your kids and grandkids. If legislators don't right-size government by reducing a major hunk of the 71-percent growth in state spending since 2006, if the Walker administration gets away with only making $100 million in cuts instead of the $700 million needed, if you and I can be scared into redefining a recession as a decline in public spending, then the plan to invade the Alaska Permanent Fund will succeed. Alaska's days of private sector economic expansion will be over.
Don't be bamboozled into supporting the PFD raid by reports of economic recession. These recession threats are simply not true according to the state of Alaska's own employment records. Read the real numbers. Join the debate.
Jim Crawford is a lifelong Alaskan, born and raised in Anchorage but also lived in Fairbanks, Tok and Valdez. He is a real estate broker, fiscal and social conservative and a former chairman of the Alaska Republican Party.
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