State economist says Kenai Peninsula job market recovering faster than Alaska

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Attendees at the 2024 Industry Outlook Forum, hosted by the Kenai Peninsula Economics Development District, at the Soldotna Regional Sports Complex. (Hunter Morrison/KDLL)

While Alaska’s labor market is still struggling after a pandemic recession, the Kenai Peninsula has already successfully rebounded. That’s per an economist who presented to a Soldotna audience last week.

On April 25, the Kenai Peninsula Economic Development District, or KPEDD, hosted its annual Industry Outlook Forum, a yearly symposium on the economic future of the peninsula for businesses and other local stakeholders.

In one of the first presentations of the day, attendees learned about broader job market trends in the nation and Alaska, and how they compare to the Kenai Peninsula.

Department of Labor Economist Sam Tappen told the audience the U.S. job market has essentially rebounded since the pandemic, but that’s quite not true in Alaska.

“Even before COVID started, Alaska was kind of on shaky ground,” he said.

In the five years before the pandemic, Alaska had some of the slowest job growth in the nation across all sectors. Tappen said that decline was a result of a drop in oil prices in 2015 that reduced the value to a third of what it had been. But when the pandemic began, things got worse.

“In 2020, we lost 27,600 jobs,” he said. “Most of those were leisure and hospitality, trade, transportation, utilities, sectors which are tied pretty closely to the visitor industry, but also lots of oil and gas, government and many other jobs.”

Tappen said the statewide job market is still down in most industries, including oil and gas and local government.

The Kenai Peninsula lost more than 1,000 jobs, especially in the hospitality industry, after the pandemic. But in comparison to the rest of the state, the peninsula’s rebound has been better than other places in Alaska, and the community has actually added more than 1,000 jobs over pre-pandemic numbers.

In general, Tappen said, Alaska is trending in the right direction. But a historically low workforce participation rate is creating a tight job market he said is holding back the state from full economic recovery.

“People are aging out. For a long time, the biggest portion of the labor force was the baby boomer population, which is disproportionately large. However, they are aging out, generations are not as large, so we’re seeing reductions there,” he said. “Net migration is the other big problem. For 11 straight years, more people have moved out of Alaska than have moved in.”

A shrinking labor force is bad for a growing economy, Tappen said. But again, the Kenai Peninsula is heading in the other direction; the peninsula is actually growing, unlike most of the state, as people seek affordable housing outside of cities.

To keep growing, Tappen suggests leveraging federal funding opportunities, marketing Kenai opportunities to job seekers elsewhere in the state or country, and taking advantage of the market that currently favors job-seekers by offering trainings in certain trades or hiring remote workers.

KPEDD Director Cassidi Cameron reacted to Tappen’s presentation with a nod to its positive outlook.

“The future’s not bleak,” she said. “There’s hope, the Kenai Peninsula has so much to offer, and we need to tap into that, and we need to tell people about that, and convince them that this is the place to be.”

This was Cameron’s first forum since she took over as director in December.

The event continued all day, and included presentations about mariculture, technical education, housing, childcare, broadband internet and local development projects. Senator Dan Sullivan also made a surprise appearance. You can stream the entire day of events at KPEDD’s website.

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