Facts Show Murkowski's Economic, Employment Progress
Ed Fisher, Deputy Commissioner
Alaska Department of LaborHow, exactly, has Alaska's economy improved since Frank Murkowski was elected Governor?
In the past few months, a handful of local writers have published opinion articles explaining their view of the state's economic performance since the Governor took office.
To provide a fair analysis of the progress Governor Murkowski has made, it is important to first understand the economic landscape he walked into when he took office in December 2002.
It is also important that any facts considered come from objective economists with a nationwide view, not from partisan writers set on criticizing, rather than offering their own creative solutions. The facts cited below come from the U.S. Department of Commerce's Bureau of Economic Analysis, and the department's Bureau of Labor Statistics.
On June 11, 2002 the Anchorage Daily News published an Associated Press article that began, "Alaska had the poorest performing economy among the states in 2000, the federal government reported Monday. The Alaska gross state product shrank by 2.9 percent that year, with Louisiana the only other state to lose ground, the Commerce Department said."
Additionally, the U.S. Department of Commerce reported that Alaska's economy contracted in real terms by $339 million in 2000. In 2001, the real total economic activity in Alaska shrank another $235 million. However, Alaska did improve from the absolute worst performing economy in the entire country in 2000, to only the 45th worst in 2001.
In the 1990s natural resource jobs - the highest paying in Alaska - declined sharply. Our economy was growing slower than the rest of the country, real wages were in decline, and a great state that once had the highest per capita income in the nation became simply average.
Jobs were created during the Knowles years. Government employment grew. And so did the number of low-paying, often part-time, service sector jobs.
In the eight years Tony Knowles was governor, one government job was created for every three in the private sector. In fact, the last two years Knowles was in office 6,400 new state and local government jobs were created, accounting for over half (57 percent) of the total 11,200 new jobs in that time. Some might quibble that many of those local jobs were simply reclassified tribal jobs, but that just further diminishes Knowles' claims of new job creation.
To compare, the federal government eliminated 300 jobs in the same time period.
By 2002, more than one of every four workers in Alaska's economy drew a paycheck directly from government. Bloated government resulted in persistent budget deficits fueled by draining billions of dollars from the State's savings accounts.
Alaska's economy declined during the Knowles administration. In real terms, Alaska's gross state product (GSP) declined from $26.4 billion in 1995 to $24.5 billion in 2001.
Alaska entered the decade paying higher salaries than the rest of the nation. Ten years later -- as high-paying jobs in timber and the oil patch disappeared -- that advantage was lost. According to a state Department of Labor report, the timber industry was "an economic casualty of the 1990s," losing more than 2,500 jobs.
When Governor Murkowski took office, Alaska's economy was in trouble.
The Governor and his Administration immediately went to work with the understanding that to put Alaska's economy in the right direction, growth must be in the private sector.
Determined efforts to control government spending, along with high oil prices, led to a balanced budget in 2002, and this year Alaska put $50 million back into its savings accounts.
In order to make sure Alaska's products can be accessed and compete in world markets, the Murkowski Administration has made improving the state's airports, roads and harbors a priority.
Results can be measured. In 2003, international trade grew 9 percent over the previous year, and the trend continues. The first six months of 2004 show exports increasing by 12 percent -- much of that in the sale of Alaska seafood. At the same time, the Federal Bureau of Economic Analysis reports that Alaska tied for the second-highest growth in personal income in the nation in the first quarter of 2004. Only Virginia was higher.
Looking at the economic benefits of North Slope oil - and soon, natural gas - it's hard to believe the tremendous opposition Alaska had to overcome to bring this energy to market.
Taking emotion out of the argument and focusing on the facts provides a much clearer picture of the significant progress being made by Frank Murkowski during his first term as Governor.