ANCHORAGE, Alaska — Employers in Anchorage are hiring more workers from out of town and out of state to adjust to a severe labor shortage that is holding back the city’s economic recovery, according to a report released Wednesday by the Anchorage Economic Development Corp.
People – especially young people – leaving Alaska to work elsewhere are a major contributor to the problem, according to the report.
It’s a troubling sign for an economy that’s otherwise showing reason for optimism as tourists flock to Alaska and the massive federal infrastructure bill begins to pump cash into the state, according to AEDC President Bill Popp, who unveiled the three-year economic forecast.
The job-worker imbalance requires immediate attention, Popp told members of the business community during a presentation Wednesday.
Although employment is growing rapidly, it remains below pre-pandemic levels, he said. The lack of workers is creating “serious headwinds” for employers on all sides. Some cannot fully operate due to lack of employees, he said.
There are thousands more vacancies than there are people to fill them, or about two or three positions for every available worker, he said.
“Virtually every employer in Anchorage has vacancies that are not being filled due to a lack of qualified applicants,” he said.
In many cases, there are no candidates, he said.
Openings range from skilled jobs like doctors, architects, accountants, teachers and legal assistants to lower-paying jobs like restaurant workers and janitors, Popp said.
The cause of the labor shortage has been going on for years, Popp said. The data does not support the myth of would-be workers sitting lazily at home, watching TV and living off government handouts.
The labor force participation rate is a solid 79%, a factor that contradicts that view, he said.
A major contributor to the job-worker imbalance has been the city’s dwindling workforce as people retire and the city’s population has shrunk over several years, he said.
The city’s labor force shrank by 9,000 people, or 4.4%, over the five years ending in 2019, he said.
The loss of working-age residents under the age of 26 is particularly problematic. About one in three seem to be leaving for the Lower 48 permanently, worse than many other cities, he said.
These long-term forces are compounded by trends that have emerged during the pandemic in 2020, such as people becoming unable to work because they cannot find childcare support, or are doing facing COVID-related health risks, he said.
Anchorage employers have adapted in part by hiring workers from out of town and out of state in what amounts to a national competition for some workers, Popp said.
Three-quarters of the city’s workforce is locally based, he said. Eleven percent come from the Matanuska-Susitna borough and 12 percent from the Lower 48, he said.
Anyone who wants to find a job in Alaska can do so, he said.
Job postings are at levels not seen since the group began looking into the matter in 2018, the report said. About 4,600 employers posted nearly 31,000 job openings in Anchorage and the borough of Mat-Su for three months this spring, well above the number of workers available to fill them, he said. .
Even with the labor shortage, employers in the city added about 5,000 jobs, an increase of 3.6%, in the first six months of the year compared to last year.
In a strong economic sign, the company expects the city to add about 1,000 more jobs this year than it originally expected, Popp said.
The number of jobs in restaurants, bars and hotels, which are part of the hospitality industry, has jumped by 2,000 since last year.
This sector is supported by the return of cruise ships to south-central Alaska for the first time since 2019, he said. In addition, passenger numbers at Ted Stevens Anchorage International Airport, at 1.8 million visitors through May, are well above last year.
Airport passenger numbers indicate that independent travel, unrelated to pre-arranged cruise tours, is on the rise, he said. Other signs of a strong rebound in tourism include increases in vehicle rental tax and room tax as hotels fill up. The extra tax revenue is partly due to higher rates for rooms and car rentals, as prices have jumped, according to the study.
Other big job growth winners include the transportation sector, driven in part by record cargo levels at Anchorage Airport in 2021, Popp said.
Job numbers are also rising sharply in the professional services sector, where engineers and architects are beginning to work on projects associated with the federal infrastructure bill that is expected to inject $5 billion into Alaska over the next five years. years, he said.
The large number of jobs available should generate optimism, but a survey of consumer sentiment regarding future expectations was not optimistic, he said.
Contributing to this view are issues such as soaring inflation and fuel prices, supply chain disruptions and labor shortages, according to the report.
Despite consumer views, personal income is expected to rise, a positive sign for individuals, Popp said. Over the next few years, permitted projects in the city are expected to increase alongside construction activity, and passenger and cargo levels at the airport could reach record highs, according to forecasts.
New airport cargo projects, major oilfield prospects on the North Slope and the redevelopment of the Port of Alaska are among the projects that could also spur growth, according to the report.
The big challenge will be to retain workers and build 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 research solutions, he said. He is also looking at other cities for ideas, such as Oklahoma City, which has suffered from problems like Anchorage but now retains many of its workers, benefits from a growing technology sector and has become a major destination for conferences and tourism, Popp said.
“We want to learn from our competition so we can win the talent war we’re facing,” Popp said.