Alaska Economic Trends July 2016: The Cost of Living in Alaska - P.O.W. Report

Thursday, July 7, 2016

Alaska Economic Trends July 2016: The Cost of Living in Alaska

The Following are my Highlights from the July Issue, you may read the whole article here: [Full Source]

Heidi Drygras Comissioner:
Cost-of-living information always receives a great deal of attention in the news media: How high are prices for milk, fuel, housing, and health care? Yes, Alaska has higher prices than the average community in America. We also have higher wages, better job opportunities, and quality of life.

Too often, we forget there’s a correlation between places people want to live and high costs of living. Nearly all places
that are desirable — Alaska, Hawaii, or cities like Seattle, Portland, or New York — have higher-than-average costs of
living. That’s no accident. An attractive place to live will have a tighter housing market and stronger demand for goods
and services. While we should certainly take steps to reduce the cost of living in Alaska, we should also recognize that
our costs are at least partly a byproduct of demand to live in our great state.

That doesn’t mean we can’t reduce the cost of living in Alaska. My department is focusing workforce development investments on the health care sector to improve the quality of care while controlling costs. Alaska is the most challenging place in America to reach this objective, but we can make a positive impact, especially because we have outstanding leadership at the Department of Health and Social Services. Our investments in behavioral health training, care coordination, and registered
apprenticeships for Alaskans are part of the solution to reduce costs through wellness while reducing the need to import expensive, temporary out-of-state health care workers.

 Inflation Rate Hits Historic Lows

The biggest news for our living costs over the past year has been the continuing decline in energy prices. In Anchorage, which is the only place in the state where inflation is measured, energy prices fell by 10.3 percent in 2015, the single largest annual decline since 2009. Gasoline prices alone fell nearly 25 percent. Lower energy prices are heavily tied to other categories, particularly transportation, which fell by nearly 7 percent. Because transportation has such a large “weight” in the index — which means it’s a significant expenditure for most households — these changes have a powerful effect on the overall inflation rate.

$372,009 for a house in Juneau 

In 2015, the state capital was the most expensive city for buying a single-family home, a spot that Juneau has traded back and forth with Anchorage over the years. Four places in the state had an average sales price nearly $100,000 less than Anchorage and Juneau. When it comes to renting, Kodiak Island Borough had the most expensive average two-bedroom apartment, at $1,434 per month in 2015.

Read More: Alaska Economic Trends May 2016
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