Alaska and Pacific Northwest closely linked: 'Ties that Bind' details economic connection.

Author:White, Rindi
Position:SPECIAL SECTION: Pacific Northwest
 
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Puget Sound could rebrand itself as the gateway to Alaska. Whether it's a box of cereal, new bridge beams, or a vanload of visiting relatives, chances are they've all passed through Seattle, Tacoma, or another Puget Sound community on their journey to the Last Frontier.

The two regions are closely linked and have been for generations. Gold miners provisioned in Washington before heading north to strike a claim in Alaska and timber from this state has for generations been shipped to Washington markets. Almost all of Alaska's oil is refined in Puget Sound, and nearly a thousand Puget Sound-owned fishing vessels participate in Alaska commercial fisheries each year.

The Chambers of Commerce of Alaska and Seattle have long recognized this important economic connection and, for the past thirty years, have commissioned regular studies of the impact Alaska has on the Puget Sound region in order to better characterize the relationship.

"We use this to bolster our advocacy efforts, advocating for policies which are pro-business, whether in Juneau or Washington or Washington, D.C.," says Rachael Petro, president of the Alaska Chamber of Commerce. "It underscores how important the economic ties are for us."

Juneau-based consulting firm McDowell Group in February completed the fourth update of the report, each of which has been titled "Ties that Bind." The $50,000 update was sponsored by a long list of businesses, including: Alaska Airlines; Lynden; the ports of Seattle and Tacoma; Shell Oil Company; Totem Ocean Trailer Express; Alaska Oil & Gas Association; Banner Bank; Foss Maritime Company; GCI ConnectMD; Jones Stevedoring Company; Alaska Railroad; At-Sea Processors Association; Manson Construction; the Port of Anchorage; Schnitzer; The Wilson Agency/Albers & Company, Inc.; Transportation Institute; US Bank; Alaska Salmon Alliance; Fifth Third Bank; and Nexus Northwest.

The list of sponsors reflects the broad interest and support for those Alaska and Puget Sound connections, McDowell principal Susan Bell says. Part of the mission of the report was to present the information widely, she says, and her company has worked to do so. Presentations have been made at the Fairbanks, Anchorage, and Juneau chambers of commerce, as well as at the Seattle and Tacoma/Pierce County chambers and at smaller groups such as the Seattle-based Propeller Club, which is a maritime industry support agency.

Bell and others also presented the report in Washington D.C. at the thirtieth annual "Washington to Washington" conference, a gathering of business leaders, community members, and elected officials from Pierce County, Washington, in the nation's capital. The Washingtonians meet with federal agencies, Congressional members, and others.

"It was a nice great to share the information at that forum. Especially at the federal level,, it helps to have a broader message and a broad base of support. This report helps people understand who their allies are across industries and geographic borders," Bell says.

Economies Linked for Generations

Business owners in the Pacific Northwest have long recognized the important ties between the two regions. Eric Schinfeld, chief of staff and executive vice president of the Seattle Metro Chamber of Commerce, says when the Seattle Chamber was formed more than 130 years ago, one of its first activities was hosting an Alaska business forum.

Likewise, the Alaska Chamber holds five of its board seats open for Puget Sound members. It's done so since the group was founded in 1952, prior to statehood.

"They had the foresight and understood [the connections]," Petro says. "The more things change, the more they stay the same."

Consider this: for every four jobs in Alaska, there's an Alaska-related job in Puget Sound. That's 113,000 jobs in six counties in Washington State, which are directly or indirectly linked to Alaska. It might be dockworkers loading Alaska-bound goods on container ships or a flight crew flying daily trips to Alaska, or it could be a Seattle-based company benefiting from Alaska-based business travelers heading to the Puget Sound region to attend business conferences, meet with Washington-based coworkers, or for other reasons.

Over the thirty years the Seattle Metro Chamber has been tracking the regional economic impacts, the number of direct and indirect Alaska-related jobs in the Puget Sound region has nearly doubled from fifty-seven thousand jobs in 1985.

Petro says the ties are obvious to most Alaskans, like they are within her own family. She hails from Puget Sound originally. Long before Alaska became a territory, her family operated canneries, processing Alaska fish. She's the first member of her family (that she knows of) to actually live in Alaska, she says, but the connection runs deep.

Schinteld says most Puget Sound residents are likewise aware of the economic connections between the two regions, but it might not be the first thing that comes to mind when they think about businesses that are key to the Puget Sound economy.

"The business between Puget Sound and Alaska is huge, but I think that, for whatever reason, it is very invisible to the average person. We certainly know that international trade is a big portion of our business, we see our ports out there, but we don't realize that trade with Alaska is just as important as international," he says.

According to the report, 57 percent of Puget Sound businesses with ties to Alaska say they expect their Alaska-related activities or sales to become more important to their bottom line.

Puget Sound, a region with about 4.2 million residents, boasts a diverse and vibrant economy, the report states. Its annual total output in 2013 was $475 billion, "larger than most of the world's national economies." Boeing and Microsoft, with seventy thousand and forty thousand employees respectively, are the region's largest employers, but the area is also home to numerous other Fortune 500 companies, including Alaska Air Group, Amazon, Costco, Nordstrom, Starbucks, and Weyerhauser.

By contrast, the Alaska economy has an economic output of about $75 billion and about 735,000 residents. The annual output is driven mostly by oil production, "but the seafood industry, tourism, mining, the military, and other federal government are key drivers of the state's economy," the report states. Alaska represents about 60 percent of all domestic US seafood production by volume and, although it previously accounted for about a quarter of US oil production, today Alaska's share is less than 10 percent of the whole.

According to the report, the value of exports to Alaska from Puget Sound was estimated at nearly $3.8 billion in 2003. In 2013, that number was $5.4 billion, a 44 percent increase, or 12 percent when the rise is adjusted for inflation.

The report estimates Alaska accounted for about 74,000 export-related jobs in Puget Sound in 2013 and $3.8 billion in labor earnings, about 16 percent more than estimated in 2003. In the seafood industry, it estimates 24,000 Alaska-linked Puget Sound jobs and $1.3 billion in labor earnings. The report estimates about 12,000 more Alaska-connected jobs in the petroleum industry, and 3,400 Alaska-linked jobs in the cruise ship industry in 2013.

The total labor earnings of the Alaska-linked direct and indirect jobs were $6.2 billion, up from $4.3 billion in 2003, a 16 percent rise after adjusting for inflation.

Petro, with the Alaska chamber, says one of the most encouraging aspects of the report is that, despite the changing and growing economy in Puget Sound, Alaska continues to have a significant impact on the region's economy.

"Their economy ... originated with some of the industries that still thrive in Alaska, but let's be real, Microsoft and Boeing are kind of big deals in Washington state. It's easier for politicians and elected officials to make decisions that benefit their...

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