Overview of the Role of the Seafood Indus

in the Alaska Economy

Gunnar Knapp

Professor of Economics

Institute of Social and Economic Research

University of Alaska Anchorage

Prepared for

Economics 300: The Economy of Alaska

Updated March 2006
The seafood industry is very important to Alaska. 

• A major source of jobs and income• The most important source of income in many coastal 

communities.

• The only private sector source of cash income in many 

areas

• An important part of the tax base in rural Alaska• An important contributor to rural infrastructure and utiliti• A very important part of the culture and way of life of ma

Alaskans

• This may not be obvious if you stay in Anchorage. But 

obvious if you walk around any of dozens of Alaska coacommunities.
The Alaska seafood industry is a

more than $2 billion dollar industry.

• The “ex-vessel value”—the value paid to fishermen--wa

$900 million in 2001.

• About $1.3 billion in value was added in fish processing• The total wholesale value—the value of fish products so

processors--of Alaska seafood production was about $2in 2001.

• Both fishing and fish processing are large and valuable 

industries.

• The ex-vessel value and the wholesale value of Alaska 

varies significantly from year to year, due to variations in catches and prices. But even in years of lower value, thindustry is still very large and valuable.
Fishing and fish-processing employment and income is pa

important for rural Alaska

Map source: Alaska Division of Community Advocacy web site: http://www.dced.state.ak.us/cbd/seafood/seafoodprocessors.htm

Fish proceslocated in dcommunitiecoast and mof these plathe summersalmon. Otoperate yeathe most improcessing Harbor, KodPetersburg, 
Commercial fishing (“fish harvesting”) is not included in r

wage and salary employment statistics.

• This is because most fishermen are paid under a “share

system, in which they receive a percentage of the catch 

• Catch shares are not considered “wages” or “salaries.”

• Alaska employment data show a small number of wage 

salary jobs in “fishing.” Keep in mind that this is only a sfraction of total fishing employment. 
Here is an example of how crew were paid on two Kodiak crab b

2003. On each boat, the captain received about 15% of net incom

experienced crewman received 6.5% of net income. On the boa

caught more fish, the captain and crew earned more mone

Example of Where Gross Earings Went for Two Kodiak Vessels in 2003 

$0

$50,000

$100,000$150,000$200,000$250,000

Vessel A Vessel B

Taxes, Fuel and Bait 

were deducted from 

gross to calculate net 

income

Net income was 

shared between the 

vessel owner and the 

crew. (The crew was 

charged for groceries.)

The crew was paid 

41% of net income.
Estimates of fishing employment are available.

• The Alaska Department of Labor recently began to estim

commercial fishing employment.

• They start with data on the number of fishing boats whic

(deliver) fish each month in each fishery.

• They then multiply the number of landings by assumed 

crew sizes for boats in each fishery. 

• This gives an estimate of the number of months worked 

fishery.

• Many people work only part-time in commercial fishing—

example, during the summer.

• To calculate “annual average employment” they divide t

number of months worked by 12.
The Alaska Department of Labor estimates that there wer

6700 “full time equivalent” jobs in fish harvesting in Alaska 

Source: Michael Patton and Dan Robinson, “Employment in the Alaska Fisheries,” Alaska Economic Trends, February 2006. 
Salmon accounts for the largest share of fish harvest

employment, followed by groundfish and halibut. 

Source: Michael Patton and Dan Robinson, “Employment in the Alaska Fisheries,” Alaska Economic Trends, February 2006. 

Estimated Fish Harvesting Employment by Species, 

2004
Fish harvesting employment is concentrated in the south

region (mostly Bristol Bay, the Aleutians and the Alas

Pensinsula), the Gulf of Alaska region, and Southeast Al

Source: Michael Patton and Dan Robinson, “Employment in the Alaska Fisheries,” Alaska Economic Trends, February 2006. 
Permit holder and crew licenses provide another source of data 

Alaska commercial fishing. To work on a commercial fishing bo

have to either be a fishing permit holder or a crew license ho

The number of permit holders and crew licenses provides a meas

number of people who PARTICIPATE in commercial fishing. (Si

of them work only part of the year, “annual average employment

less than participation).

Number of Permit Holders and Crew Licenses, 2002

Total 19,556 10,175 2Crew licenses 8,493 6,364 1Permit holders 11,063 3,811 1

Alaska residents Non-residents Total
Many of the people who fish commercially in Alaska are 

residents, mostly from Washington State and Oregon. Th

the boats and the more valuable the fishery, the greater t

resident share of fishermen tends to be. 

Overall, about 40% of the total ex-vessel value of Ala

commercial fisheries is paid to non-residents.

Some people think that since so many fishermen are 

residents, fishing is less important. I consider this the “glas

empty” perspective. If we just look at the number of Al

residents who fish, it is still a very large number. This is th

is half-full” perspective.
A fishing boat at Dutch Harbor. This boat is from Newport 

This is a trawl fishing boat, which fishes for pollock in the Be
Seafood processing is another major employer.

About 20,000 people work in seafood processing in Alaska, of 

about 14,000 are non-residents and about 6,000 are Alaska

Many of the workers in the seafood industry, particularly in re

“enclave” processing facilities, are from foreign countries, inclu

particular the Philippines, Mexico and Central America. In recen

these people have been more willing to do this kind of hard and 

work for relatively low hourly wages (although workers can ear

wages by working a lot of overtime). You may often see foreign-

processing workers at the Anchorage airport, traveling to or from 

canneries (fish processing plants).

Like fishing, seafood processing is a highly seasonal industry. 

average employment in seafood processing is about 7,40

Workers 5,714 14,268 19

Number of Workers in the Alaska Seafood Processing Industry, 2001

% of workers 29% 71% 10

Alaska residents Non-residents T
Safety warnings in a Dutch Harbor fishing plant—in many 

languages!
Workers processing halibut at a Dutch Harbor fish processi
The seafood industry accounts for only 6.6% of Alaska statewide private 

employment. But it accounts for a much larger share in coastal areas. In s

Alaska, it accounts for more than half of private sector employment

Source: Michael Patton and Dan Robinson, “Employment in the Alaska Fisheries,” Alaska Economic Trends, February 2006. 

Seafood Industry Share of Private Sector Employment, by Region of Ala

All other 93.4% 86.0% 81.6% 

Seafood processing 3.7% 5.9% 10.6% 

Fish harvesting 2.9% 8.1%% 7.8% 

Statewide Southeast Gulf Coast 
How two Alaska Department of Labor Economists charac

importance of commercial fishing to coastal Alas

“These [employment] numbers, as high as they are, under

importance of fishing to the three regions. The millions of dolla

value paid to commercial fishermen support a substantial po

remaining private sector in these regions, especially in Southw

Other than a small amount of mining employment, fishing is th

region’s only basic sector employer. The remaining private e

consists of industries such as retail trade, construction and hea

provide goods and services to the local population

It’s no exaggeration to say that many Southwest Alaska comm

others scattered throughout Southeast Alaska and the Gulf Co

would virtually disappear without fishing.”

Source: Michael Patton and Dan Robinson, “Employment in the Alaska Fisheries,” Alaska Economic Trends, February 2006. 
“Commercial fishing, like many industries

in Alaska, is highly seasonal when the total

job count is considered. A closer look, however, 

reveals that most of the seasonality comes from the 

salmon fishery, and that both the groundfish and

halibut fisheries provide a relatively constant

stream of jobs over much of the year.

What’s more, high January and February

employment in the crab fishery fills in during

two of the three months when there is very

little halibut fishing activity.

Overall, Alaska’s fisheries provide a considerable 

number of jobs in every month but December.

The Southwest region’s massive summer

salmon runs amplify its seasonal pattern of

employment, while in the Southeast and

Gulf Coast regions, the distribution is a little more 

even. Southwest Alaska regularly goes from having 

no salmon harvesting employment at all in the first 

five months of the year to as many as 10,000 jobs 

during the peak months of the summer.”

Source: Michael Patto“Employment in the AlaEconomic Trends, Feb
The seafood industry contributed $686 million to Alaska Gross 

Product in 2003—about 2.1% of total GSP. This was higher tha

(1.7%) but much less than Oil and Gas Extraction (16.5%

$552 millio

$5,243 millio

$361 millio$325 millio

$25,436 millio$31,704 millio

Contribution to Alaska Gross State Product, 2003

(Source: Bureau of Economic Analysis, www.bea.gov)

Mining, except oil and gas Oil and gas extraction “Food product manufacturing” (mostly fish processing) “Forestry, fishing and related activities” (mostly fishing) 

Private industry total Total Gross State Product 
Seafood Industry Taxes

• The seafood industry pays a wide variety of taxes.• Most taxes are calculated as a % of ex-vessel value (va

to fishermen)

• The bulk of seafood industry taxes are from the fisherie

business tax, paid by processors at a rate of between 3

5% of ex-vessel value (depending on the products prod

• The fisheries resource landing tax is a similar tax collec

fish processed by floating processors operating outside three-mile boundary for state waters.

• More than half of the fisheries business tax and the fish

resource landing tax is passed through by the state to thcommunities in which the fish are landed—and is a very important source of revenue for these communities.

• The salmon enhancement tax is collected from salmon 

fishermen in some regions to pay for part of the costs of hatcheries. 
In FY05, fisheries taxes totaled $37.85 million, of which the state 

slightly more than one third.

Alaska Fisheries Taxes, FY 2005

(Source: Alaska Department of Revenue, Revenue Sources Handbook, Fall 2005

Subtotal $23

TOTAL $37

Subtotal $1

AVAILABLE FOR STATE SPENDINGSalmon enhancement tax (aquaculture association share) Fisheries resource landing tax (municipal share) Fisheries business tax (municipal share) $1PASSED THROUGH TO OTHER RECIPIENTSFisheries resource landing tax Fisheries business tax (to state) $