Economy of Alaska facts for kids
The Trans-Alaska Pipeline transports oil, Alaska's most important export, from the North Slope to Valdez.
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|
| Statistics | |
|---|---|
| GDP | $63,618,000,000 |
|
GDP per capita
|
$68,919 |
|
Population below poverty line
|
15.7% |
| .4492 ± 0.0118 (2023) | |
|
Labor force
|
364,209 |
| Unemployment | 3.8% |
| Public finances | |
| Revenues | 4,517,927,000 |
| Expenses | 5,437,000,000 |
Alaska's economy is like a big puzzle with many important pieces. In 2011, the total value of goods and services produced in Alaska, called its Gross Domestic Product (GDP), was about $51.1 billion. It grew a bit to $52.9 billion in 2012 but then dipped to $51.5 billion in 2013. This small drop happened because less oil and gas were produced.
An expert named Scott Goldsmith described Alaska's economy as a "three-legged stool." This means it relies on three main parts:
- The first leg is the oil and gas industry.
- The second leg is the federal government (the U.S. government).
- The third leg includes all other businesses and services.
These three parts create many jobs. For example, between 2004 and 2006, the federal government provided 135,000 jobs, the oil industry provided 110,000 jobs, and other businesses provided 122,000 jobs.
After oil and natural gas, Alaska's biggest export is seafood. This includes salmon, cod, pollock, and crab. In 2013, Alaskan fishers caught 5.8 billion pounds of seafood, worth about $1.9 billion.
Farming is a very small part of Alaska's economy. Most farms grow food for people living in the state, like vegetables and dairy products. Many other goods are brought in from outside Alaska.
Most jobs in Alaska are in government, getting natural resources (like oil or minerals), shipping, and transportation. Military bases also provide many jobs in cities like Fairbanks and Anchorage. Money from the federal government helps Alaska keep its taxes low.
Alaska produces crude oil, natural gas, coal, gold, and other metals. It also processes seafood and makes some wood products. The tourism industry is growing, bringing many visitors and supporting local hotels and businesses.
Contents
History
Alaska's first factory for canning salmon opened in 1878. This helped sell fish to more places.
Economic Sectors
Energy Resources
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Alaska has huge amounts of energy resources. Large reserves of oil and natural gas are found in areas like the Alaska North Slope. Alaska is one of the top states in the U.S. for crude oil production. Prudhoe Bay, on the North Slope, is a very productive oil field.
The Trans-Alaska Pipeline is a giant pipeline that can move a lot of crude oil every day. It's one of the biggest oil pipelines in the United States. Alaska also has a lot of coal. Experts believe there are also huge amounts of natural gas trapped in ice formations on the North Slope.
Many rivers in Alaska could be used to create hydroelectric power. The long coastline also has potential for wind and geothermal energy.
Alaskans often rely on diesel fuel for heating, transportation, and electricity. This fuel can be expensive. While Alaska has a lot of wind and water power, building new energy systems has been costly due to long distances and small populations. Gasoline prices in Alaskan cities are usually higher than the national average. Prices in remote areas can be much higher.
In 2012, Alaska produced 8.1% of America's crude oil. This placed it behind Texas, North Dakota, and California.
Today, people are looking into new, clean energy sources for Alaska. These include offshore wind farms, geothermal power, tidal power, and green hydrogen.
Mining for Resources
Alaska is known for mining valuable resources like gold.
Tourism in Alaska
Tourism is a very important industry in Alaska. It creates many jobs, about one out of every eight jobs in the state. Nearly 2 million visitors come to Alaska each year, spending over $2.4 billion.
Many visitors arrive by cruise ship. Major cruise lines bring people to see Alaska's beautiful coasts. Others fly into the Ted Stevens Anchorage International Airport, drive along the Alaska Highway, or take the Alaska Marine Highway ferries.
Alaska's Governor Bill Walker once said that tourism is a "healthy and vital industry." He noted it helps the economy grow a lot.
Tourism also helps the state's budget through taxes. For example, there's a tax on cruise ship passengers. There are also taxes on car rentals, and local sales and hotel taxes.
Visitors spend their money on many things. About one-fifth of their spending goes to lodging, another fifth to tours and activities, and similar amounts to gifts, souvenirs, food, and drinks.
People are drawn to Alaska's amazing natural beauty. They love the vast landscapes, unique wildlife, and rich culture. Many guided activities help visitors explore these features. These include sightseeing tours, whale watching, glacier viewing, flightseeing, wildlife viewing, hiking, ziplining, kayaking, rafting, and fishing. Fishing alone brings in over $650 million each year from non-residents buying licenses, guides, and equipment.
Alaska's National Parks are also a top attraction. There are 24 national park sites in Alaska. These parks welcome 2.6 million visitors annually and add $1.1 billion to the economy.
Farming and Food in Alaska
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Farming is not very common in Alaska. This is because of the cold climate and mountains. Most farms are in the Matanuska Valley or on the Kenai Peninsula. The growing season is short, about 100 days. However, the long sunny summer days help crops grow well. Main crops include potatoes, carrots, lettuce, and cabbage. Farmers show their produce at the Alaska State Fair. The slogan "Alaska Grown" promotes local foods.
Alaska has a lot of seafood. Fishing is a big industry in the Bering Sea and North Pacific. Seafood is often cheaper in Alaska than in other states. Many Alaskans fish in rivers during salmon season. They catch a lot of fish for their families to eat. This is called subsistence fishing.
Hunting is also important for many Alaskans, especially in remote areas. They hunt animals like caribou, moose, and Dall sheep for food. A traditional native food is Akutaq, sometimes called Eskimo ice cream. It can be made with reindeer fat, seal oil, dried fish, and local berries.
Reindeer herding happens mostly on the Seward Peninsula. This helps keep domesticated reindeer separate from wild caribou.
Most food in Alaska comes from outside the state. Shipping costs make food in cities quite expensive. In rural areas, food prices are even higher. This makes hunting and gathering for food very important for many families. For example, a gallon of milk can cost about $3.50 in some villages. Fuel can cost over $8.00 per gallon.
Alaska's Permanent Fund
The Alaska Permanent Fund is a special savings account for the state. It was started in 1976. The fund manages extra money from Alaska's oil revenues, especially after the Trans-Alaska Pipeline System was built. It began with $734,000 and has grown to $40 billion thanks to oil money and smart investments.
Since 1982, a part of the fund's earnings has been paid out each year to eligible Alaskans. These payments are called dividends. They have ranged from $331.29 in 1984 to $3,269.00 in 2008. To get a dividend, you must have lived in Alaska for at least 12 months and continue to live there. Each year, the state legislature takes 8% from the earnings. It puts 3% back into the main fund to protect it from inflation. The remaining 5% is given to all Alaskans who qualify.
Cost of Living in Alaska
The cost of goods in Alaska has often been higher than in the other 48 states. This has changed somewhat in Anchorage and Fairbanks. In these cities, the cost of living has dropped a bit in recent years. However, it is still one of the highest in the country. Federal government workers, like postal service employees and military members, get extra money to help with these higher costs.
When large stores like Walmart opened in Anchorage and Fairbanks, it helped lower prices. However, rural Alaska still has very high prices for food and other goods. This is because it's hard and expensive to transport things to remote areas. Many rural residents travel to cities to buy food and goods in bulk. Some also use online shopping with free shipping to get items more cheaply.
Major Employers
Many different businesses and government agencies provide jobs in Alaska. Some of the largest employers include healthcare providers, retail stores, and companies involved in energy services and seafood processing. The government, both state and federal, is also a very large employer across Alaska.
See also
- Alaska locations by per capita income
- Hunting and fishing in Alaska
