Alaska’s Economic Landscape AGFOA Fall Conference November, 16th, 2015 Alaska Department of Labor and Workforce Development, Research Section, Neal Fried, Economist The rise of coffee shops in AK

Alaska economy tepid, but not in recession yet, economists say Jeannette Lee Falsey, June Is Alaska's economy in a recession? With oil prices low for more than a year and resulting state budget cuts, it's a question on the minds of many Alaskans.state budget cuts Related: One, Gregg Erickson, declared in a recent report commissioned by the Alaska Mental Health Trust Authority titled "The Great Alaska Recession" that the state is in the midst of a "major" recession. But in a phone interview with the Alaska Dispatch News, Erickson appeared to change his mind. "The numbers don't say we're in a great recession," Erickson said. "Maybe we should have couched these conclusions in less dramatic language." Other Alaska economists agree there's no recession. Not yet, anyway. But at the state level, the data for most of those indicators are less accurate or harder to measure -- or they don't reflect the true health of the Alaska economy. "We don’t have those more sensitive national numbers and even with them they often get it wrong," said Neal Fried, an economist at the state Department of Labor.

Alaska’s Oil Production And Population Peak: 2.05 million barrels in 1988 Low: 525,000 barrels Population: 736,000 Population: 411,600 in 1978 Brought to you by Mark Edwards from Nothrim Bank

This year’s projected deficit is huge. FY15 unrestricted general fund spending $5.9 billion $3.4 billion (57% of spending) $2.6 billion Projected deficit Projected revenues $8,000 per Alaskan $4,500 per Alaskan $3,500 per Alaskan

We pay much lower state taxes than residents of any other state. But we would have to pay much higher taxes to close our deficit of $4500 per Alaskan. Alaska

The 1980’s and Now Similarities Oil prices fall Oil revenues fall Economy remains very dependent on oil Differences-Good Not preceded by economic and population boom Problem is not a surprise Have savings this time Have more control this time More economic diversity, a larger service sector, Native Corps. Much lower interest rates Tax Reform Act of 1986? Differences-Bad Much less oil production Falling federal funds and military? Still not sure if better, worse or just different? Too early to tell.

Median age=26, 3%>65 AGEAGE 1980

2014 AGE Women Men Baby Boomers Millennial s Gen Z? iGen? Median age=34, 10%>65

727 landing draws crowd

But Laurence C. Smith warms right to it in “The World in 2050: Four Forces Shaping Civilization’s Northern Future” (Plume, 2010). He’s a professor of earth, planetary, and space sciences at UCLA, and used model projections and data to form his main thesis: Countries north of the equator will grow ever more powerful, while countries to the south will vie for survival. Indeed, boomtowns will pop up in Alaska, Canada, Greenland, Russia and Scandinavia. As the permafrost melts, we’ll build roads, bringing construction jobs and a real estate rush. Forecasting the future Tuesday, January 27, 2015

“Work is about a search for daily meaning as well as daily bread.” Studs Terkel

Troop cuts at Joint Base Elmendorf-Richardson on hold

At What Age Do People Move In And Out Of Alaska ? Net migration (people moving in minus people moving out) Age College exodus, etc. Military, other work,etc. Retirement,etc.