Economic report evaluates seasonal workforce impacts of COVID-19

The May issue of Alaska Economic Trends provides an update on COVID-19’s impact on employment in Alaska, taking a deep dive into the impacts on the seasonal workforce.

According to the report, from mid-March to the beginning of May over 70,000 people filed new claims for unemployment benefits. This is a dramatic surge compared to those same six weeks in 2019 when just 5,345 individuals filed new claims.

 

 

“That means roughly 65,000 people who normally would have been employed weren’t working by the end of April. For context, Alaska’s entire working-age population numbers around 500,000,” writes Dan Robinson, Research Chief for the Alaska Dept. of Labor and Workforce Development.

Recent numbers from the Dept. of Labor show that initial claims have declined in recent weeks, but that they are still at historically high levels.

 

 

Robinson notes that a key question is how long these individuals will be out of work since mandates that shut down many service-sector jobs are now relaxed.

He also notes that these numbers do not take into account the difference between layoffs and seasonal jobs that won’t exist this year.

In the report, economists Neal Fried and Karinne Wiebold reason that the timing of the pandemic will hit certain parts of Alaska’s economy – like those that rely on seasonal workers — particularly hard. Seasonal employment usually peaks in July and August in Alaska, and the virus hit when many employers were getting ready to train and hire their summer workers.

Alaska also faces a unique challenge in that close to 21% of the state’s annual workforce is made up of nonresidents. That percentage is much higher in some industries during the summer.

Seasonal employment swings are most dramatic in the seafood processing, tourism, and construction industries. For example, salmon fishing in July 2019 resulted in a seafood processing workforce of over 20,000 individuals, but by December it was down to under 3,000.

 

 

COVID-19 will hit the tourism industry particularly hard, predicts the report. Seafood processing and fish harvesting will also take a hit as the industry struggles to find enough workers. In the processing industry, nearly three-quarters of the workers are nonresidents.

Robinson also brings up large questions that remain about the pandemic’s impact on the oil and gas industry. Low prices, production cuts, and layoffs in the industry all contribute to an uncertain outlook.

“Because oil industry jobs pay so much and are scattered throughout the state, losses there disproportionately affect the state’s economy. That plus the lost revenue will make oil especially important to monitor in the coming months,” writes Robinson.

“Though not highly seasonal, oil and gas relies on workers from outside Alaska. About a third of the industry’s workers are nonresidents, and travel restrictions, quarantines, and the possibility of virus outbreaks in remote camps may compound trouble in an industry already hammered by low oil prices,” added Fried and Wiebold.

The Department of Labor will release the state’s newest unemployment data on Friday.