Alaska’s worker shortage is due to pandemic retirees and funding instability, economist says

“Now Hiring” signs cover the door at a local grocery store in Anchorage. (Photo by Michael Fanelli/Alaska Public Media)

Employers in Alaska have a lot of job openings.

In May, about one in every nine jobs in Alaska was unfilled, according to the state’s latest labor data. That’s almost double the national rate.

Both national and state numbers show job openings are still far higher than before the COVID-19 pandemic.

State economist Dan Robinson said one of the main causes of Alaska’s worker shortage is the number of Baby Boomers who decided to retire early.

“A disproportionate percentage, an unusually large number of those people, I think at the 50-, 60-plus age group, said, ‘We’re out, we’re done. We can afford it. Stock market’s been good. Housing market’s good. I can afford to retire now, and this pandemic thing makes work difficult,’” Robinson said.

Another sizable portion of those who didn’t return to the labor force post-pandemic were people in their 30s. Robinson attributed that to the persistent challenge of finding child care.

Alaska has also had more people leaving than moving to the state for the past nine years. And people often make a move for a job or to improve their quality of life, both areas Alaska has struggled with over the last decade, Robinson said, pointing to the instability arising from Alaska’s government funding challenges.

“We had a lot of years where (state government) could just take the money from oil revenue and pay all of our bills,” he said. “And for 10 years — some people would say, 20-plus — we’ve struggled with, ‘Is it enough?’ Do we need to have taxes, do we need to make changes to the dividend?”

That funding instability has come at the expense of many of the common amenities that would motivate people to move to, and stay in, the state, Robinson said.

“Schools is such a big one,” he said. “The universities had a tough time. Some of our students left who would have stayed if the university had the benefits of stability. You think of Southeast, the ferry system. And then, you know, crime, homelessness, parks, trails, the things that different people value.”

The pandemic accelerated Alaska’s worker shortage, but with so many older workers retired and not enough to replace them, Robinson said employers need to get used to this new labor market.

Meanwhile, he said, one possible silver lining to the cloud of economic recession: If the economy takes a downturn, employers might be less likely to lay off the workers that were so difficult to hire.

Whether Alaska’s high job openings rate has continued is yet to be seen, as the labor data on job openings for June and July have not been released yet.

Alaska Public Media

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