On August 21st, Mouhcine Guettabi, Associate Professor of Economics at ISER, and Jonathan King, an Anchorage private business consultant, were interviewed by Lori Townsend on Alaska Insight*, Alaska Public Media’s weekly public affairs program. That program discussed how the COVID-19 pandemic is affecting the Alaska economy. Dr. Guettabi opened the discussion by explaining that employment in Alaska will probably not fully recover by 2022. Even if a vaccine is developed that ends the business closures and re-opens tourism by summer 2021, Dr. Guettabi projects that employment in the Alaska economy in 2022 will still be 5% below pre-pandemic levels. The two guests agreed that federal and state policymakers need to think of the pandemic as a 3- to 5-year challenge for the economy, and not simply a short-term disruption that requires only temporary fiscal support for a few months. The economy will not simply return to pre-pandemic levels once a vaccine is available.
In particular, Dr. Guettabi explained how crucial the enhanced unemployment benefits and the Paycheck Protection Program have been to limiting the negative economic consequences both for individual economic well-being and also for the overall economy during the first few months of the pandemic. The current uncertainty in Washington about how to extend those benefits is very worrisome. If the uncertainty about the federal willingness to sustain the economy triggers a serious retrenchment of consumer spending, the economic consequences for the US economy and for the Alaska economy could be severe.
By way of background, Dr. Guettabi published a report entitled “Alaska’s economy and the pandemic” in June 2020 that provides some details behind his projections.
*(The interview with Mouhcine and Jonathan begins at about 5 minutes and 30 seconds into the show.)
