Low wages, higher costs of living and lack of housing were just some of the key issues discussed during the Haines Economic Development Corp’s (HEDC) meeting earlier this month to present their 5-year economic plan update. More than 30 residents were in attendance to offer insight on the direction of the Haines Borough.

HEDC examined data released for the previous year to forecast potential issues that might strengthen or weaken the local economy. Key economic indicators that reflect the needs and desires of the community are gathered through public surveys in an attempt to balance the community’s views on various topics with the initiatives of the commission.

Among items listed as strengths by the HEDC include an increase in sales tax receipts, a strengthening tourism season outlook with a projected increase in cruise ship dockings next summer, and growth in the healthcare and social services sector. The potential Palmer Project, exploration jobs and state lands timber sales were also listed as strengths.

Weaknesses included sharp wage declines amid already low average wages and a higher cost of living, lack of employment, population decline, lack of affordable housing, ferry and air traffic declines, and higher costs of freight, energy, phone, and internet services.

Initial findings of the economic baseline report from each year are intended to be a comprehensive study to identify economic conditions and trends in Haines, including demographics, housing, transportation, and industry profiles. However, the assignment of any topic as either a strength or a weakness is up for debate among community members.

“There is still a question of what concerns the HEDC places their emphasis on,” said Rebecca Braun, a consultant with McKinley Research Group from Juneau. However, “sentiment of the HEDC is more balanced when working toward a lot of different economic opportunities.”

The most recent data numbers from the 2022 Indicators Report, which reflects data from 2021, indicate that total employment numbers are up 10.6% and estimated self-employment earnings rose 28 percent. Average monthly employment rose 5.2%, but the average monthly wage has decreased 1.6% percent. Between 2020 and 2021, private sector employment increased about 5% while government employment increased 6% surpassing pre-pandemic numbers.

A month–by–month look at the data shows that employment increased across all three areas of government – federal, state, and local – with a seasonal spike of government employees in the summer seeming to account for most of the increase according to the report.

Haines’s total average monthly employment data includes both government and private sector jobs. Historically, the sectors with the highest earnings do not necessarily correlate to the sectors with the highest number of employees. In 2021, for example, the leisure and hospitality sector accounted for 17% of the workforce but only 9.7% of earnings.

Haines’s unadjusted 2021 annual unemployment dropped to 11.3% from 15.6% in 2020, according to the report. In recent years, Haines’s unemployment rate has been higher than the rest of Southeast Alaska and the country. Similar to 2020, Haines’s unemployment rate is almost twice that of the rest of Southeast, compared to approximately a third higher in 2019. The high rate of unemployment can be partly explained by the prevalence of seasonal work. It’s difficult to determine how much the continued effects of the pandemic still played a role in 2021 data, according to the report.

Projections for the new year aren’t certain, and there is a worry they may be based on inaccurate data. The federal government is suspected of undercounting residents and housing units in the Haines Borough, causing the unusual population increase figures. Several other data points are unknown. State data and current trends continue to show a population decline in Haines, across Southeast, and the state. Haines is estimated to have one of the highest median aged populations in the state but will continue to shift downward slightly over the next few decades according to state projections.

Cost of living is also difficult to estimate due to ongoing fluctuations in the market. But Haines Borough sales tax revenue, which tend to act as a barometer of economic health, have risen. The increased sales tax revenue generally equates to increased consumer spending. Inflation may play a part, but it may also be an indicator of more consumer confidence and a larger number of people spending money in the community, according to the report.

In a report to the assembly last month, borough finance director Jila Stuart said increased sales tax revenues came from factors including increased tourism, the Haines Highway reconstruction project, increased online sales tax and inflation.

The local economy in Haines is still recovering from the effects of the pandemic, but it’s anticipated that Alaska and municipalities may yet benefit from additional federal funding from the Bipartisan Infrastructure Law (Infrastructure Investment and Jobs Act) which was passed by Congress last year. This bill is expected to provide several investment and funding opportunities over the next several years. How that funding will circulate to Haines and in what form remains unclear.

Lee Hart, Executive Director of HEDC, expressed her gratitude “that so many were willing to come and devote a half day to talk about economic development directions.” The committee is awaiting further data to identify particular concerns surrounding key economic development issues and to promote awareness in the community about both the threats and opportunities which are currently facing the region.