The telecom industry: an economic powerhouse?

• Author: Klouda, Nolan
• Position: ALASKA TRENDS

If you ask average people on the street what drives Alaska's economy, they probably won't hesitate to say oil, and they would be correct. Of course, the state has other areas of economic specialization, which include such classic Alaska categories as fisheries, mining, and tourism; however, another area of specialization is more surprising: the telecommunications industry.

One way to measure a state's economic specialties is an indicator known as a location quotient, or LQ. Economists calculate LQs by comparing employment in a given industry category within a state to the same category at the national level. An LQ of 1.0 means the same share of the workforce is employed in that sector as the national average; a figure of 2.0 means employment in the sector is double the national average. Oil and gas extraction, for instance, has an LQ of 9.75, meaning Alaska employment in this sub-sector is almost ten times higher than the United States as a whole. Air transportation sits at 5.97, while at the other end of the spectrum, machinery manufacturing barely registers with an LQ of 0.03 (figures based on 2014 data from the Bureau of Labor Statistics, Quarterly Census of Employment and Wages).

So where does telecommunications fall? Taken as a whole, the sector weighs in at a respectable 2.22, or more than twice the national average. By way of comparison, the figures for Wyoming and Vermont (the only two states with smaller populations than Alaska) are 1.02 and 0.67 respectively. As of 2014 (the most recent full-year data available from Bureau of Labor Statistics) the telecom sector employed 4,145...