Business

Just 100 feet under the surface of the Bering Sea, a thin 2-inch-wide cable silently pulses on the seafloor. A flurry of ones and zeroes flash through the cable at near-lightspeed, carrying with it social media posts, Zoom meetings and medical records.

This is Quintillion’s Arctic fiber network, which stretches north from Nome all the way to Prudhoe Bay. There, it meets up with a landline that runs down to Fairbanks and on to the Lower 48. But for coastal communities south of Nome, there’s nothing like it.

Quintillion’s director of operations, Art Paul, said the telecommunications company is taking steps toward changing that.

“So Nome, Kotzebue, everywhere north of them gets to use that fiber pathway. We recognize there’s more customers to serve, of course, in the southwest,” Paul said.

For all the good subsea fiber brings – blazing fast speeds and low latency – it comes with its own challenges. The thin armored cables span hundreds of miles on the seafloor, where they’re susceptible to line breaks.

So what happens if a cable does break?

In June 2023, a cable scoured by sea ice 34 miles offshore of the North Slope took Quintillion’s entire Arctic fiber network down. Utqiaġvik, Wainwright, Kotzebue and Nome were all taken offline.

Paul said that this new project will complete a ring around Alaska, giving Quintillion the ability to simply send traffic the opposite direction should another line break occur.

“In the future if there’s an ice scour event or a boat anchor event, we can reroute traffic the other direction,” Paul said. “So never again will those communities be stuck while our ship mobilizes from the Lower 48 to replace that fiber break.”

The new route will stretch from Nome to Homer, where five subsea cables already convene. Paul said Homer’s established infrastructure and port makes it an ideal end point for the new, 950-mile-long cable.

“It’s an ice free port, so it’s a pretty easy place to to do business. But primarily it’s because the other cables land there, it’s kind of a hub for fiber in Alaska,” Paul said.

Quintillion plans to begin construction this summer with help from its new partner, Xtera Inc. The Texas-based company signed a $77 million agreement last November to provide procurement and expertise for the network.

Quintillion said it expects to invest $61 million of its own capital for the project and estimate the total cost to be around $150 million. Construction of the Nome to Homer Express is expected to wrap up by late 2026, with the network operational by early 2027.

Alaska is expected to have moderate job growth in 2025, with the construction and oil and gas sectors forecast to be the big winners and seafood processing seen as the biggest loser.

Statewide job growth is forecast to be 1.6%, with 5,300 jobs added, according to the analysis published in Alaska Economic Trends, the monthly magazine of the Alaska Department of Labor and Workforce Development’s research and analysis section.

Alaska’s rate of job growth slightly outpaced that of the rest of the nation starting in 2023, and that is expected to continue this year.

“Alaska is still pretty steady as she goes, as far as how many jobs we’ve been adding back every year, but nationally it’s slowed down,” said Karinne Wiebold, the state labor economist who wrote the article detailing the statewide employment forecast. The rest of the nation emerged from the COVID-19 pandemic a little quicker than Alaska did, she said.

The dominant job-growth sector — construction — will continue to have robust increases this year, thanks in large part to federal funding from the Infrastructure Investment and Jobs Act of 2021, according to the forecast. Another 1,500 jobs, a 7.9% increase, is expected this year in that sector, according to the forecast.

Overall, by the end of the year, Alaska construction employment is expected to have grown by  over 25% from 2019 to 2025, the forecast said.

The health care sector, one of the state’s biggest employers, is expected to gain 1,000 jobs, or a 2.9% increase over 2024, the forecast said.

The oil and gas sector is expected to gain 600 jobs in 2025, for an increase of 7.4% from 2024 levels. Total employment in the sector is expected to average 8,700 jobs a month.

Still, that is below the 9,900 average monthly oil and gas jobs in 2019 and well below peak employment in that sector in 2014, which averaged over 14,000 jobs.

Wiebold said Alaska oil and gas employment and the industry’s situation in general have been volatile in recent years, with the pandemic playing a role. The decline after 2014 signaled the start of an Alaska recession, though oil and gas jobs started to rebound in 2019. “And then 2020 changed the demand so much for oil that everything just kind of turned a little bit on its head,” she said.

Possibly affecting employment now is the mature state of many fields, which may not need as many people to operate as they did in the past, she said.

The seafood industry, which dominates Alaska’s manufacturing sector, is forecast to be the biggest job loser this year.

Statewide, the manufacturing sector is expected to have 5% fewer jobs in 2025 than in 2024, according to the forecast. That would follow a 6.3% decline in 2024 from the year prior, according to the department.

Seafood processing, like the seafood industry as a whole, is facing difficult straits, with plant closures or operation reductions, low prices and, in some cases, dwindling fish runs. Those problems are not expected to be alleviated in the immediate future, according to the forecast.

Other constraints on Alaska’s employment and economic picture could come from federal budget cuts, the forecast said.

Wiebold said budget cuts should not affect federally funded infrastructure projects – for now. Money from the infrastructure bill has already been allocated, she noted.

However, that infrastructure funding is not unlimited, and there will be a sunset eventually, she said. “This is a discrete period of time,” she said.

Federal budget cuts could hurt Alaska employment in other ways, she said. Officials with the incoming Trump administration have expressed plans for big cuts in the federal workforce. That affects Alaska, where federal government jobs are important in the economy, she said.

“It might take a little bit, but there are going to be downward pressures on federal employment in Alaska,” she said.

Dan Robinson, chief of the department’s research and analysis section, cited the fundamental challenge that threatens economic growth in Alaska: shifting demographics.

“We’ve got some economic trends that are creating job growth. But unfortunately, too, we’ve got this long-term issue,” he said.

Between 2013 and 2023, Alaska lost 34,000 residents in their prime working ages, 18 to 64, Wiebold’s article noted.

That is a cloud hanging over the state’s economic future, the expected 2025 growth notwithstanding, Robinson said.

“We would have more growth available to us if the workforce issue weren’t the constraint that it is,” he said.

There are multiple reasons for the losses.

The state just completed its 12th straight year of net outmigration – with more people moving out of the state than moving in, by far the longest such streak on record. Several factors are combining to make the state less attractive to potential newcomers, Robinson said.

“Nobody should forget that there’s something that’s off a bit in the desirability of people to make Alaska their home,” he said.

Alaska’s population is also aging rapidly. Though Alaska’s population is younger than those of most states, it is aging the fastest, by some measures. The per-capita senior population grew faster in Alaska than in any other state, and the number of Alaskans 60 and older increased by two thirds from 2010 to 2022, according to state officials’ analysis.

Birth rates have slowed over recent years, meaning fewer young Alaskans growing into ages when they can hold jobs, the forecast noted.

The Alaska Economic Trends January issue also describes how employment patterns are expected to vary by region in the coming year.

Anchorage, for example, is not expected to gain any oil and gas jobs, even though employment in that sector is forecast to increase significantly.

“We see these being oil field jobs, not headquarters, which is more of how you think about Anchorage,” Wiebold said. Additionally, the role of the state’s biggest city as an oil and gas headquarters has changed in recent years, she said. One big factor was Hilcorp’s acquisition of BP assets, which ultimately shrank the city’s oil industry workforce, she said.

In the Fairbanks North Star Borough, the transportation, warehousing and utilities sector is expected to have the biggest percentage increase in jobs, at 8.3%, according to an article in the magazine focused on that community. Fairbanks is a regional hub, and Amazon has opened a facility there, notes the article, also written by Wiebold.

In Southeast Alaska, tourism is the bright spot for expected job growth, according to an article focused on that region and written by Robinson. Employment in the leisure and hospitality sector is expected to grow by 6.5% in 2025, and the 300 jobs in that sector represent half of the expected 600 new jobs in the region this year.

Alaska had a record cruise ship year in 2024, with the number of visitors now estimated at about 1.8 million, according to industry data used for the forecast. Near-record cruise visits  are expected this year, according to the forecast.

The 1.8 million figure is higher than totals reported previously. The revision comes from information from the industry about more passengers being carried aboard each ship, with higher occupancy rates in berths, Wiebold and Robinson said.

Construction employment is expected to grow in Southeast Alaska, according to the forecast. But the impact has been a bit muted compared to the rest of the state.

Robinson said the Infrastructure Investment and Jobs Act has had less effect up to now on Southeast Alaska than on other parts of the state, for reasons yet to be understood. And much of the construction growth expected in the near future is related to North Slope oil development, which has some effect on Anchorage and Fairbanks businesses and jobs but does not really touch the Southeast part of the state, he said.

The number of American Indian and Alaska Native-owned businesses in the United States declined by more than 2% from 2021 to 2022, though those businesses enjoyed a 44% increase in receipts, an 8% increase in employees and a 13% increase in employee payroll, according to U.S. Census Bureau estimates released on Dec. 19.

The bureau’s 2023 Annual Business Survey, which covers reference year 2022, showed there were 47,519 American Indian and Alaska Native-owned businesses that year with $78.5 billion in receipts, 333,153 employees and about $14.6 billion in annual payroll in 2022.

The survey also found that the number of Native Hawaiian and other Pacific Islander-owned businesses increased by nearly 15% from 2021 to 2022, from 8,324 to 9,552. Those businesses saw a more than 31% increase in receipts from $10.5 billion to $13.8 billion, a 29% increase in employees from 53,277 to 68,795, and a 28% increase in annual payroll, from $2.5 billion to $3.2 billion.

Overall, the Annual Business Survey found that the number of U.S. businesses from 2021 to 2022 held steady at 5.9 million, while minority-owned businesses increased 8% from 1.2 million to 1.3 million, veteran-owned businesses declined by 10% from 304,823 to 273,542, and women-owned businesses remained around 1.3 million.

Other findings from the Annual Business Survey include:

• Veteran-owned businesses had an estimated $884.5 billion in receipts, 3.2 million employees, and $179.7 billion in annual payroll.
• Women-owned businesses had an estimated $2.1 trillion in receipts, 11.4 million employees, and $508.5 billion in annual payroll.
• There were an estimated 650,680 Asian-owned businesses in the United States in 2022, an estimated 144,141 (22.2%) of them were in the Accommodation and Food Services sector. Asian-owned businesses had the largest estimated receipts ($1.2 trillion) among minority race groups.
• There were an estimated 194,585 Black or African American-owned businesses, with $211.8 billion in annual receipts, 1.6 million employees and about $61.2 billion in annual payroll. About 49,872 (25.6%) of them were in the Health Care and Social Assistance sector.
• The number of Hispanic-owned businesses grew about 14.6%, from 406,086 in 2021 to 465,202 in 2022, and made up about 7.9% of all U.S. businesses with an estimated $653.5 billion in annual receipts, 3.6 million employees, and approximately $143.2 billion in annual payroll.

ICT originally published this article. ICT is an independent, nonprofit, multimedia news enterprise. ICT covers Indigenous peoples.

The PeaceHealth Ketchikan Medical Center Emergency Department is staffed 24 hours a day, and for many services, it’s the only option on the island. The medical center is a “critical access hospital” — if patients arrive badly hurt, the goal is to stabilize them until they can get them to a bigger hospital in Seattle or Anchorage. It’s often a critical step in keeping people alive.

Recently, though, emergency room physicians went multiple months without pay, and to some, the future of services seemed uncertain. Sarah Hines, a nurse practitioner in the PeaceHealth emergency room, said the physicians received an email at the end of October saying payroll would be late.

“Then I found out by just talking to the other providers that they weren’t getting paid at all,” Hines said. “So they had been working for free since the end of August. And additionally, NES couldn’t provide them with proof that they had medical malpractice insurance.”

NES Health was a third-party firm that staffed PeaceHealth’s emergency department. Jared Kosin, CEO of the Alaska Hospital and Healthcare Association, said companies like NES are basically a one-stop staffing shop — the hospital pays a fee and the agency provides a group of physicians. They also provide malpractice insurance, which is extremely risky for an emergency physician to work without.

“The group still becomes integrated in the community, but it’s a way of basically contracting for services and having them take care of the recruitment and supply of the physicians, the billing, all of that stuff,” said Kosin, whose non-profit represents and supports hospitals across the state.

Kosin explained that it is “very normal” for hospitals to contract with third-party staffing firms, especially medical centers in rural or remote locales.

The California-based company staffed around 35 ERs across the country — everywhere from Ketchikan to Texas to Philadelphia. At the end of October, they sent those hospitals scrambling when they announced that they didn’t have the money to pay their doctors.

In the October email from CEO Jose Aguirre’s office, NES blamed the missed paychecks on transitioning to a new billing company. It’s just a “temporary shortfall,” they said. “Rest assured that everyone will be paid and made whole.”

But that never happened.

Instead, Aguirre and the firm’s chief medical officer soon resigned. At the end of November, they sent a brief saying the company would “wind down its operations and cease doing business.”

Hines said at this point, there was a deep sense of unease among the staff.

“I mean, that’s just dangerous for them, because that’s their whole livelihood at stake,” Hines said. “And then we have some new providers who just recently moved to Ketchikan to cover and help us out. They were going to be long-term providers here, and they can’t pay their bills.”

Kosin said for physicians and hospitals, the situation was dire.

“That’s a huge deal, right? If you’re not getting paid for doing your job, that affects your livelihood, and ultimately can affect your ability to be there and be present in that situation,” he said.

Some hospitals across the country did have to suspend services and shut down their emergency rooms in recent weeks due to NES’s closure. In Ketchikan, though, emergency room physicians and staff kept working — without pay.

“They can’t pay their bills if they don’t have payment,” said Hines. “I know these physicians really want to stay here and they want to provide for the community, but their hands are kind of tied right now because of NES.”

Could PeaceHealth have stepped in to pay the physicians in the interim? According to Kosin, the laws around how doctors get paid could complicate that.

“I think there would be a lot of compliance and analysis that would have to be done to make sure everything is being done in a way that complies with all the rules and regulations that are in place at the federal level,” he speculated.

PeaceHealth Ketchikan’s Communications Manager Kate Govaars confirmed that in an email, saying that “Due to legal limitations, PeaceHealth is not able to provide coverage for work done under NES.”

In mid-November, the physician’s group entered into an agreement with the hospital to keep working. A staff member who wanted to remain anonymous provided KRBD with a screenshot of a clause in the contract addressing the unpaid wages. It said PeaceHealth “desires and intends to provide additional compensation to [Physician] in recognition of uncompensated services [Physician] provided at the Hospital.” However, the contract said that the compensation for wages lost under NES was not “addressed in this Agreement.”

The Ketchikan Medical Center is one of ten hospitals operated by PeaceHealth. The not-for-profit healthcare organization operates hospitals and clinics across the Pacific Northwest.

In an email, Govaars confirmed PeaceHealth extended contracts that covered malpractice insurance and compensation, but Govaars said she couldn’t comment on the new contract or any additional agreements because “The nuances of individual contracts gets into personnel maters [sic], which PeaceHealth holds confidential.”

Govaars also wrote that PeaceHealth is committed to keeping the emergency room open and that hospital leaders “care deeply for our staff and value the care they extend to the community.”

“This group we have now is just fantastic,” Hines, a six-year Ketchikan resident, said of the current ER physicians. “They’re really good, and our community would really benefit by keeping them here. The problem in Ketchikan is we just don’t have a pool of people to pull from.”

Hines said the physicians’ last payment from the staffing firm came at the end of September, for the work they did in August. By the time PeaceHealth started paying them at the end of November, the Emergency Room staff were out two and a half months of wages, with no guarantee they’d ever see that money.

The Skagway News is once again looking for a new owner. Gretchen Wehmhoff bought the paper in 2020 and is now looking to sell.

“So back in 2019 the owner at the time, Larry Persily, decided to offer it to someone who was from Alaska, who he thought would care about the community,” Wehmhoff said. “And my friend at the time, Melinda (Munson), and I decided to apply.”

So the two journalists bought the paper in the spring of 2020. The price?

“Twenty dollars,” Wehmhoff said. “He was going to give it to us for free, but we thought we should give him something. You know, you have to give something. So we gave them $20 and that first check bounced.”

Persily, the former owner of The Skagway News, advertised the paper to multiple potential buyers around the country, but was looking for someone he could trust.

“I got talked into it, got new staff, got some equipment, tried to get it closer to break even and then decided I want to give it away,” Persily said. “I don’t want to run it. I just want to see it continue. And no one could afford to buy it. So the idea was, find someone who will run it, own it, love it, live in Skagway — and I’m essentially giving it away. Got about 140 inquiries from around the world, and picked a couple people from Alaska and turned it over to them.”

Persily has been involved in Alaska journalism for decades. He also owns the weekly newspaper in Wrangell, the Wrangell Sentinel. He says running a weekly newspaper is, “A lot of work, and no money.”

“They are economically challenging,” he added. “How’s that for a euphemism. They take seven days a week, a lot of stress, a lot of sweat, a lot of anguish, and they’re not profitable. Some pay their own way. Some don’t even do that. It’s tough.”

After five years of running the paper, Wehmhoff has made the difficult decision to sell.

“You know, if I had reporters that were freelance or free, I probably could keep going,”
Wehmhoff said. “But unless I can get some freelance writing that doesn’t cost any money, it’s kind of tough. I mean, I can make a choice. I can write or I can layout the paper. Or I could do the business end of the paper. But doing all three, and then not bringing in any income for myself has been hard on me financially, as well as health wise.”

But Wehmhoff remains optimistic, saying that she hopes the new owner has a lot of energy and is willing to listen.

“I think the biggest struggle will be to remember to go to Skagway and listen to Skagway,” she said. “To really, you know, pay attention to what Skagway needs and what Skagway wants. I hope that the idea of still being very inclusive of residents of Skagway is part of it. I think it’s really important that we still look at it that way, that it doesn’t just become an advertiser, but it maintains its beauty of being a small town paper.”

And Persily has the same hopes for his old business.

“I hope she can find someone who will live in Skagway, put out a good paper, find a way to pay the bills and really live happily ever after. That was my intent four years ago. Didn’t work out.”

With multiple setbacks of trying to run a weekly paper remotely through a pandemic, Wehmhoff says she has no regrets of owning The Skagway News.

“I don’t regret for a second my decision to get involved with Skagway News,” she said. “Every single time there, it has been one of the most adventurous and exciting and challenging five years. Whether I was sick and I couldn’t do something, or whether it was emotionally draining, I do not regret for a second my decision to become an owner of The Skagway News. It’s been a real pleasure and joy. And I’d do it again.”

Wehmhoff said she will publish a formal press release in the near future.

Alaska seafood processors hired fewer people in 2023 but paid them more and relied more on nonresidents to fill the jobs, a state analysis shows.

The employment trends are what would be expected in an industry struggling to find workers, said Dan Robinson, the state economist who wrote the analysis for the Alaska Department of Labor and Workforce Development’s monthly magazine.

“I do think the reason for that is just they’ve had to work harder to get workers and to pay workers more to come there,” said Robinson, the department’s research chief and author of the article in the November issue of Alaska Economic Trends.

The number of Alaska seafood processor jobs totaled 8,495 in 2023, about 20% lower than the total in 2014, the analysis shows. At the same time, according to the analysis, total pay to processing workers of $626 million last year was about 30% higher than the aggregate pay in 2014, calculated in 2023 dollars, of $482 million.

The average monthly wage for seafood workers in 2023 was $6,100, exceeding the statewide average of $5,700 for all workers, the analysis found.

Processing workers made more money, despite myriad woes afflicting the Alaska seafood industry, including market erosion, low fish prices and rising costs.

It is not clear whether the inflation-adjusted increase in processor workers’ earnings was from higher base pay or from increased overtime pay, Robinson said. The department does not have the information needed to make that distinction.

Increased earnings of either type, along with the smaller jobs total, point to the same underlying cause, he said.

“Lower employment, higher wages, that smells strongly of difficulty finding enough people and having to pay them more,” he said.

Nonresidents made up 82.3% of the seafood processing workforce in 2023, according to the department’s analysis. Nonresidents have long made up the majority of seafood processor workers, but  the proportion has crept up in recent years, from about three quarters from 2014 to 2018 to over 80% since 2021, according to the analysis.

Workers from outside the United States have also been important to the industry, but the numbers who are employed through a special visa program vary by year. In 2023, the U.S. Department of Labor’s Employment and Training Administration certified Alaska employers to hire 825 workers under the federal H-2B visa program, which is commonly used for the seafood industry. Of the authorized positions, 554 were for seafood processing workers, according to the state analysis.

It is unclear whether all 554 spots were used by the seafood industry, Robinson said.

In some years, there are far fewer seafood processing workers hired through these visas. In 2014, for example, the federal Department of Labor granted only one company’s request to hire workers under the H-2B program, and only 20 workers were authorized, Robinson’s analysis said.

Yet to be determined by the state Department of Labor and Workforce Development is the full impact of seafood plant closures that have roiled some coastal communities.

A particularly devastating closure came this year at the seafood plant in King Cove. The plant has operated for more than a century and has long been critical to that Alaska Peninsula community’s economy and its main source of local tax revenue.

Robinson said the Department of Labor and Workforce Development does not yet have all the information needed to analyze this year’s seafood processing employment.