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Senate committee focuses on employment
Job loss in Alaska’s oil and gas industry has been widely cited by those promoting Gov. Sean Parnell’s oil tax reduction bill. The premise behind the bill is that tax increases in 2006 and 2007 made Alaska less competitive for oil industry investment, reducing jobs in Alaska’s oil patch.
The Senate Labor and Commerce Committee, the first referral for House Bill 110 in that body, has focused its discussion on employment and Alaska hire issues.
HB 110 passed the House at the end of March; as of April 13, the committee had heard the bill twice, on both occasions taking testimony from Commissioner Click Bishop and economist Neal Fried of the Alaska Department of Labor and Workforce Development.
Bishop noted increasing employment on the North Slope beginning in 2006, when there was a significant spill on the North Slope, and said that some of the increase in numbers can be attributed to spill-related work.
Department numbers show that in 2005, North Slope Borough oil and gas industry employment stood at 5,191; that number rose to 6,295 in 2006 and has increased every year thereafter, to 8,429 in 2009, the last year for which NSB oil and gas employment figures are available.
Statewide, oil and gas industry employment has risen from 8,800 in 2000 to 12,800 in 2010 (preliminary figures).
Reports of job losses There have been numerous reports of decreases in North Slope oil and gas industry jobs since the passage of tax increases in 2006 and 2007, and Bishop said part of the reason there were job losses at some firms coupled with an overall employment rise is that firms doing pipeline and well related work have suffered. He cited one Fairbanks firm with a drop of more than 50 percent in employees from 2009 to 2010 and another reporting a 50 percent drop in employees in the same period.
Fried discussed unemployment claims for all oil industry jobs — separated into extraction, drilling support and operations support.
Unemployment claims increased from 1,561 in 2000 to 2,708 in 2009, and dropped in 2010 to 2,540. In the data Bishop and Fried presented, oil and gas industry unemployment claims hit a low of 904 in 2006 and then rose steadily through 2009.
Fried said both employment and unemployment claims increased and said part of the explanation was that employment numbers are annual averages. In 2009, he said, employment peaked at almost 13,500 in the first quarter, but by November had dropped by 1,500, with much of the increase in unemployment claimants coming at the end of the year.
The other thing that happened in 2009, Fried said, was that for the first time in 21 years the state’s overall employment dropped. And the job market changed — after a decade of employers concerned about finding enough workers, suddenly workers were concerned about finding a job, so if you lost your job in 2009 it was probably more difficult to be rehired.
By the first quarter of 2010 oil industry employment had recovered and the number of claimants dropped slightly in 2010, although across all industries in the state unemployment claimants rose from 2009 to 2010.
The nonresident issue The committee had a lot of questions about the percent of nonresident NSB oil and gas workers — 32.5 percent in 2000 and 35 percent in 2009, the most recent year for which nonresident figures are available.
Sen. Joe Paskvan, D-Fairbanks, said new hires broken out by resident and nonresident in the April issue of “Alaska Economic Trends” show 47.7 percent of new hires in the oil and gas industry in the third quarter of 2010 as nonresidents. He told Bishop that was troubling to him when people in his area aren’t working and asked if there weren’t competent experienced Alaskans who could do the work.
Bishop said he is working with employers on training and apprenticeship programs.
He noted that requiring Alaska hire has been found unconstitutional, but said he is pushing apprenticeship where it works and said while there are training gaps for jobs in the industry, the department is working on training.
Bishop said he is also meeting with companies on Alaska hire and training for their jobs in the state.
—Kristen Nelson
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