Juneau, Alaska

(907) 699-6788 ed.king@kingecon.com

Government’s Jobs, Wages, and GDP

The impact of the government on the economy is something that is always of interest. So, here are the data. All of the data on this page are captured from government sources and aggregated here for your convenience. Feel free to download the CSV file attached to any chart, or to click the link to the source document. Interpreting these data is up to you.

Gross Domestic Product

These data come from the Bureau of Economic Analysis (BEA). As you can see, they break the Federal data down into civilian versus military spending, and they combine the state and local spending. The dataset goes back to 1963, just a few years after statehood. However, there is a change in the data definition in 1997. So, be careful if you attempt to use these data as a continuous series, as comparisons between years before and after that year will have inherent measurement error.

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Generally speaking, the government contribution to the economy is the wages it pays to its employees. As such, not all government spending counts toward GDP. Therefore, the state’s budget is often larger than the GDP value that is assigned to it. The reason for this is that some spending does not enter the economy (debt service, fund transfers, etc.), some of that spending gets counted when the recipient spends it (transfer payments, PFDs, municipal grants, etc.), and some spending gets captured by the business receiving the payment (construction, healthcare, contractors, etc.).

While the amount of government contributions to the economy have steadily increased over time, the economy as a whole has grown faster. Therefore, the portion of the economy that is supported by Federal government spending has decreased over time while State and Local government spending has been a relatively stable portion of the economic activity.

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However, at over 20% from public employee wages, plus all the other money in the economy that originates from the government, Alaska still has the most government dependent economy in the nation.

To dive deeper into Alaska’s GDP numbers, click here.

Labor Force

The number of jobs in the public sector is available from a few sources. However, each source is reporting a slightly different definition of jobs. Therefore, each of those datasets are available here. It may take a little bit of data cleaning to create the dataset you need. But, all sources tell the same basic story.

BEA Data

These first data are from the BEA. Note that the State and Local government in the first 10 years of the series is reported in aggregate by the BEA. The numbers in this dataset assign 60% of those jobs to the local government as an approximation based on future years data.

It should also be noted that these numbers represent all employment, full and part time, from all sources. This includes proprietor employment and military members stationed in Alaska. This is different than other data sources that only count the civilian labor force, and only count wage and salary jobs (such as the Department of Labor below).

Also note that part-time employees are counted as one job. This will result in higher numbers than any dataset that attempts to adjust these jobs to full-time equivalent jobs (no such adjustment is made in the government data). It is also possible that one person may hold multiple jobs, thus increasing the total above any data that counts social security numbers rather than positions (like the Department of Labor does is some of their data).

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Of interest, the Federal government has maintained a fairly stable civilian workforce in Alaska throughout our history (roughly 15,000 people today). However, its military presence has decreased over time (shrinking from over 37,000 during Vietnam to a low of 22,000 before the attacks of 9/11/01, then rising to 28,000 at the height of the war on terror, and down to 25,000 today). The State and Local government workforces have grown roughly at the rate of population growth.

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As a share of the total workforce, Alaska is no longer just a military outpost. The economy has grown into something far more self-sufficient. State government also contributes far less to the economy than commonly believed. But combined, the public sector still represents a significant portion of the labor demand. Nearly one out of four employed people in Alaska are directly paid by some form of government.

However, the impact of the State government on the economy is far less. Only about 7% of wage and salary jobs (and less that 5% of all employment) come from the State government. About the same amount is supported by education funding.

Legislative Finance Data

The legislative finance division is the record keeper of the state budgets. They advise the legislature on financial matters. Within those budget, they keep track of state position counts. While these data do not tell us how many of the positions are filled, they do allow us to get a little more detail in the type of positions that were funded.

These data were pulled from the “enacted” operating budget reports, downloaded from the Legislative Finance website.

[position counts graph]

Department of Labor Data

These data come from the Alaska Department of Labor, which puts these numbers together with the Bureau of Labor Statistics using their “Current Employment Statistics.”

These data include all employees on the government payroll (excluding military) and provides information both on a monthly basis and separated into the different levels of government.

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One thing to note is the seasonality of employment, which is mostly attributable to the fact that educators are not employed in the summer. Here is the state and local “education” employment as reported by the Department of Labor.

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Reorganizing the local employment numbers, the next chart shows how much of local government employment is attributable to the school districts.

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