ANCHORAGE, Alaska -- Labor Day saw the biggest workforce -- the Exxon Valdez cleanup army -- toiling in Alaska since the trans-Alaska pipeline was built and unemployment plummeted to its lowest level since then.
The Exxon Valdez oil spill, an unparalleled environmental disaster for Alaska, created a tremendous economic boom on the verge of bust and creating turmoil in towns enjoying the benefits.
State labor economists coined a phrase, 'economies in turm(oil),'to characterize the situation.
Exxon has begun lay-offs in its 11,000-person cleanup army to complete a pullout by Sept. 15, but the summer oil spill economic boom should not turn bust for another month, economist Neal Fried said.
Just like the oil spill, where the environmental impacts may take years to measure, economists will be studying impacts for years, Fried said.
Shortly after filling up with Prudhoe Bay crude at the Valdez oil terminal, the tanker Exxon Valdez ran aground March 24 in Prince William Sound, spewing nearly 11 million gallons of oil across southern coastal Alaska.
The oil industry was slow responding to the spill but by April was amassing a huge force of workers, pushing Alaska's double-digit unemployment rate down to 8.5 percent.
May's unemployment rate of 7.7 percent was the lowest for that month in 15 years. June dropped to 7 percent, lowest since peak construction of the trans-Alaska pipeline in 1976. July set a new historic low with 6.1 percent unemployed. Alaska, with one of the highest unemployment rates in the country, edged closer to the national rate. The official August rate will not be available for another two weeks.
Not only did unemployment drop to levels unseen since pipeline construction, but Fried said the Exxon cleanup was 'analogous to a giant construction project' in its impact on the overall economy.
He estimated spill payroll at well over $100 million and said the cleanup economy is offering economists new benchmarks.
Since half of Alaska's population lives within 50 miles of Prince William Sound, where the oil spilled, waves of workers from Anchorage and nearby towns rushed to get high-paying cleanup jobs.
The population of Valdez, spill headquarters, quickly doubled and doubled again. In the Valdez and Cordova communities most affected by the spill, unemployment went from 14.5 percent in March to 2.9 percent in July.
'The promise of high wages for unskilled work turned Valdez into the employment mecca of the state and, to a lesser extent, the nation. The news media provided the largest 'help wanted' sign Alaska had ever secured,' economists Fried and Holly Stinson said in a report.
Exxon paid $16.69 per hour. With overtime for 12-hour days and seven-day weeks, many collected $1,800 weekly paychecks, not far below the average Alaskan's monthly wage.
Payroll analysis showed that perhaps one-fourth of the workers came from outside Alaska. The state Department of Labor sent letters to every state discouraging workers from coming to Alaska. The state told Exxon and its contractors to hire locally, giving preference to those who lost their livelihoods because of the spill.
Fishermen unable to fish because of oil in the water were hired by Exxon along with another 8,000 workers, Fried said.
Turmoil came when workers in lower paid jobs quit to take Exxon jobs. Employers found it so hard to replace them that state job offices recruited statewide for jobs in Valdez, Cordova and Seward and offered free transportation.
Child care centers in spill communities -- needed more than ever with parents working on the spill -- had a hard time staying open because no one wanted to work for what had been the standard wage. Businesses had to raise hourly wages in a futile attempt to compete with Exxon.
Now, with Exxon jobs ending, it will be difficult for these small-town year-round employers to keep their wages high, but just as difficult to lower them, Fried said.
'It's possible that employers may be left with a more permanent increase in the cost of doing business because wages don't usually fall as rapidly as they rise,' Fried and Stinson said in an analysis.
The spill's economic impact has been felt well beyond Valdez. The port of Anchorage has been busy receiving supplies, including 800 tons of weekly groceries, distributed to the cleanup force, boosting marine transportation 37 percent higher than last year.
Several tiny subsistence native villages went from near-zero employment to zero unemployment.
But, Fried said, unlike a giant construction project such as the pipeline, no one knows what will happen after this month's massive layoffs. Exxon has steadfastly refused to commit to future work and the disastrous spill that led to a summer boom offers an uncertain future for fishermen and the Alaska economy.
Fried and Stinson said, 'There is a shadow hanging over this quick and painful economic shot in the arm provided by oil cleanup dollars.'
