Investing for Alaska's Future

Much of the natural-resource development in Alaska happens in isolated, rural areas. Do local residents get jobs and other benefits from those developments? Mouhcine Guettabi, an assistant professor of economics at ISER, is assessing that question in two papers he is currently working on.

In the first paper, he is using employment by place of work and by place of residence to determine whether local residents of an isolated borough with oil development get a share of the new jobs created when oil prices spike up. In the second, he is looking at the causal effects of the Red Dog mine on employment, wages, and other measures in the Northwest Arctic Borough, where the mine has been operating since the 1980s.

Please join us at ISER to hear what he has found so far.

When: Friday, April 28, 12 to 1

Alaska lost nearly 2,300 jobs—about 1% of all wages and salary jobs— from March 2014 through March 2016. But not all areas of the state and sectors of the economy lost jobs. In a new paper, Mouhcine Guettabi, assistant professor of economics at ISER, examines jobs losses statewide and by area and economic sector. This is the first in a series of short papers that will examine various economic and fiscal issues important to Alaska.

Download the paper (PDF, 752KB). If you have questions, call the author at 907-786-5496 or email him at mguettabi@alaska.edu.

Are state workers better paid than their counterparts in private industry? That question is likely to come up more often, as the state deals with a huge budget shortfall. The answer is generally no, but there are exceptions for individual occupations.

That’s the main finding of ISER economists Mouhcine Guettabi and Matthew Berman, who did the research for the Alaska Department of Administration. They analyzed the question in two ways, using different data sources. Both analysts reached the same broad conclusion: state workers are not on average paid more, whether you include just wages, or total compensation—wages plus benefits.

To see highlights of the findings, download the summary, Who Has Better Pay and Benefits—Workers in State Government or Private Industry? (PDF, 759KB) For more detailed information, download the full report, Overpaid or Underpaid? Public Employee Compensation in the State of Alaska (PDF, 3.04MB). If you have questions, get in touch with Mouhcine Guettabi, assistant professor of economics, at 907-786-5496 or mguettabi@alaska.edu, or Matthew Berman, professor of economics, at 907-786-5426 or mdberman@alaska.edu.

To help Alaskans better understand the big budget problems the state government faces, Alaska Common Ground and ISER hosted a public forum on September 19. The forum introduced a new budget-balancing game, and it included a group of Alaskans presenting their own budget proposals, other Alaskans discussing potential economic effects of reduced state spending, and a panel of policymakers talking about factors that will influence future budget decisions.

Forum handouts
Alaska’s Fiscal Situation in Four Graphs (PDF, 484KB)

Brad Keithley's “Sustainable Budget Proposal” (PDF, 140KB)
Gary Wilken's “Everyone Helps a Little: A Five-Year Fiscal Plan” (PDF, 132KB)
John Havelock's “The Hat Trick” (PDF, 114KB)
Liz Medicine Crow's “Progress Will Come by Investing in Our Own” (PDF, 129KB)

Watch forum videos courtesy of 360 North and Alaska Public Media.

ISER and Alaska Common Ground are sponsoring a free public forum on Alaska’s fiscal and economic future on September 19. But in advance of that forum, Gunnar Knapp, ISER’s director, and Cliff Groh, the chair of Alaska Common Ground, talked at ISER, previewing some of the material they plan to present. They encouraged those at the talk to ask questions and offer suggestions for improvement.

Download the handouts (PDF, 341KB) from this lunchtime talk.

You are invited to join other Alaskans at a free public forum on Saturday, September 19, from 9 to 4, at UAA's Wendy Williamson Auditorium, for a conversation about the scale of fiscal and economic challenges the state faces and our options for dealing with them. It is co-sponsored by ISER, Alaska Common Ground, the Anchorage Public Library, and the League of Women Voters of Anchorage. Alaska Common Ground is a nonprofit organization that brings people together to talk about public policy issues.

The forum will include speakers and panelists, but those in the audience will also have the opportunity to vote on how they think the state can best move toward a healthy fiscal and economic future. Later we'll post more detailed information.

The state government's assets could generate enough earnings in fiscal year 2016 to pay the Permanent Fund dividend, boost the size of the Permanent Fund, and cut the expected General Fund deficit from $3.3 billion to just over $1 billion—which would still be a big fiscal challenge but much more manageable. That's the finding of a new analysis by Scott Goldsmith, professor emeritus of economics at ISER.

Those state assets consist of money in the Permanent Fund and other accounts as well as the value of state-owned petroleum still in the ground. Dr. Goldsmith estimates that after first paying the dividend and adding to the Permanent Fund, the state could put $2.2 billion in remaining earnings in the General Fund, which pays for public services. Right now the state uses only current petroleum revenues and smaller sources to cover General Fund spending—but those revenues are expected to fall $3.3 billion short of the estimated $5.5 billion in spending next year.

Read the analysis, The Path to a Fiscal Future: Use Earnings from All our Assets (PDF, 661.6KB). If you have questions, get in touch with Scott Goldsmith at osgoldsmith@alaska.edu or call 907-786-7720.

ISER publications are solely the work of individual authors and should be attributed to them, not to ISER, the University of Alaska Anchorage, or the research sponsors.

In early April, Northrim Bank made a grant of $100,000 to ISER for its ongoing research initiative, Investing for Alaska's Future. Northrim has now granted ISER a total of $1 million for this research, which is examining the importance of investment for building a strong Alaska economy. Scott Goldsmith, professor emeritus of economics at ISER, directs the initiative. See more about this announcement at the UAA Archive.