Alaskans have faced a decline in personal income for over a decade
FAIRBANKS, Alaska (KTVF) - Alaska has been seeing a reduction in per-capita income for decades. This impact has resulted in less purchasing power for Alaskans and a narrowed margin for personal income compared to the national average.
Per-capita income is the average amount of income made by an individual in a given area. It’s an strong indicator of the economic health for the area being examined.
“We peaked out in personal income, compared to the rest of the country back in the 70s and 80s,” said Neal Fried, an economist with the Alaska Department of Labor. “I think we once peaked at 75 percent above the national average.”
After the boom, Alaska saw an increase of economic development during the 1990s as fields such as healthcare and hospitality expanded operations and increased employment. However, those developments lead to an increase of lower wages in the job market severely lowering the state wide personal income statistics. By 2010 per-capita income for Alaska was nearly 20% higher than the national average. Within the last few years, the income gap between Alaska and the national average dramatically dropped. “The American economy has just been way out performing the Alaskan economy,” said Fried.
During the last 12 years Alaska has endured decreases in employment and population. Another reason for the decrease to personal income is related to the timing of various recessions. While the United States faced a major recession which began in 2008, Alaska avoided major losses. But, as the lower 48 recovered, Alaska would face two internal recessions. Many markets in Alaska took a big hit including the oil industry.
While those losses had a huge impact on the state, the increase of economic variation created in the 1990s helped reduce the blow. As the state developed more year round jobs at the turn of the century, the state was able to avoid large disparities in income. “In fact, the last couple of times I looked, we either had the least or second or third least amount of disparity,” said Fried.
Even though disparity remains low, communities across the state can vary widely regarding per-capita income. The two communities in Alaska with the highest per-capita income are the Bristol Bay and the Denali Boroughs. Both communities have a per-capita income of over $100,000 with the Bristol Bay Borough having the highest per-capita income at $155,155. This is primarily due to the area having an older population that holds year round jobs at managerial levels.
Alaska’s lowest paid community is the Kusilvak Census Area. Per-capita income was only recorded to be $36,753. The attribution to the low figures stems from an opposite of Bristol Bay. Primarily the existence of a younger population.
Most communities in Alaska have a per-capita income near the statewide average of $65,813. Much of that being due to populations with stable year round jobs and diverse wages.
While Alaska has faced a downward trend for personal income for over a decade, 2022 was an exception. “We got this, one of the largest PFD’s ever,” said Fried. The huge financial boost from the state resulted in the first positive year for Alaska in a long time, not only because the Permanent Fund Dividend was so large, but also because it goes out to every man, women and child resident that applies for it. This added a lot of money for younger Alaskan’s income during 2022.
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