High cost of living in Alaska remains high despite lowered inflation

FAIRBANKS, Alaska (KTVF) - Over the last few years inflation has risen and the cost of living has increased for the nation. Alaska was no exception as prices rose sharply putting further stress on residents who already live in one of the most expensive places in the country.

While Alaska is known for its beauty, wide spaces and abundant opportunities, those desirable aspects come with a high cost. Much of that high cost is caused by the remote location of the 49th state.

While Alaska, “historically [has] been a very high cost location,” according to Dan Robinson, an economist with Alaska’s Dept. of Labor, between 2020 and 2022 the cost of living went up as prices rose sharply. Due to inflation during the COVID-19 pandemic, 2022 tied for the fifth most expensive year for cost of living in the last frontier.

Housing has been a big part of that increase, along with other expenses such as food and transportation. “It’s been an unusually kind of... rich or volatile years,” said Robinson. Due to that volatility, including supply chain issues, inflation in the state peaked in 2020 at 12.4%, now down to 3.1% as of April, 2023. According to Robinson, at the time, many economists though those impacts would only last as long as the pandemic itself. However, this turned out to not be true.

Comparing Alaska’s communities to the lower 48, Fairbanks’ cost of living was 23% higher than the national average, with Manhattan, New York among the most expensive locations and Harlingen, Texas among the least expensive.

For reference, Fairbanks, Anchorage, Kodiak, and Juneau all had a cost of living that was about equal to Portland, Oregon. All of those cities ranking between 18 and 22 of 265 communities that were compared for cost of living.

While it made up a smaller percentage of total expenditure, healthcare or “health spending” still has a staggering role in the high cost of living for Alaskans. “It’s interesting because housing, Fairbanks for example, your housing costs are almost average for the country, but healthcare costs almost twice as high,” Robinson said. Utilities contribute further, Fairbanks ranking highest in that category with costs again twice as high as the national average.

While the cost of living has gone down over the decades, Alaska still remains one of the most expensive places to live.

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