The economy of Alaska has been lagging behind the other states in recent times, but in the last year, Alaska’s total personal income increased 4.8 percent, which is more than double the national average. State economic analyst Neal Fried says he sees some positive signs in Alaska’s historically robust employment market and slowed rate of inflation, but warns not to place too much hope on 2022’s growth in income. The increase can be explained largely by the huge Permanent Fund dividend last year.
Listen:
Neal Fried: Two things occurred first at the national level, and the other at our level. Between 2020 and 2021 the federal government was putting lots of money to households everywhere economically to assist with the entire COVID issue. It was whether it was increased jobless benefits, check were sent to us and other cash — and it was all over the nation. Then, it all was gone by 2022. This is known as transfer income. And nationally the decline was 15%, a significant decrease. Ours did not. Surprisingly, ours rose by 1% that’s not an amount however minus-15 against plus-one is a significant amount. The reason ours increase was, of course, due to the huge dividends paid out this year. This is for our income to have grown substantially faster than other people in the country that has not been seen for quite a while.
Michael Fanelli: Just looking at salary and wages and leaving everything else aside, do these appear to be increasing too?
Neal Fried:They’re increasing. It’s true that they dropped in 2020 clearly and we lost the entire workforce. However, every year since then when our economy has been gaining momentum it has been growing. They were up in 21 and then increased in ’22 and are expected to go up in the coming year, too. We’re lagging behind the rest of the nation. We have less jobs in Alaska in the present than in the year 2019. While the country soared over that figure in the early part of 2022 and now there are more Americans working in the United States than ever before. It is evident that the American business sector has phenomenal over the past decade. The last 10 years for Alaska in terms of employment growth is pretty poor.
Michael Fanelli: Yeah. I’m sure that a lot those struggles in the last decade has been caused by the drop in the price of oil, isn’t it?
Neal Fried: Prices of oil, and oil production as well as other indicators, too. But I have to declare that despite of all this the job market is thriving. That’s a second kind of bizarre contradiction happening right now is that we’re blessed with a wonderful job market. This is a nightmare for employers but it’s also a great spot to search for work. I’ve never experienced an employment market as competitive as this. In addition I’ve been in this field for an extremely, very long duration. So, it’s an enormous advantage. If you’re talking about people who aren’t happy with their work and are looking for an alternative job, I’m not sure they’ve had opportunities similar to this before. Teenagers who are leaving the high school system, and in actual fact they’re more teens working than there were in the 1950s.
Michael Fanelli: Okay, changing things a bit in terms of the spending power from this income, it seems like our notoriously high prices for consumer goods are currently declining at a minimum in Anchorage as compared to other states. Do you have any idea why that is happening?
Neal Fried: It’s fascinating. In the year before the CPI which is the rate of inflation in the year was 8.1 10% in Alaska. In this case, we’re talking about the shift in costs of living. We just received the most recent figures for April. If you compare the month of April this year with April of last year, the rate had decreased to 3.1 percentage. This suggests with the figures that the cost of inflation of Alaska by 2023 likely be considerably less than what it was in 2022. That’s positive news. Another benefit was that food prices actually decreased in comparison to in the previous year, which was a bit negative. This doesn’t mean they’re going down, it’s just an indication that rate of growth has actually slowed down in the market. That said, there’s some positive news to be found.
