Private and federal investments are pouring billions of dollars into Alaska’s economy, but Anchorage is struggling to keep and attract working-aged adults.
Experts say the trends in state and national demographics mean labor shortages will only intensify in the years ahead, limiting growth.
For 2024, Anchorage’s economy is forecast to grow, but business leaders say the city has got to work on attracting and retaining workers.
“More than half of our Alaska-born citizens are eventually leaving the state,” said Jenna Wright.
Wright is Anchorage born and raised, and she stayed. Wright now leads the Anchorage Economic Development Corp. She delivered the nonprofit’s 2024 economic forecast last week, which is sort of an annual state of the economy.
“In general, 2024 is going to be a great year for the Anchorage economy. We’re seeing lower inflation, higher personal income and we’re going to see job growth in most all sectors,” she said. “However, the fact that we do have anywhere from two to three jobs for every one person seeking work is going to inhibit our ability to expand the economy.”
Wright walked through dozens of indicators and data points that translate into new jobs in Anchorage: Investments in North Slope oil field projects, a new FedEx sorting facility at Ted Stevens Anchorage International Airport, NorthLink Aviation’s work on a new air cargo facility, a new Amazon sorting facility, tonnage records at the Don Young Port of Alaska, visitor numbers rebounding, and hotel investments. She said general contractors, architects and engineers have years of backlogs in construction work to do, with more to come thanks to huge federal infrastructure investments.
“However, the speed of completing these projects will be stifled by the severe worker shortages that are inevitably going to increase project timelines,” Wright said.
Some version of that caveat applies to a lot of the good news. In the visitor industry, for example, she said visas for foreign guest workers haven’t rebounded to pre-pandemic levels.
Wright flagged Anchorage’s housing market as another key pinch point. The city has a low rental vacancy rate, new home building has been in a long decline, and costs are high. Many local officials say it’s a housing crisis.
“We must retain and attract workforce to Anchorage if we want our economy to grow, and it’s going to be very, very difficult to do that if we’re not building enough housing to meet demand,” Wright said.
The community, she said, has to be deliberate about investing in Anchorage.
“We’ve got billions of dollars coming our way from private oil field projects private investment, and we are seeing public infrastructure funding at levels that we haven’t seen since the 80s,” Wright said. “These dollars could either serve as a quick flash in the pan that keeps us afloat, or they can be the foundation on which we launch ourselves into economic growth and prosperity through intentional retention and attraction efforts and investments in our city.”
It’s competitive, and Wright said that’s what it will take to become a place “worth choosing” over other cities.
Which is Patience Fairbrother’s field of expertise.
“I actually work as a recruiter for cities and states and regions and countries,” Fairbrother said. “So I help places to build the workforce that they need through marketing and research.”
She’s the vice president of talent attraction with Development Counsellors International based in New York City, and she was the event’s keynote speaker. Fairbrother shared insights from her company’s seventh annual “Talent Wars” report, which is based on surveys of more than 1,000 working-aged adults who’ve relocated at least 100 miles in the last three years.
Since the pandemic, she said quality of life has become the top trigger for moving.
“I think we all had a lot more time during the pandemic sitting around at home and for myself working, you know, just a few feet from my bed in my tiny New York City apartment to reflect on, you know, work and life and what I really want out of it,” Fairbrother said. “So people have been making different decisions.”
The next most common triggers were moving to be closer to family, and taking a job that requires moving.
Once someone decides to move, Fairbrother said cost of living, housing costs and housing availability have consistently been the most important factors since the survey began in 2017.
“And what this tells us is that people prioritize the practical factors over the nice-to-haves,” she said. “So someone needs to know that they can afford a comparable or better quality of life than what they previously had.”
Fairbrother highlighted four of Anchorage’s strengths in the competitive labor market:
- a strong, diversifying economy,
- an in-state talent pool from of the University of Alaska system,
- military veterans and transitioning military personnel, and
- a potential tourist-to-talent pipeline that leans on outdoor recreation.
“A lot of places say they have outdoor recreation, but it’s not like this,” she said. “So you have a great opportunity to attract the kind of people that want to get out there in a really big way.”
Fairbrother also echoed Wright’s call to invest in making Anchorage a better place to live.
“It’s super, super important that you all do your part to support the things that are not only going to improve the quality of life for residents, but also be attractive to those that we need to attract here,” she said.
She said Anchorage can’t be all things to all people, but it can lean into its competitive advantages and focus on marketing to receptive audiences.