Alaska’s population is still younger than US but is aging at a dramatic rate

Alaska’s share of youth has shrunk and its retirement-age population has grown sharply, opposing factors that are reducing the state’s workforce and complicating the pandemic-related labor shortage, state experts say.

Alaska economists touched on the diverging demographic trends in an annual jobs forecast released by the state Department of Labor and Workforce Development.

The aging of Alaska is a long-term issue that will continue to squeeze the workforce from both ends of the age spectrum, according to the report.

“An older population means a smaller pool of working-age people, and a lower birth rate translates to fewer future workers,” wrote Alaska economist Karinne Wiebold.

And there are other impacts. Parts of Alaska are closing schools as the population of young people shrinks, while the rapidly rising elderly population has led to demand for new health care facilities and services.

[Alaska’s population rose slightly in 2022, but more people continue to leave than arrive]

For now, Alaska has about 11,000 fewer jobs than it did before the pandemic, wrote Wiebold. Despite that, the worker supply is still short. And job openings in the state hit record levels last year, she wrote.

People leave the workforce for a variety of reasons, including to care for children or ailing relatives, or maybe they’re going back to school and training for a new career. Fewer people moving to Alaska is another factor, she writes.

[Alaska’s overall economic performance among the worst in US for several years, research finds]

“An older population means a smaller pool of working-age people, and a lower birth rate translates to fewer future workers,” Wiebold wrote.

Older than in 1980

Alaska is still younger than the rest of the U.S. by a couple of years, state experts say. The state’s average resident is now about 36.

That’s a decade older than they were in 1980.

Older people are helping bend that curve. Their numbers have “grown dramatically,” Wiebold writes.

In the last four decades, the share of Alaskans 71 and older has increased several times over, from a little over 1% to close to 8%.

Then there are the children.

Alaskans 15 and younger have fallen from about 29% of the population to about 22%.

[Where are workers to fill all the empty jobs in Anchorage? It’s complicated.]

Lower birth rates in Alaska, though still above the national average, is one factor for the drop in children, said David Howell, the state demographer, in an interview on Thursday.

Alaska’s birth rate over the last decade has fallen to 1.9, about two-tenths lower than what’s considered necessary to replace the population over the long haul, he said.

“That doesn’t sound like much, but it’s a lot,” he said.

The number of births annually has fallen to 9,400, down nearly 2,000 births from six years ago.

“In addition to the fertility rate, you have a lot of millennials aging out of the prime birth years” and now getting into their 40s, he said.

‘Aging in place’

In the 1980s and 1990s, younger people were moving to Alaska, starting families and sometimes bringing children with them, said Howell.

[Years after the pandemic forced many Alaskans to work from home, these employers are sticking with it]

Some of those people are still in Alaska and hitting retirement age, he said.

“They’re aging in place,” he said.

Also helping thin the workforce, and reducing the number of children who could one day join the workforce, is net outmigration, Wiebold said.

[Anchorage’s average home price rose to a record $456K, but higher interest rates are starting to cool the market]

More people have been moving away from Alaska than coming here over the last decade, she writes.

That also shrinks the population of children.

Movers are disproportionately in their 20s and 30s, and when they move they take their children with them, she writes.

Changing demographics affect education, health care

The implications extend beyond the workforce.

In education, the dwindling share of young people is creating difficult conversations for school administrators, Howell said.

Fewer students, added to an ongoing budget crunch, contributed to the Anchorage School District’s recent move to recommend shutting down some elementary schools. The school board recently agreed to close Abbott Loop Elementary, down from the six school closures proposed by the district, but school board members say more could close in the future.

“There’s not a big group of kids about to enter the school system,” Howell said. “There are smaller and smaller numbers due to births declining since 2016.”

As for health care, Alaska’s growing population of retirement-age residents is expected to continue buoying the industry for many years to come, Alaska economist Neal Fried wrote in the publication, in a jobs forecast focused on Anchorage.

“Alaska’s 65-plus population nearly doubled from 2010 to 2021 and grew by 6,000 from 2020 to 2021 alone,” Fried wrote. “This age group will keep growing through at least 2035.”

“As Anchorage is the state’s health care hub, an older Alaska will raise demand for health services in the city,” Fried wrote.