Action needed to address Alaska’s stagnant demographic trends, economist says

More people are leaving Alaska than coming, too few babies are being born to make up the population gap and the state workforce is withering. That presents a tough challenge that demands aggressive policy responses, a university economist argues.

“In 2010, essentially, Alaska stopped growing. That’s not the Alaska we all know,” said Ralph Townsend, an economics professor at the University of Alaska Anchorage.

Townsend, former head of UAA’s Institute of Social and Economic Research, has been making periodic presentations that call for changes to reverse the population stagnation. Topping his list of recommendations is investment in child care and education. He is frustrated at what he considers to be a lack of action to make that happen, even though there is wide consensus in favor of such investments.

“What amazes me is we can’t find a deal in here. We can’t get child care to the national or state agenda,” he said in an interview.

For four straight years, from 2017 to 2020, Alaska’s total population shrank. The only other periods of post-World War II population loss in Alaska, according to state data, were a single year after the completion of the Trans Alaska Pipeline System and a two-year stretch during the 1980s oil industry bust.

Oil prices slumped and the industry made cutbacks for a period starting in about 2015, but the ongoing population losses cannot be blamed on that, Townsend said, “The outmigration started before oil prices tanked,” he said.

The total population saw a slight blip up in 2021, about 0.1%, according to the Alaska Department of Labor. That is expected to be only a blip in an accelerating downward trend.

Birth rates have declined in almost every part of Alaska, and death rates have risen, making it more difficult for the state to offset outmigration, said Eric Sandberg, a demographer for the state Department of Labor.

“Death rates have been higher even without COVID because the population is getting older,” he said.

The continued outmigration has prompted state analysts to alter assumptions they are using to craft a new long-term population projection expected to be released in the next few weeks, Sandberg said.

Calculations used for the previous biannual forecast, released in 2020, assumed long-term net migration would average a negative 0.1%, with natural increases outweighing losses from people moving away, he said. Now, the calculations are based on a long-term net migration rate of negative 0.2%, he said. And that rate is much more modest than what the state has experienced in recent years.

“Basically, since about 2013 or so, it’s turned sharply negative,” Eric said.

In some ways, Alaska’s demographic patterns are like those in the rest of the nation – a flight from rural areas to certain cities, reduced birth rates and a more elderly population.

Since the start of the COVID-19 pandemic, some movement has been dramatic, in Alaska and elsewhere. The U.S. Census Bureau reports that in nearly three-quarters of U.S. counties, deaths outnumbered births in 2021.

However, Alaska has some population extremes, according to government statistics.

While the pandemic marked a period of outmigration for some of the nation’s largest cities, including New York and Los Angeles, Alaska had the most geographically widespread outmigration of any state from 2020 to 2021, with 80% of boroughs or census areas seeing more people move out than move in, according to the Census Bureau.

The rate of increase for the elderly population in Alaska far exceeds that for the nation as a whole, according to state statistics. Over the previous decade, the growth rate among elders aged 65 and over was higher in Alaska than in any other state, the Alaska Department of Labor 2019 population report said.

One region bucking the declining-population trend is the Matanuska-Susitna Borough. The population there grew by 20% from 2010 to 2020, according to the Census Bureau. That growth continued in the era of COVID-19, with another 3.4% increase from 2020 to 2021, according to the Census Bureau. But the Mat-Su growth is dominated by in-state migration, not by newcomers to Alaska, the state Department of Labor reports in the May issue of its Alaska Economic Trends magazine.

Townsend, in an April 18 presentation to the Anchorage Chamber of Commerce, credited that organization and other business groups for recognizing the need for child care and its importance to economic vitality.

But he bemoaned decisions in Alaska to back away from education investments. Such decisions include university budget cuts and Anchorage voters’ recent rejection of a school bond package.

“If you’re looking at attracting workers, that age group that you want to attract, 20 to 54, frequently has children in tow. And they care about schools,” he told the chamber.

Aside from those investments to help families, Townsend recommends reforms to make immigration easier and more seamless – Alaska relies on foreign workers, he noted – and an end to the oil-price “roller coaster” that triggers budget cuts.

Lifestyle amenities are unlikely to attract many remote workers to Alaska, he said. The timing of when people decide to relocate is driven by the desire to be closer to family and to the places where they grew up, which is not very applicable to highly mobile Alaska, he said.

“I don’t see the key driver for us being that we’re going to have people coming here and work on their computers,” he said.