Total wages from mining doubled since 2002

A state report shows the value of minerals produced in Alaska more than tripled between 2001 and 2011.  Mining industry wages have also surged as employers seek skilled workers.

Mining wages are a small part of private sector wages in Alaska-two percent in 2011, but total wages from mining have more than doubled since 2002. That’s according to economist Mali Abrahamson, the author of an article on the Alaska mining industry in the May edition of Economic Trends, a publication of the Alaska Department of Labor and Workforce Development.

“The annual wage paid by the mining industry has increased 22% from 2002 to 2011. In perspective, the same rate for all private sector jobs in Alaska, their wages have only grown 8%. In that same time period, ten-year interval, you see almost double the wage growth.”

While state records show thousands of active mom-and-pop mining claims, most of the jobs and production are at seven major mines: Red Dog, Fort Knox, Nixon Fork, Usibelli, Pogo, Kensington, and Greens Creek. Abrahamson says the growth in wages is due in part to the shortage of skilled workers:

“If firms were able to find less costly workers elsewhere and if they were able to bring them in from Outside, you wouldn’t see quite so much wage increase as we’ve been seeing.”

The latest figures available, from 2011, showed 300 or more openings for electricians, heavy- and tractor-trailer drivers, and construction laborers… and strong growth anticipated in jobs for miners, extraction workers, and mining and geological engineers.

Abrahamson says the growth is driven by increased production… and higher commodity prices –  the price of zinc doubled in 2006 and gold and silver prices surged in 2011. The price of gold has dropped by 20 percent since its high last year. However, Abrahamson says mining companies have increased spending for exploration. She says although it takes large projects years to reach production, she foresees continued increases:

You expect growth to occur in a kind of stair-step method, in kind of fits and starts. And that’s exactly what we see in the job growth, is that you’ll see one year in which a firm will start up a new operation and you’ll see 250 job growth in one year. And then it’ll kind of have slower growth.

Abrahamson says that same scenario has played out several times since 2005 in different locations across the state.