The IBEW and the Alaska State Employees Association—both of which represent thousands of government workers–have endorsed “Yes” ballot measure 1, to repeal the oil tax. Meanwhile, four trade unions – Teamsters Local 959, Plumbers & Pipefitters United Association Local 375 in Fairbanks, Operating Engineers Local 302 and Laborers Local 942 –have urged voters to vote “No” on the repeal. Those unions get substantial amounts of work from the oil fields.
The debate is complex. Production curves. Rates of return. New versus old production. Legacy fields versus non unitized areas. Personalities and conflicting numbers. All of these things and more add to the stew that’s makes up the oil tax debate.
But the public union endorsements add to my suspicion that at its heart, the most recent incarnation of the fight over oil taxes—a fight that the state has been having since Prudhoe was discovered in 1968—is really more simple than all of this. When you get down to it, the biggest elephant in the room lives in the state coffers, where it involves, among other weighty things, public employee versus private sector jobs. And that’s an elephant that few, at least in government, want to talk about.
If my suspicion is correct, then the whole shebang is less about numbers and facts than it is about the basic struggle between aspects of human nature and economic systems, a struggle the world has been having since we emerged from feudalism and discovered capitalism. Namely, how is capital best deployed? If there’s about $1 billion or more at stake, as those who advocate for repeal say there is, in whose hands is that money better placed?
Do we give it to industry and trust it will use it to hire Alaskans, create jobs and grow the economy, which is the whole point and which it hasn’t always done? Or do we keep it and trust the politicians to spend it wisely to try to build a sustainable economy, which we all know they haven’t always done? With oil production decreasing so precipitously—75 percent since 1989–do we have any choice?
In any case, and no matter what happens in Tuesday’s primary vote, the state has a big government problem,that no matter who’s in charge, continues to grow and at some point is going to have to be addressed.
Since oil prices began to rise in 2002, there is no doubt that state government has been flush. But who has benefited most from bulging state coffers, the majority of which are paid for by the industry? In a state with no broad-based income or sales tax, who benefits most from private sector jobs?
Whose fair share are we really talking about when we talk about our fair share?
In 2013, there was an annual average of 335,800 non-self-employed jobs in the state. Of that, 82,700 were government jobs. That means that a little over 24.9 percent of total jobs in Alaska were government jobs, a percentage that dwarfs any other single category of workers in the state. That doesn’t account for all the hundreds of businesses in the state that are propped up by government contracts.
The national average percentage of government jobs to all employees was about 16 percent. Only Wyoming beats Alaska in percentage of government workers.
About 14,100—or about 4 percent of the population– worked in oil and gas in 2013.
Here’s a chart from the U.S. Bureau of Labor Statistics, which shows government employment in Alaska since 1990. It should be noted that the recent downtick represents a loss of federal government jobs, not state or local jobs:
If the oil tax is repealed, how are we going to pay for all those government workers if the oil companies make good on their indications that they’ll slow down production?
And if the oil tax isn’t repealed? What then? Are we all content to live in a conservative, anti-government state, where a full quarter of all workers are working for government and are getting the kinds of salaries and benefits that most of us can’t have?
The issue is so much bigger and potentially more painful than oil taxes. And none of our leaders, nor those who want to lead, are talking much about it.
Contact Amanda Coyne at email@example.com