A leading Alaska economics firm predicts our recession will continue for three more years and foresees no real recovery, just decline and then a future with a smaller economy.
Jonathan King, vice president of Northern Economics, said he feels like he is riding a down-bound train, able to see hard times for his business a year ahead but unable to do anything about it. We visited to look down the track together and think about what is coming for his and others' families.
King presented Wednesday to the Senate Labor and Commerce Committee after Mouhcine Guettabi, of the Institute of Social and Economic Research of the University of Alaska Anchorage. The economists' teams worked independently, using different computer models, but they came to strikingly similar conclusions.
"This is our great recession. By the time this is over, we expect to lose 6 percent of our jobs," King told the committee.
A recession is unfolding of similar severity to what the nation endured after the 2008 financial crisis, but with a critical difference, King said. The U.S. economy recovered. He expects Alaska's economy to shrink long term to a smaller base.
At oil going for less than $54 a barrel, and no real hope that it will go any higher, there is just not enough profit in opening new fields in Alaska for drilling. (So yes Senators Murkowski and Sullivan, that means opening ANWR does nothing to save us.)
With oil off the table as the quick fix Alaska had relied on, there is really no other fallback industry which will help Alaska get back on its feet in the immediate future.
However King did offer this one possibility:
"We're one tweet away from $100 a barrel oil," King said. "All it takes is a shooting war in the Middle East and we're back in business. Which I hate to say."
Well there's a happy thought.
Personally I am fortunate to be in a recession proof job, however I know that a recession will still have an effect on all of our lives.
So for all of you considering a move to the Last Frontier, I would suggest that you alter your plans immediately. Because simply put, we can't afford you.