Resource extraction and the economy: higher paying jobs have big impact.

AuthorWhite, Rindi
PositionSPECIAL SECTION: Resource Development

Alaska is a resource development state, purchased because of its resource potential and populated largely due to resource-development jobs. Although only about four percent of the state's jobs are actually in the oil and gas industry, most state residents would not be here if it weren't for drilling and mining activities.

A June 2013 Alaska Economic Trends article highlighted how vital resource extraction jobs are to the state: "In 2012, Alaskans benefitted from nearly $9 billion in oil and gas tax revenue--more than $12,000 for every man, woman, and child living in Alaska. Because the industry provides 89 percent of state general funds, without oil and gas the Alaska of today wouldn't exist," Alaska Department of Labor Commissioner Dianne Blumer states in the magazine.

Big Impact, Not So Many Jobs?

Big impact to the economy from tax revenue is significant, but the size of the job pool isn't so huge. Four percent of the state's workforce, or about 14,100 employees, work in the oil and gas industry, according to the state Department of Labor Research and Analysis division.

Add another roughly 3,000 jobs from the mining industry and it adds up to about the same number of employees as work for the top five largest Alaska employers--Providence, Wal-Mart, Carrs/ Safeway, Fred Meyer, and ASRC Energy Services, according to the most recent compiled data from the state.

The job count doesn't include support services jobs--think security, food, lodging, and pipeline transportation, Blumer writes--which make the oil and gas industry run smoothly. After all, where would the Kuparuk oil field, for example, be without a cafeteria or without fuel providers to fill up airplanes that carry workers to and from the field?

With those jobs factored in, according to a recent study by UAA's Institute for Social and Economic Research, the oil and gas industry is directly responsible for about 31 percent of all jobs in the state. ]he federal government is the only industry sector that is larger--it's responsible for about 35 percent of the jobs in the state.

But, as Alaska Department of Labor economist Neal Fried pointed out in the June 2013 edition of Trends, the impact of resource extraction jobs is much more broad.

"Because average earnings in the oil industry are more than two and a half times the average for all Alaska industries, its payroll impact is more pronounced," Fried writes.

According to Fried, the average oil and gas job paid $127,148 in 2012, 354...

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