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Submitted to the
Alaska Natives Commission
in connection with a hearing at

Fairbanks, Alaska
July 18, 1992

4000 Old Seward Highway, Suite 100
Anchorage, Alaska 99503


Witness List | Exhibit List | PDF Version


Deposition Exhibit #5 - Testimony of Gary Moore and Edward Rutledge


Testimony For The Alaska Native Commission
by; Gary A. Moore, Economic Development Specialist
& Edward Rutledge, Planning Director
Noel Wein Library, Fairbanks, Alaska
July 18, 1992


In order to determine the economic viabililty of a specified region, state, or nation as a whole, unemployment figures are often used as one tool to paint a picture of either a healthy, employed, productive society or one that is unemployed and in despair. To try and portray the economic situation of the Interior Region of Alaska, which encompasses the majority of the forty-two native villages served by the Tanana Chiefs Conference, Inc., these same tools will be utilized, but only to reflect a portion of the whole picture.

The Alaska Department of Labor's latest unemployment figures, as stated in the Alaska Economic Trends, July 1992 issue, indicates that the Interior Region of Alaska had a regional unemployment rate of 12.3% for the month of March '92. This is up 1.8% from two years prior or reflects an increase of 420 additional unemployed individuals. To be more specific, we can break down the Interior Region into three designated areas, the Fair-banks North Star Borough, Southeast Fairbanks, and the Yukon-Koyukuk area. The North Star Borough contains all of the urban residents within the entire Interior Region and had an unemployment rate of 11.8% for March '92, also up 1.8% from two years earlier. The Southeast Fairbanks area, containing rural residents, had an unemployment rate of 16.7% for the same month, an increase of 3.8% from two years before. The Yukon-Koyukuk area, mostly consisting of rural, remote (off the highway system) residents, acquired an unemployment ratio of 14.5% for March of this year, up slightly by 0.2% from two years previous.

What these figures verify is that high unemployment is commonplace for the Interior Region residents of Alaska and the situation is not improving. An economist with the Alaska Department of Labor described the current economic situation in Alaska as being in a stagnated state. The rates of unemployment for the Interior, as high as they may appear, do not represent the true percentages for the region. The Alaska Department of Labor's official definition of unemployment, currently in place, excludes anyone who has made no attempt to find work in the previous four-week period. Most Alaska economists believe that Alaska's rural localities have proportionately more of these discouraged workers. What is not mentioned by the Department of Labor is that in most rural, remote areas, discouraged workers do not result from those individuals not seeking work, but as a result of no work being available during much of the year. Therefore, after a period of four non-working weeks they drop out of the system and no longer register on unemployment statistics. If these factors could be sufficiently measured and incorporated into the statistical system, actual unemployment figures would show numerous rural villages with unemployment rates as high as 90+%.

In addition to minimal job opportunities, we should also look at a few of the daily living expenses from the rural resident's perspective. To avoid giving a worst case scenario of village life, we will select a village which has done relatively better economically, in comparison to many other villages within the Tanana Chiefs Conference Region.

The village of Holy Cross is located 420 miles Southwest of Fairbanks on Ghost Creek Slough, just off the Yukon River. The 1990 census showed Holy Cross to have a total population of 227 residents of which 93.5% were Native. Holy Cross, like many others on the Yukon River is dependent on a seasonal economy of fishing for King, Silver and Chum salmon. Approximately 20 residents have commercial fishing permits and approximately 50 full-time employment opportunities are located within the village. 70 of the residents 16 years and over were registered as being in the labor force. The registered unemployment figure for those in the labor force was 38.6%. This percentage is quite high and cannot be interpreted from reading the regional statistic from the "Alaska Economic Trends" monthly publication, not to mention the number of discouraged workers who still are not indicated if they have had four consecutive weeks of no employment at the time the census was taken.

To present one example of the differences between the urban and rural daily cost of living expenses, we gathered prices of commonly used food items, gas, and heating oil in Holy Cross and compared them to Fairbanks prices. They are as follows;


  Fairbanks Holy Cross % Up
Bread (loaf) $1.07 $2.00 87%
Meat (ground beef) $1.89 lb. $2.95 lb. 56%
Cheese (sliced, 16 pk) $3.47 $4.95 43%
Milk (12 oz. can) $ .69 $1.25 81%
Peas (1 lb. can) $ .75 $1.50 100%
Corn (1 lb. can) $ .59 $1.39 135%
Green Beans (1 lb. can) $ .99 $1.35 36%
Tang (15 oz. jar) $2.39 $4.45 86%
Gas (1 gallon) $1.20 $2.25 88%
Heating Oil (1 gal.) $1.10 $2.15 95%
Total Cost Difference $14.14 $24.24 ----
Total Averaged Increase ------ ------ 71%

The above cost figures and percentages indicate that rural villages and communities not only have to deal with higher rates of unemployment, but also with daily living expenses that are considerably higher than urban centers. It must be also noted that Eoly Cross has relatively good transportation, access by plane and barge services, which keeps their cost of goods lower than many other villages in the state which are not as fortunate.

Coming to the conclusion that rural communities or villages endure greater economic hardships certainly comes as no surprise. However, what villages critically depend on to offset the high cost of living is the utilization of subsistence wildlife resources. Without this resource the village quickly perish. Bringing rural Alaska into a cash dependent economy is still fairly new, considering that Alaska Natives lived and survived solely in a subsistence way of life for thousands of years prior to the onslaught of Western civilization in this country. In the anticipated future, all change, adaption, and evolving of the Native way of life should be controlled by Native people. This can be accomplished by maximizing their participation in proposed changes. This state and our nation, as a whole, has had a notorious history of paying little or no regard for the indigenous people's rich cultural past, prior to permanently altering their lifestyle. Let is be noted, that regardless of future economic conditions in rural communities, subsistence activities will always play a vital role in the lives and cultural practices of modern Native people.

Other related factors affecting the economic development in rural Alaska are the state and federal budget processes. It is not uncommon to hear state and federal officials focus on the costs of economic development programs. It may be advantageous for these officials to consider the costs of not adequately funding such programs. The combination of the lack of jobs and high cost of living results in a myriad of social and behavioral problems that burden society in general, and cost the state and federal government millions of dollars each year. These funds are spent to support social, family and mental health programs, including alcohol and drug abuse programs, which, to some degree, are the result of low self esteem stemming from chronic unemployment.

Specific economic considerations for jobs in rural Alaska have two basic points.

1) Save existing jobs.
2) Create new jobs.

Probably the most significant segment of jobs at risk of loss are those that pertain to fisheries -both commercial and subsistence. The combination of high seas interception, of Alaska salmon and the exploitation of mixed stock fisheries, most notably the False Pass fishery, have resulted in a drastic reduction in the wild resource available for harvest in our Interior rivers. We are the last in line to have a chance at harvesting salmon and are the first in line to suffer due to diminishing salmon populations.

Salmon enhancement programs for the Yukon River, the Kuskokwim River, and the tributaries of both of these rivers will greatly enhance the economic conditions of the Interior. The value of fisheries is not limited to only the dollars earned by fishermen, crews and processors, but also includes the import substitution value of salmon products harvested and used by subsistence fishermen.

The Economic Development Administration has documented that saving jobs is far less costly than creating new jobs, not even considering the social costs discussed earlier.

Creating new jobs in the rural communities of the Interior will involve overcoming many obstacles, such as:

a) High cost of transportation, both time and money.
b) Lack of human resource with business skills.
c) Land use obstacles for any enterprise larger than a cottage industry.
d) Difficult access to capital.
e) Lack of business support infrastructure.

New jobs are more likely to evolve if those jobs are culturally relevant, employ locally available skills, and are grass roots; that is, evolve out of community needs and desires.

Employment opportunities in the villages typically occur at four different levels:

1) Entrepeneurial activities, including proprietorships and partnerships. Job creation at this level should probably focus on providing persons with the business skills necessary to allow them to become self-employed. These newly acquired skills, combined with vocational and cultural expertise, could also open up or enhance additional opportunities, such as in tourism.

2) Cooperatives/ Village Corporations/ Tribal-Owned Enterprises. Job creation at this level will likely require land and capital in addition to the human resources.

3) Local government (City or Tribal). Job creation would likely involve the implementation or expansion of health services, public safety (including Tribal Courts), and/or utilities.

4) State Government, typically involving airfield maintenance and School Districts. Job creation in the areas of Native Language and Native Arts curriculums would not only infuse cash into the village economies, but would likely strengthen the relationship between schools and residents.

5) Federal government employment in Interior villages is almost nonexistent - the exemption being those few communities with military sites that hire civilian services.

The ultimate repercussion for failure to adequately address economic development needs, in the future, for, rural Alaska will be;

1) Continued influx of rural residents to urban centers, resulting in rural community and village regression and possibly extinction.

2) Additional competition for urban jobs by a larger residency, in turn increasing unemployment percentages.

3) Increased cost to address social needs of rural displaced residents in urban areas.

This document was ocr scanned. We have made every attempt to keep the online document the same as the original, including the recorder's original misspellings or typos.



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Last modified May 11, 2011