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Anchorage was named, "Best city for riding out a recession," by Business Week in 2010. This is clearly supported by the fact that for twenty years Alaska experienced uninterrupted growth from the 1980s to 2008. Though Alaska has experience a higher unemployment rate and a dip in home values since the 2007/2008 market crisis, 2010 and 2011 are showing promise for recovery, living up to the title from Business Week.
According to the AEDC, Anchorage has recovered from a higher unempoyment rate of 6.2% in 2010 to 5.8% in Septemer, 2011. There is promise with the low interest rates and the recovering employment situation that home values will stabilize. So, this is where we are today but let's looks to see why Anchorage and Alaska stay isolated from stormy economic weather.
The most significant factors that contribute to Alaska's stability are the higher wages across industries and tax advantages for businesses, individuals, and professional persons. The average retail worker would likely earn $12 per hour, which is significantly higher than the federal minimum wage. You can see this higher earning average across all industries. These higher wages offset the higher cost of living in Alaska.
Also, there are no sales tax in the Municipality of Anchorage and no individual state income tax. Also, corporate taxes are minimal compared to other states in the 'lower 48'. This tax climate for businesses make it very attractive for corporations to do business in Alaska, which brings more jobs, government services, and retail establishments to Anchorage.
Nearly 35% of the industry in Anchorage are government service workers and healthcare services. Hospitals, military installations, and other state and federal government agencies offer tremendous stability to the economic climate. 25% of workers opperate in the professional services and trade industries and the remaining workers service in other industries such as transportation and hospitality.
The Anchorage Economic Development Corporation surveys businesses in Anchorage to get an understanding of what businesses in Anchorage are optimistic of and what they fear may impact business. Compared to the last 3 years, businesses in 2011 are much more optimistic for their future businesses and earning than they had been. However, there are still concerns at the forefront of their minds impacting their decision. Health care costs, regulation changes, and the number of skilled workers available to work are concerns for everyone.
In the end, Anchorage will stand firm during this economic climate.
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