Daily Sitka Sentinel

Report Shows Sitka Losses to Pandemic

By SHANNON HAUGLAND
Sentinel Staff Writer

The pandemic hit Sitka harder than it did most other Alaska communities, with heavy job losses and declines in sales and workplace earnings from 2019 to 2020, a Southeast Alaska economic and social research firm reports.

Jim Calvin, senior consultant at the McKinley Research Group (formerly the McDowell group) spoke at the annual State of the Sitka Economy presentation hosted April 22 by the Sitka Economic Development Association. About two thirds of the audience of 50 attended at Harrigan Centennial Hall, and others watched the meeting live on Zoom.

Calvin and Robert Venables, executive director of Southeast Conference, came to Sitka to present their information in-person. Calvin, who lives in Juneau, said it was the first time in more than a year that he has given an in-person presentation to a group. He has been studying the Sitka economy for more than 25 years.

Calvin reviewed the effects of COVID-19 on Sitka’s economy and Venables talked about strategies for rebuilding the region’s economy.

Calvin estimated total visitor spending in Sitka in 2019 was $60 million, including cruise and independent travelers. With the loss in 2020 of the cruise season, and a decline in independent travelers, most of that spending did not materialize although the precise losses are not yet known, Calvin said.

The hardest sector hit from the pandemic was the visitor industry, with  a loss of the 199,000 cruise visitors that had been expected in the 2020 season. This year was to have been even greater, with a forecast of 302,000 visitors. Some 35,000 independent travelers were expected in 2020, but no data was presented on the actual number who came.

Calvin noted the losses in the seafood industry as well, with a decline in demand for high-value Alaska seafood. He noted 2020 halibut prices dropped by 25 percent from 2019 to 2020 and blackcod was down 30 to 40 percent, in Southeast.

“Sitka processing jobs in the first nine months of 2020 were 100 jobs below 2019, which was down 18 percent, and 30 percent in March and April,” one of the slides said.

Calvin showed slides about relief payments due to the pandemic, and general demographic information.

One of the biggest differences between 2019 to 2020 was in unemployment insurance claims, with $215,776 paid to Sitkans in 2019, the year before the pandemic, rising to $7.6 million in 2020.

That figure spiked in May 2020, with $2 million paid to 579 Sitkans filing claims. The average paid was $831 per week, Calvin said.

In February 2020, the last month before the pandemic hit Alaska, 63 Sitkans filed for $65,074 in unemployment claims. In the same month a year later, 266 filed claims for a total of $511,208.

SEDA Director Garry White said today it was the first time in two years that SEDA had held the State of the Economy program.

“It shows business leaders and community leaders how the economy is trending over time: what are the demographics and the health of the local economy?” White said. “It’s a handy tool to let everyone know what’s going on.”

He said although he’s been following the trends, there were some eye-opening statistics that the public should take note of.

“It was shocking to see how bad Sitka got hit versus other parts of the state,” White said. “We lost 15 percent of our jobs in the first nine months – the state only lost 9 percent. Wages January to September, we lost 12 percent, whereas the state losses were 3 percent.” 

White said the travel mandates delayed the start of and limited the independent travel market, peaking in August. The 2019 chart shows travel in a non-pandemic year peaks in July.

White added, “We started gaining at the end of the summer as more people became more comfortable traveling.”

Sitka still has 266 people who were laid off from their jobs and haven’t gone back to work, but he added that the number appears to be going down.

“That’s the takeaway, that we’re on the downward side of this,” he told the Sentinel today.

Some $8 million was paid out to qualified individuals in 2020 for the federal economic impact payment program, and $31.5 million went to businesses through the Paycheck Protection Program.

In his April 22 report Calvin said CARES Act funding for the community was $14.1 million, and $14.2 million in Economic Injury Disaster Loans, which included loans and advances. Tribal governments and organizations received more than $7.5 million in federal funding.

He estimated more than $80 million in total came in to Sitka residents, businesses and organizations, which includes $6 million in the IEIP program for 2021.

The downward trend in the Sitka population since 2014 continues, Calvin said, and is expected to be 8,130 by 2030. The 65 and up population is increasing. That segment went from 11 to 17 percent over a decade, and is projected to be 22 percent of the population by 2030.

“Is the community planning for this increase in population?” White asked. “Do we have services and capacity to handle this increase in our elder population?”

Calvin added today, “Accommodating the needs of seniors with the right transportation, housing, healthcare and social services is an important part of sustaining Sitka’s economy.”

Highlights of the Sitka economic report:

– $21 million in lost wages in 2020 and continuing losses in 2021.

– $60 million in lost business sales, and continuing in 2021.

– $80 million-plus came in in federal relief with more to come.

– $7.6 million came in in unemployment, with more to come.

– COVID economic impacts were most severe among low wage earners and small business owners.

– “Long-term impacts of COVID-19 are unclear.”

Venables had a short presentation, with the message that he’s working with business and community leaders throughout the region to recover together. His presentation focused on “a way out” and rebuilding the economy after COVID.

Priorities include supporting the Alaska Marine Highway; mariculture development; marketing Southeast to visitors to “attract more visitor spending and opportunities”; and “promot(ing) beneficial electrification.”

Both PowerPoints are available on the SEDA website at sitka.net.