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

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

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

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

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

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.