Alaska News

Driven by oil industry losses, Alaska unemployment claims ticked up last year

The number of people in Alaska receiving unemployment insurance benefits rose last year, according to a new state report, though spiking claims from the oil sector and industries closely tied to it "appear to be subsiding."

In 2016, the state's first year with a net jobs loss since 2009, the number of people collecting unemployment was up 2.1 percent. Most of that increase happened in the first half of the year, according to a report released this month from the Alaska Department of Labor and Workforce Development.

Though many regions of the state saw a rise in unemployment claims, Southeast and the combined area of Anchorage and Mat-Su saw a drop. The total amount of benefits paid out in 2016 was $136 million, the report said, up from $123.5 million the year prior.

[2016 was bad for the Alaska job market. 2017 might be worse.]

Many unemployment insurance claims last year stemmed from oil industry layoffs. Claimants in the oil and gas sector rose 49 percent in 2016, making it the industry with the "largest claims increase for the second year in a row," the report found.

Last year saw several layoff announcements in the high-paying oil industry as the price of oil continued a decline from 2014.

Near the end of the year, a decline in claimants from the oil and gas sector suggested that "much of the job loss in that industry had already happened and its initial wave of claims had begun to subside," the report said.

Both construction and the professional and business services sector, which are closely tied to the oil industry, also saw increases in claims. But later in the year, unemployment insurance filings shifted to other areas.

By the middle and end of 2016, claims were "up in most sectors" as the decline in oil prices rippled across the state economy as a whole.

"It's certainly notable," Lennon Weller, the state economist who authored the report, said of the state's overall increase in claims last year. "It's not huge, obviously. … The secondary and tertiary impacts to the rest of the economy (beyond oil) seemed fairly muted."

[Unemployment insurance claims rise across Alaska]

In the second half of 2016, the number of people collecting jobless benefits was up nearly 4 percent in the leisure and hospitality industries, which include arts, entertainment, accommodation and food service. Trade, including retail and wholesale, saw a 3 percent uptick in unemployment claims.

Southwest Alaska saw the biggest growth in the number of people claiming unemployment, at 12 percent. Weller said that might be because the state gets fewer claims from less populated areas, so it wouldn't take many additional claims to reflect a big bump.

The number of people filing unemployment insurance claims from outside the state spiked 24 percent last year, the report said. That group represented "just over a quarter" of all claimants last year, up from 21 percent in 2015.

"One hypothesis that we had, and certainly there's some preliminary evidence, is that we're starting to see more out-migration, which is why we saw a pretty good jump in those filing from outside Alaska," Weller said. "They may have had wages on the North Slope or Southcentral, but maybe no longer reside in the state."

Weller noted that Alaska's increase in claims in 2016 came after a year of "exceptionally low" claim levels.