A shrinking workforce is slowing Anchorage’s post-COVID-19 economic recovery, the report says

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Anchorage employers are hiring more workers from outside the city and state to adjust to a severe labor shortage hampering the city’s economic recovery, a report released Wednesday by the Anchorage Economic Development Corp.

People — particularly young people — who leave Alaska to work elsewhere are a major contributor to this problem, the report said.

It’s a worrying sign for an economy that’s otherwise making sense for optimism as tourists flock to Alaska and the huge federal infrastructure bill begins pumping money into the state, according to the AEDC president Bill Popp unveiling the three-year economic forecast.

The imbalance between the workplace and workers needs immediate attention, Popp told members of the business community during a presentation on Wednesday.

Although employment is growing rapidly, it remains below pre-pandemic levels, he said. The labor shortage creates “serious headwinds” for employers of all persuasions. Some cannot work full time because of the lack of staff, he said.

There are thousands more jobs than there are people to fill them, about two or three jobs for every available worker, he said.

“Virtually every employer in Anchorage has open positions that remain unfilled for lack of qualified candidates,” he said.

[Alaska’s June job numbers are up from 2021 but lag behind pre-pandemic figures]

In many cases there are no candidates, he said.

Vacancies range from skilled jobs like doctors, architects, accountants, teachers and legal counsel to lower-paying jobs like restaurant workers and janitors, Popp said.

One in three young workers leaves Alaska

The cause of the labor shortage has been in the making for years, Popp said. The data doesn’t support the myth of potential workers sitting lazily at home, watching TV and living on government subsidies.

The participation rate is a strong 79%, a factor that contradicts this view, he said.

A major factor in the work-job imbalance has been the city’s shrinking workforce as people retire and the city’s population has shrunk over several years, he said.

The labor force in the city fell by 9,000 people, or 4.4%, in five years to 2019, he said.

Of particular concern is the loss of working-age residents under the age of 26. About one in three appears to be permanently in the bottom 48, worse than many other cities, he said.

These long-term forces are compounded by trends that have emerged during the 2020 pandemic, such as: B. That people become disabled because they can’t find help with childcare or that they face health risks related to COVID, he said.

Anchorage employers have adapted in part by hiring workers from outside the city and state, which amounts to national competition for some workers, Popp said.

[More grants coming to stabilize Alaska’s fragile child care system]

Three-quarters of the city’s workforce is local, he said. Eleven percent are from the Matanuska-Susitna district and 12 percent are from the Lower 48, he said.

Anyone who wants to find a job in Alaska can do so, he said.

Job postings are at a level not seen since the group began investigating the issue in 2018, the report said. About 4,600 employers posted nearly 31,000 job openings in Anchorage and Mat-Su County for three months this spring, far exceeding the number of workers available to fill them, he said.

Despite the labor shortage, employers in the city added about 5,000 jobs in the first six months of the year compared to last year, a 3.6% increase.

As a strong economic sign, the group expects the city to create around 1,000 more jobs this year than originally expected, said Popp.

Tourism is roaring back

The number of jobs in restaurants, bars and hotels that are part of the hospitality industry has increased by 2,000 since last year.

This sector will be brought back to south-central Alaska by cruise ships for the first time since 2019, he said. The number of passengers at Ted Stevens Anchorage International Airport is also well above the previous year with 1.8 million visitors up to May.

Passenger numbers at the airport show independent travel unrelated to pre-arranged cruise ship tours is making strong headway, he said. Other signs of a strong tourism recovery include rising rental car taxes and room taxes as hotels fill up. The extra tax revenue is partly due to higher room and rental car rates as prices have skyrocketed, the study found.

[Some Alaska workers are facing a crisis in housing. Employers hope that if they build it, employees will come.]

Other big winners from job growth include the transportation sector, which will be fueled in part by record freight at Anchorage Airport in 2021, Popp said.

Jobs are also rising sharply in the professional services sector, where engineers and architects are beginning to work on projects related to the federal infrastructure law that is expected to pump $5 billion into Alaska over the next five years, he said.

The large number of jobs available should inspire optimism, but a consumer sentiment survey of future expectations is not optimistic, he said.

Contributing to this view are issues such as rising inflation and fuel prices, supply chain disruptions and labor shortages, the report says.

Despite consumer sentiment, personal income is expected to grow, a positive sign for individuals, Popp said. In the next few years, in addition to construction activity, approved projects in the city are also likely to increase, and passenger and cargo traffic at the airport could reach record levels, according to the forecast.

New cargo projects at the airport, major oilfield prospects on the North Slope and the redevelopment of the Port of Alaska are among projects that could also boost growth, the report said.

The big challenge will be retaining workers and building a workforce with the right skills to meet demand, he said.

The company, with support from other Anchorage business groups and the Anchorage Assembly, has hired a consultant to explore solutions, he said. It’s also exploring other cities for ideas, such as Oklahoma City, which suffered from problems like Anchorage’s but now retains many of its workers, enjoys a growing tech sector and has become a major destination for conferences and tourism, Popp said.

“We want to learn from our competitors in order to win the battle for talent,” said Popp.

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