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Alaskanomics's Blog The Federal Shutdown and Alaska's Economy

As the US enters week three of the federal government shutdown, people are beginning to wonder how the Alaska’s economy will be affected. Nearly 5% of workers in Alaska are federal employees. Only Maryland and Hawaii have a higher percentage in their work forces. The majority of federal employees in Alaska are members of the military or work for the Department of Defense (DOD). The military was not furloughed during this shutdown and DOD employees were called back to work last Monday. The Department of the Interior has the 2nd highest number of federal employees in the state. Those workers are still furloughed due to the shutdown.

One area that will be hard hit from the shutdown is crabbing. Today was to be the official start of the season, but very few boats are in the Bering Sea right now. Each crab fisherman is required to hold official permits, but these are not being issued because the officials who issue the permits are currently furloughed. Every day that the fishermen are not able to be in the water, they are losing about $1,000. The retailers that sell crab will be hard hit because they typically require the product in their stores by mid-November to be able to fill the holiday orders. “Overall, we’re looking at if it drags on long enough, it’s going to be a 20 to 25 percent decrease in the price paid, not to mention the cost and bills the vessels are racking up, sitting there tied to the dock,” said Mark Gleason, director of the Alaska Bering Sea Crabbers in an interview with KTUU.

Another related industry that is being hurt by the shutdown is the fishing industry that calls the Kenai National Wildlife Refuge home. Area guides are losing money each day that they are not able to access the waters within the Refuge. The boat launches are all closed and guide permits are on hold due to the shutdown. The guides aren’t willing to risk their future permits by fishing in the closed areas, even with the great weather that has been seen in Southcentral Alaska this fall. Hunting trips that access federal lands are also being put on hold until after the shutdown.

It is hard to calculate exactly how the shutdown will affect the Alaska economy, but the longer the shutdown lasts, the harder it will be for industries that rely on federal officials and are on federal land to recover the money lost during the shutdown.

Alaskanomics

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