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Juneau: Alaska's capital city faring well.


Juneau has a fairly diverse and thriving economy compared to many other places in Alaska. The economic system of Alaska's capital city is bolstered by a long natural resources legacy fueled in great part by mining and fishing. Juneau's role as a social services hub and its ample supply of steady government jobs help to keep the economy strong, said to Mali Abrahamson, an Alaska Department of Labor economist who focuses on Southeast Alaska. In fact, she says Juneau's abundance of local, State, federal and tribal jobs are an important part of what makes its economy so diverse. "Within government employment, there's such an array of occupations, from managing the PFD to being a deckhand on a boat," Abrahamson said.

The government is the largest employer for the city and borough of Juneau, representing more than 40 percent of jobs compared to 25 percent for government employment statewide. The impact of government employment is extremely significant for Juneau. "All of those workers have to buy goods and services, rent houses and send their kids to school," Abrahamson said. "That's really important for the demand in the local economy."

Employment in Juneau and the rest of Southeast Alaska took a hit in 2009. The city experienced a 3.4 percent decrease--627 jobs--in total employment almost exclusively in the private sector. The job loss wasn't as bad as in other parts of Alaska or other states because it was dampened by the strong government component. But Juneau's employment numbers rebounded between 2009 and 2010, growing by 404 jobs. Of those gains, 252 jobs were in the private sector.

This year, it was a different story, according to Brian Holst, executive director of the Juneau Economic Development Council (JEDC). "We don't have full numbers for 2011 yet, but we anticipate that government employment will be relatively flat," he said in an Oct. 25 interview.

Holst feels the stability of the government sector is critical to Juneau's economy staying vibrant. But having relatively flat government employment is positive for the local economy. Overall, it's been a good year for Juneau's economy relative to the last few years. "Juneau, like much of Alaska has fared well during the national recession," Holst said. "We see that the population is up, total payroll is up, housing starts are up and home values are increasing."


Holst says the mining industry is an absolute bright spot on Juneau's economy. Hecla Greens Creek Mining Co., for instance, is the city's largest private-sector employer. It directly employs 350 people, spending more than $42 million in pay and benefits, according to Human Resources and Community Relations Manager Ron Plantz. In 2010, Greens Creek accounted for $315 million in sales and $111 million in operating, capital and exploration costs. It paid local property taxes in excess of $1.3 million.

As a recent development, Greens Creek has started National Environmental Policy Act (NEPA) permitting work on long-term tailings capacity options to sustain both the current life-of-mine plan and production well into the future, according to Plantz. The Environmental Impact Statement (EIS) scoping process began in October 2010 and informed stakeholders about the proposed project, preliminary issues and preliminary alternatives. It also asked for public input on the topics and issues the scientists and engineers should focus on when writing to inform stakeholders. "That process continues to advance under the administration of the U.S. Forest Service, with the release of a draft EIS scheduled for the end of 2011," Plantz said.

The Kensington Gold Mine, which opened June 2010 about 45 miles north of Juneau last year, employs about 200 permanent, year-round workers as well as contract employees. The mine's owner, Coeur d'Alene Mines Corp., expects to produce an average of 125,000 ounces of gold annually over Kensington's initial 12.5 year life. Coeur Alaska has vowed to work closely with Berners Bay Consortium--consisting of Klukwan, Inc., Kake Tribal and Goldbelt Native corporations--on job training and supporting local and Native hire at Kensington.

The effect of Juneau's thriving mining industry goes well beyond the creation of jobs; it extends to higher average wages. The mining industry's average annual wage exceeded $90,000 in 2010, Holst said. That's significantly more than what highly paid, federal government workers make--and double the average wage of Juneau employees.

Abrahamson says the opening of the new Kensington Gold Mine has definitely put a "bump" in the natural resources industry as far as wages and employment goes. In 2010 alone, it increased Juneau's total employment by about 100. Together, the jobs generated by the Kensington and Greens Creek mines also have an invisible effect on other industries, as companies spend money to feed and transport their workers.

The presence of Juneau's mines is also impacting institutions of higher learning. For instance, University of Alaska Southeast (UAS) has purchased an underground hard rock mine training simulator to educate its students. More than 700 students are currently enrolled in mining classes at UAS.

The new state-of-the-art mine simulator, which features three modules for training on different pieces of mining equipment, will provide a dramatic increase in training capacity to prepare individuals for entry-level hard-rock mining jobs in Alaska, according to UAS. "This was the missing piece of the puzzle for training miners from Alaska to be productive and safe from the first day on the job," stated Dennis Steffy, director of the University of Alaska's Mining and Petroleum Training Services in a March 17 media release. "It will vastly improve the opportunities of students for mining employment. In addition, salaries will stay in Alaska instead of going to other western states."

The simulator can replicate the mine environment with visual displays and mapping of the underground terrain. It will be housed at the UAS Center for Mine Training, located at Juneau's UAS Technical Education Center. The simulator should be in place and operational by the last week in December, according to Mike Bell, the director of the Center for Mine Training. "We're excited and looking forward to it," he said.

In addition to the mining sector, Juneau's seafood industry also saw improvement this year. Holst says the industry is faring well because of the rising prices of seafood on the market. He expects 2011 to be a strong year for the seafood industry.


But the tourism industry, which is a major driver of Juneau's economy, appears to be relatively flat this year. Although the city has hosted about the same number of cruise ship passengers this year than in 2010, Holst says he expects the year to end with an uptick in independent visitors. Next year, he anticipates seeing a 10 percent increase in the number of Juneau's cruise ships passengers.

Like many places in the state, Juneau's population is growing. According to Abrahamson, the 2010 census marks the third year of population recovery for Juneau, as the number of births and deaths has remained typical, but fewer people have moved out of Juneau. Its population--currently 31,275--has grown 2 percent since the 2000 census.

Abrahamson also notes that Juneau's residents tend to be older, more educated and earn more than the average Alaskan. The higher earnings are understandable, given the city's greater concentration of higher-paying government-jobs. But it's not as easy to explain the age demographic. Contributing factors could be the city's lower birth rate, lower net migration and higher concentration of mature workers. "We have a lot of people that are nearing retirement age in our work force, which raises the median age," she said. "It raises some interesting questions about where we're going to find replacements for these retiring workers."

The city's segment of mature workers is having a peculiar effect on wages. Salaries are growing with the older workers, who typically earn more. This is causing wages to increase overall without jobs necessarily increasing.

Holst says Juneau is attractive to seniors because it's a comfortable place to age. The city's health care facilities continue to improve, plus it has a very positive tax policy toward older residents. Juneau exempts seniors from paying property tax on the first $150,000 of the assessed value of their home. Also, individuals who are 65 and older and have lived in the city for at least 30 days don't have to pay the sales tax, which is currently at 5 percent.


Juneau residents enjoy a high quality of life, Holst says. The city, which is about 600 air miles southeast of Anchorage, is located in the beautiful Tongass National Forest. It's a cosmopolitan place bursting with small-town appeal, natural wonders and opportunities for outdoor recreation. In fact, Juneau is listed as one of U.S. News' Best Places to Retire.

But like many communities in Alaska, Juneau is facing a number of challenges, such as a higher cost of living, higher housing prices and scarcity of affordable housing. There simply isn't enough housing available to purchase or rent, which has resulted in lower vacancy rates than elsewhere in the region, state and nation. Holst said: "Using a 5 percent vacancy rate to reflect a balanced and healthy market, Juneau would need more than 300 more housing units for us to have a 5 percent vacancy threshold."

However, Juneau has a number of projects in the work to improve its infrastructure. Projects include a renovation to one of the elementary schools, a new U.S. Forest Service laboratory and a runway extension at the city's airport. Recently, the city broke ground on a new Library Archives and Museum. In addition, the Sealaska Heritage Institute is moving forward with plans to construct a new Native cultural center downtown at the corner of Front and Seward streets. The center promises to be an exciting addition to the city, as it will advance the study and preservation of Alaska Native history, culture art and language.
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Title Annotation:Towns in Transition
Comment:Juneau: Alaska's capital city faring well.(Towns in Transition)
Author:Barbour, Tracy
Publication:Alaska Business Monthly
Article Type:Statistical data
Geographic Code:1U9AK
Date:Dec 1, 2011
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