Wednesday, December 17, 2014

Outlook Upbeat for Alaska Seafood Harvesters, Processors

A new labor report on employment in Alaska’s seafood industry says the harvesting sector in 2013 averaged monthly employment growth not seen since 2000, and predicts continued growth in the processing sector through 2022.

The November edition of Alaska Trends, focused on seafood harvesting and processing jobs, also notes that the six community development quota groups tasked with boosting the economy of 65 villages in Western Alaska had gross revenues of $318 million in 2013, from a variety of sources that included fishing, processing, quota royalties, program revenue, and investment income, and combined net assets for 2013 amounted to $899 million.

Daniel Strong, a research analyst with the Alaska Department of Labor in Juneau, said seafood processing industry employment is projected to grow by 6.7 percent between 2012 and 2022, and the highest-paid processing occupations are expected to grow at nearly twice that rate.

Across all industries in the processing sector, expected growth ranges from a low of 6.9 percent for electrician helpers to 15.3 percent for captains, mates and boat pilots, Strong noted.

Job numbers in the processing sector grew by 2.4 percent in 2013, primarily driven by increased salmon harvest, bringing the year’s monthly average to 8,393 jobs, less than 400 shy of the 2000 level, said Josh Warren, an Alaska Department of Labor economist in Juneau, writing in the state agency’s monthly report on economic trends.

The increase in harvesting and jobs has also produced a larger seasonal swing, Warren said. Alaska’s seafood harvesting has one of the strongest seasonal patterns in the nation, with a difference of about 25,000 jobs between the highest and lowest months. Winter employment shrank or remained stable in 2013, while peak summer employment reached a record of 25,859 jobs in July. In June alone, there were 2,500 more harvesters than for the same month in 2012.

Salmon harvesting jobs were the main source of growth in harvesting employment between 2012 and 2013, with a gain of 452 jobs, or 10 percent.

This growth came from a small increase in reported crew sizes by permit holders, as well as more fishing, Warren noted.

Job numbers in the groundfish fisheries had a much lower profile than other fisheries data, such as catch volume and value.

Groundfish make up the largest share in terms of volume and salmon in value among all fisheries, with nearly $680 million worth brought to the docks in 2013.

Salmon harvests made up just 17.5 percent of total seafood volume, and 36.5 percent of total commercial fisheries value. Three billion pounds of walleye pollock, over half the overall volume of seafood landed in 2013, were 25 percent of total Alaska landings value.

Variations in methods, regulation, and markets dictate the effort and employment necessary for each fishery. Limits on size, equipment type, and the number of days allowed for salmon fishing mean more job opportunities and crew are needed. Larger ships fishing for pollock in the Bering Sea need fewer crew and fetch higher catch prices.

Warren noted that Southeast Alaska has been the regional leader in both volume and value of the salmon fishery since 2011, thus generating the largest job counts.

Southcentral Alaska was second, with its halibut fleet and Prince William Sound and Cook Inlet salmon fisheries. Employment in the Aleutians/Pribilof Islands was third-highest because of its diversity and triple digit employment in salmon, halibut, groundfish and crab harvesting.

Harvesting employment dropped 12.6 percent overall in Kodiak in 2013, but was still higher than 2011 levels. While Kodiak’s salmon fisheries grew, employment dropped in halibut and various other groundfish fisheries due to an overall decrease in landings and a reported decline in the number of crew members necessary to fish each permit, Warren said.

Salmon fishery employment in the Bristol Bay region was flat overall. June and July of 2013 saw record employment, but in August employment was half of what it had ben the prior year. In northern Alaska, the region gained an average of four yearly jobs, largely from a strong herring return.

The Aleutians and Pribilof Islands lost 150 jobs in 2013. Aleutian salmon harvesting jobs rebounded to their 2011 level, which was a 20 percent increase from 2012. Declines in that region’s other fisheries overpowered the rebounding salmon employment, because salmon is such a small portion of the overall harvest.

Southeast Alaska meanwhile gained 210 harvesting jobs in 2013, reaching a level not seen since 2000.

Most species showed job growth from 2012, except for groundfish and crab, which had negligible losses. The longest continuous growth in Southeast Alaska has been in salmon fisheries.

In Southcentral Alaska, 73 percent of the harvesting jobs were in salmon fisheries.

Nearly 28,000 people worked in the seafood processing sector in 2013, nearly four out of five of them doing hands on labor making surimi, processing fish roe, or cutting and trimming. Other fish processing workers were employed in supporting services, including grading, machine operation, ship maintenance, packing, and general labor.

Strong notes that Alaska had about 170 fish processing facilities in 2012. Most of the onshore processing plants were in Southeast and Southcentral Alaska, but the highest numbers of processing workers were in the Aleutians and Pribilof Islands, followed by Southeast, Bristol Bay and Southcentral Alaska. Processing work is mostly seasonal and few workers are employed year-round.
Strong noted that in 2013 only 2 percent of seafood processors, who represent 18 percent of seafood processing occupations, worked an average of at least three quarters, and many of them were office workers or material movers. The majority, 91 percent, worked two or fewer quarters.

Seafood processors tend to stay in the industry for at least a few years. Strong found that from 2007 to 2012, more than half of them returned for a second season, and that over the same period, one out of four had worked in the industry for the past five years or longer.

Higher-Wage Jobs

While jobs in seafood processing are generally for low hourly wages, high seasonality and low resident hire, the industry also has a number of higher-wage jobs following a different trend.
Strong noted that the 11 highest paid jobs in the industry relate to engineering, high-level management, installation, maintenance, and repair work. This group included ship engineers at 34 percent, followed by captains, mates, and boat pilots, and general and operations managers.

While this group comprised just 1.2 percent of all industry workers, they earned 6 percent of total wages. The median annual wage for the industry was $24,689, compared to $66,720 for the highest-paid occupations. These wages ranged from a low of $57,889 for ship engineers to a high of $148,678 for chief executive officers.

In the management sector, jobs paid an average of $82,364 annually, accounting for 36 percent of the total wages.

About 64 percent of this group’s wages went to plumbers, pipefitters, and steamfitters; electrician helpers; structural metal fabricators and fitters; other engineers, captains, mates, and pilots of water vessels and ship engineers.

Most of these higher paying jobs require more qualifications than other fish processing industry jobs.
Two-thirds of these jobs require a bachelor’s degree but most of these jobs require less than five years of experience and no on-the-job training.

The higher paying occupations tended to go to older workers with over half being 45 years of age or older, on average.

Alaska Economic Trends also looked at employment in the six community development quota groups, which represent 65 communities that are among the most economically disadvantaged in the state, with chronically high unemployment.

In the 22 years since their inception, the CDQ groups have become powerful players in the heavily industrialized commercial Bering Sea and Aleutian Island fisheries, notes state labor economist Caroline Schultz, author of this article.

Financial statements from the CDQs for 2013 show that these six corporations eared $318 million in gross revenue from various sources. These included fishing, processing, quota royalties, program revenue, and investment income. For the same year, the corporations’ combined net assets totaled $899 million.

Each of the CDQs has a different approach to economic development, aiming to tailor programs and investments to the needs of their communities. These may include direct employment, investment in subsidiaries, scholarships, community grants, training, scientific research, and infrastructure.

Initially the CDQ groups partnered with non-CDQ harvesters by leasing their allocation to vessels and processors. Now some of the CDQ groups own their own catcher vessels, factory trawlers, and on-shore processing facilities. While the law allocates about 10 percent of the total harvest quota to CDQ groups, they control an estimated 40 percent of the pollock trawl fleet in the Bering Sea.

The CDQs do not, for the most part, directly employ fish harvesters and processors, who are instead managed by subsidiaries and joint ventures. The CDQ subsidiaries generate an additional 1,000 plus jobs in the region.

The CDQs also provide funds for local governments, tribal organizations, and schools, giving the villages the ability to govern, provide basic services and improve their standard of living.

In 2011, the latest year for which the Western Alaska Community Development Association had totals, the six CDQ groups provided nearly $7.3 million for infrastructure projects and more than $17.7 million for community benefit projects.

CDQ groups also granted in 2011 more than 725 scholarships, worth $2.1 million, and then spent $780,000 on training and skill development.

Schultz noted that there is disagreement between CDQ groups about the fairness of the quotas based on population and historical ties to fisheries. There are concerns that the groups’ incentives aren’t always aligned with their region’s best interests, such as disputes over the impact of salmon caught incidentally in the pollock trawl fishery on weak salmon subsistence harvests on the Yukon River.

Broader, long-term concerns for the Bering Sea fisheries include climate change, ocean acidification and stock depletion, but the biggest challenge for the CDQs is to alleviate poverty and provide economic and social benefits to this region of Alaska.

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