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Alaska wages lower but incomes higher than they were 25 years ago

Wages for Alaskans working year-round are about $4,000 lower than they were 25 years ago, according to a new report by state labor economists. And yet Alaskans are actually taking in more money than they were in 1989, even when inflation is taken into account.

The lower wage numbers reflect in large part the expansion of restaurants and retail stores, where jobs tend to be lower-paying, in the last two and a half decades since the oil-driven boom of the 1980s, said report author Mali Abrahamson, an economist with the Alaska Department of Labor.

"We can have only high-paying jobs and no services because everyone is working in the oil patch or we can have services," she said.

And although 1989 marked the tail end of Alaska's biggest recession, wages were still in a cooling trend after the extraordinary boom years preceding the bust, she said. They hit a low in 1999 before rising again to near-current levels.

Overall, with the exception of health care, wage levels dropped for a wide swath of occupations, including those in state and local government, construction, food prep, personal care, architecture and engineering.

The wage numbers are incomplete in that they do not include the substantial number of federal workers, both civilian and military, in Alaska and the large number of seasonal workers. Business owners, including partners in law firms, medical practices, restaurant ventures or contracting businesses, were not counted either.

Wage drop outweighed by other income sources

Alaskans may be taking home lower wages but appear to be earning more through other means.

Wages -- the amount people are paid on the clock -- are only one way a person might earn money. Although wages have dropped for Alaskans, other income sources have risen: namely, pensions and health-care benefits for workers, as well as Medicare, Medicaid and Social Security benefits. Income also includes additional employee benefits such as 401(k) matching and dividends from corporations or the Alaska Permanent Fund.

Taken together, the increases in other forms of income have outweighed the wage drop, driving up Alaskans' income since 1989 by about $13,000 per person, according to data from the federal Bureau of Economic Analysis. The state's median wage per person was the highest in the nation in 2013, and median income per capita was also among the nation's highest.

"I don't think we are worse off now than we were in 1989," Abrahamson said. "It would be accurate to say that Alaskans are making more money today than they were then."

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