DOL: Recovery may take several years

Government, oil will cut jobs for short term, other industries will begin to rebound

In the wake of a long statewide recession, followed by a year of weak growth in the midst of a raging pandemic, state labor officials see a light at the end of the economic tunnel, but it’s going to take a while to get there.

It will likely take several years to regain 2019 job levels, writes economist Karinne Wiebold in the January issue of Alaska Economic Trends, the monthly publication of the Alaska Department of Labor.

Government and oil industry employers will continue to cut jobs in the short term, while all other industries hold steady or begin to rebound, Wiebold writes. Industries likely to grow the most in 2021 will be those that suffered the most in 2020, she said. That would include the leisure and hospitality industries, who lost some 9,600 jobs when the tourist season never materialized. The forecast is for those industries to gain some 3,500 jobs this year. The transportation, warehousing and utilities sector of the economy, which lost some 3,600 jobs, meanwhile might recoup just under half of them in 2021, she said.

Other challenges include unresolved long term state budget and revenue issues and industry forecasts of oil prices in the mid-$40s per barrel, and a population drop since 2017 which has also impacted the economy.

“The pandemic isn’t over, and the timing and success of widespread vaccination will be a major determinant of 2021’s course,” Wiebold said.

Many schools remain closed and the tourism season for 2021 remains unpredictable, as questions remain about how hungry people are for travel, including on cruise ships. Public health experts are predicting COVID-19 vaccines will be available to all adults by June or July.


The state lost over 15,000 oil and gas jobs in 2014 before the four-year decline that reduced that industry’s job count to 9,300 in mid 2018. Job numbers rose to about 10,000 in early 2020 before the pandemic arrived in Alaska, driving industry jobs down below 7,000. Meanwhile BP, a major force in Alaska’s oil and gas industry, sold its assets in 2020 to Hilcorp, which has a smaller workforce, leading to more job losses.

On the plus side, Conoco Phillips plans to bring several rigs back online in 2021, after suspending all drilling in 2020.

State labor economists expect the tourism industry to recover some 3,500 jobs in 2021, about 40 percent of what was lost in 2020, but the question is how many businesses can hold on under the pandemic ends and tourism resumes at its previous pace.

Retail firms remain on a long slide, as online shopping demand increases and technical innovations including self-checkout will result in less of a need for workers, the forecast noted.

On the bright side, Wiebold said, mining, oil and gas, tourism and the strategic location for military operations and transportation will continue to attract business, a vital segment in the state’s economic recovery.

“It may take a couple of years for visitor numbers to return to pre-COVID levels, and some tourists’ preferences may change, but Alaska will continue to draw visitors,” she said.