Support Industry is defined as industries that serve consumers. These industries include trade, finance, and miscellaneous manufacturing for the Alaska market.
In 1996, 28% of the 307,000 Alaska jobs were in basic industries. This is significantly low compared to 63% of the same basic 94,000 jobs in 1961. The difference is due to the increase of support jobs that leaped to 42%. The support employment grew as the population and income of Alaskans became more stable.
Although service jobs tend to pay low, non-business services will continue to grow as Americans have more disposable income to avail support services.
State and Local Government Industry
In most countries, state and local governments are often included in the support sector but in Alaska, it is considered separately because they are such a large part of the economy and because they depend so much on petroleum revenues.
State and local governments added 20 percent of new jobs since 1961, as the population grew, new state services were added. Jobs in health, education, arts, and transportation were created as new local governments and school districts were formed. The military has been supporting Alaska’s economy since World War II. Today, even with numbers of military personnel at about half their 1960 levels, the military remains the largest single employer. Department of Defense spending remains critical to Alaska’s economy.
However, with the dependency on the oil and gas industry, it likely will mean fewer jobs in the future due to lower oil revenue.
Alaska’s current economy
Despite the recession Alaska experienced in recent times, most economic experts during the beginning of the year cautiously predict that 2020 will turn the corner for the Last Frontier. However, as the world is being hit by Coronavirus, Alaska is not spared.
Even with the lowest confirmed cases in the U.S., economically Alaska may be at the virus’ mercy.
Having tourism and oil and gas as major pillars of its economy, Alaska is expected to be greatly impacted by the pandemic.
As a result of government’s travel restrictions and health warnings, it is expected that the number of tourists will plunge in the coming weeks and months.
True that travelers planning a trip to Alaska this summer can reschedule for another year, still, regions dependent on seasonal tourism can’t simply wait for another season to recoup their losses. Small businesses heavily dependent on tourism during the busy summer season will have catastrophic damages due to Coronavirus.
The oil and gas industry faces a tough 2020 with declining demand and prices. With social distancing and lockdowns implemented in almost all nations, planes and cars are now grounded (which hits oil demand). As offices, restaurants, factories, and other businesses that require power generation closed, the oil and gas energy demand greatly declined in many countries.
To prevent further loss, North Slope operators have announced spending cuts and delayed drilling in the Kuparuk River and Alpine fields. Many are adjusting shifts to minimize travel, extending the stay of employees in remote locations.
Current Alaska governor, Mike Dunleavy, set some measures in place to provide economic support to Alaskans during the Coronavirus outbreak. The state has also created additional resources for Alaskans who lost their jobs and business owners affected by closures to apply for unemployment through the state’s website.