State economists are predicting modest job growth in 2024 across Alaska in a new report released Tuesday by the state labor department. Officials anticipate Alaska employers will add some 5,400 jobs, a 1.7% increase.
After substantial job losses in 2020, employment has grown steadily since 2021 at more than 2% per year. Labor department economist Karinne Wiebold, who wrote the report, said in an interview that the slightly weaker forecast for 2024 reflects larger trends.
“Really, the story here is that we're out of the COVID recovery, big picture, and we're moving into this new phase where we're going to be absorbing this infrastructure money that's been coming from the federal government as part of the Infrastructure (Investment and Jobs) Act, and also the Inflation Reduction Act,” Wiebold said. “Those dollars we expect to start hitting the pavement this year, and that's going to be one of our primary drivers for growth this coming year.”
Construction is expected to add 1,100 jobs, an increase of 6.7%. Employment in the mining and the oil industry is another bright spot in the forecast, predicted to grow 8.7%, or 1,000 jobs. Economists point to a new gold mine near Tok set to begin production this year and preliminary work expected on the Willow and Pikka oilfields.
But as with any forecast, there’s a lot up in the air. An unexpected national or international recession could put a damper on tourism numbers. Delays on infrastructure projects could push back construction hiring. But the biggest headwind, Wiebold said, is the persistent labor shortage. There are twice as many job openings as unemployed people in the state.
“If we don't have the people to fill those jobs, then those jobs, in a sense, haven't been created,” she said. “So that's really the kind of the wild card: are there going to be the people to fill the jobs in the places and at the times that we need them?”
The report points to two factors making the labor shortage especially acute in Alaska. For one, a large portion of the state’s population is aging into retirement. For another, more working-age people between 18 and 64 years old are leaving the state than moving in – especially young families in their 20s and 30s.
Between 2013 and 2022, the state’s population was essentially flat, losing just about 1,000 people. But over that same period, as the population grew older, the state lost 30,000 working-age adults and 18,000 jobs, according to Wiebold. About 40% of those losses came from the oil and gas industry, according to state economic data.
And Wiebold says even industries like fish processing and tourism that tend to import their workers from out of state could find themselves struggling to hire.
“If we can't draw some of those out-of-state workers up here this year because they have opportunities that are closer to home, or perhaps that pay more, then we could be struggling to fill jobs in industries that regularly rely on that out-of-state workforce,” she said.
Wiebold cited the labor shortage as one reason that jobs in leisure and hospitality are forecast to grow a modest 1.4% despite cruise ship visitor numbers forecast to reach or exceed last year’s records.
Jobs in manufacturing, finance and the information sector are expected to underperform other industries with zero growth, though none are forecast to shed workers.
The data excludes people who are self-employed, farm workers, domestic workers, unpaid family workers, uniformed military members and most commercial fishermen.
