Alaska rural-urban cost of living gap widens
by Christopher Eshleman / ceshleman@newsminer.com
3 months ago | 2696 views | 23 23 comments | 12 12 recommendations | email to a friend | print
State lawmakers were told Thursday that the convenience of large retail stores is believed to be keeping the cost of living down in urban areas compared to the communities without highway access. — Sam Harrel / sharrel@newsminer.com
State lawmakers were told Thursday that the convenience of large retail stores is believed to be keeping the cost of living down in urban areas compared to the communities without highway access. — Sam Harrel / sharrel@newsminer.com
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FAIRBANKS — It always has cost more to live in remote, rural communities than in Alaska’s larger cities, but the gap has widened in the past quarter century, a statewide survey has found.

According to a report attached to the figures, released in May, it costs 3 percent more to live in the Fairbanks area then it does in Anchorage. That’s roughly the same difference as in the mid-1980s, the last time a similar cost-of-living study was completed.

But in Barrow, Bethel and the Aleutians, life is at least 50 percent more expensive than in Anchorage. Those rural-urban gaps in cost of living are up by 10, 14 and 23 percentage points respectively from the previous analysis.

The project, led by the Juneau-based McDowell Group, stems from a work group formed two years ago by then-Gov. Sarah Palin. The group sought to propose ways to make Alaska a more competitive employer as aging work forces and early retirement trends create challenges for employment recruiters.

If the Legislature acts, the study could have a big impact on how much public workers get paid across the state.

Jim Calvin, a consultant with the McDowell Group, told the House Finance Committee on Thursday that “highway access was a critical, critical component” in determining differences in costs of living across Alaska. He said the widening differences in cost of life between urban and rural areas also could be partly because of expanding retail markets in Anchorage and Fairbanks, which have pushed shopping costs downward.

“Rural Alaska has enjoyed none of those benefits,” Calvin said. He said increases in home heating and fuel costs generally hit rural areas, where home heating accounts for a larger share of household spending, harder than urban communities.

The $400,000 project weighed the relative importance of housing, food, transportation and other costs between communities. Data from the project, completed early this year, comes from a survey of thousands of homes and businesses across the state.

The state started using a place-specific cost of living index system in 1961 when drafting union labor contracts. That index, applied by election district, was last updated in 1985.

Kevin Brooks, a deputy state administration commissioner, said any legislative changes would affect workers who work outside union contracts. Changes to union employees would need to follow negotiations with labor groups, he said. The state would try to use the figures to iron out cost-of-living indexes, which are used inconsistently for public workers even within the same community, Brooks said.

Any legislation wouldn’t directly impact school district teachers, but teacher unions could use the numbers when negotiating contracts, Brooks said.

Administration Commissioner Annette Kreitzer told the committee that Gov. Sean Parnell has made no specific recommendation that the Legislature implement the proposed changes. But the consultants recommended the state update cost indexes more regularly as “differen(ces) do change over time, especially in remote areas,” according to a summary of the report.

The McDowell Group worked with firms in Oregon and Washington to survey retail outlets, companies and more than 2,500 households for the project.

Contact staff writer Christopher Eshleman at 459-7582.

comments (23)
« LostAlaskan99712 wrote on Saturday, Nov 07 at 05:30 AM »
"give everything back and we'll leave you alone so you can return to your peaceful and honorable existence!"

Ok, stop using our trails (major roads), give us our traditional hunting grounds back, demolish and remove all dams, stop deforesting the wilderness- and we might think about it, lol.
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« LostAlaskan99712 wrote on Saturday, Nov 07 at 05:23 AM »
"If you want to improve rural areas, stop the drug dealers."

"rural areas"??? riiiight, like Meth-Pole doesn't exist or somehow doesn't count. Is youknoit actually trying to say there are more drugs in the bush than Fairbanks/Meth-Pole?
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« LostAlaskan99712 wrote on Saturday, Nov 07 at 05:18 AM »
"It is more expense to live in an urban area"

Obviously you've never lived in a "rural" area before, otherwise you'd still be out there (since it's, according to you, so "easy").
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« Navin wrote on Saturday, Nov 07 at 02:52 AM »
Only very, very stupid people put any credence in this study. It has many flaws. For example, energy cost differences between Anchorage and Fairbanks are obviously not correctly computed.

The study purports to measure differences between urban and rural areas. Fairbanks is averaged in as an urban area, as if Fairbanks residents can shop at the local anchorage dollar store!

The best approach to this piece of old news from last May is to ignore it completely.
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« youknowit wrote on Saturday, Nov 07 at 01:29 AM »
There are other items that off set the expensive costs:

Energy assistance for oil or wood. Some residents get more than they can use.

Food Stamps.

Hunting and fishing for their food.

Walking, shorter distances to walk.

Cutting and hauling their own wood.

Huge corporation dividends.

It is more expense to live in an urban area. They survive very well in the rural areas. Whoever is doing these studies are clueless. If you want to improve rural areas, stop the drug dealers.
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« Pearl=W wrote on Friday, Nov 06 at 11:50 PM »
MJHemple - I wouldn't say it's THE most prolific, though it's certainly right up there. A lot of people are likely to confuse hemp with 'consumable'/intoxicating varieties of Cannibus sativa [sp?], which are kind of 'hot-house' plants.

When I 1st rented a place on Murphy Dome Rd many yrs ago, a previous occupant had apparently dropped a seed or 2 of some variety of Cannabis, which had then been raked into a pile of birch and aspen leaves, left to decompose in a drainage ditch. The resulting heat of decomposition resulted in germination, and this little baby grew to well over five foot tall, without any encouragement or tending of any sort, even though it was in a very shady location. Of course it never flowered, since the species requires specific daylight hours to bloom [like daffodils], that occur after frost has set in, in the interior of AK, but it definately made a lot of fiber/bio-mass.

The production of hemp seed, though a very usefull product in many ways, is unlikely to be feasible in interior AK, because of the daylight requirements of flowering. However, hemp fiber/bio-mass production is quite possible, as far north as Mruphy Dome Rd, I can personally attest. But I think it possible, that in this climate, fireweed, willow, and aspen might all beat it out for productivity.
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« MJHemple wrote on Friday, Nov 06 at 10:44 PM »
Plenty of stuff grows up here, Isanova. Have you ever been to the Tanana Valley Farmers Market? We have plenty of time and space in Alaska to grow enough hemp in the summer to keep people busy manufacturing the raw materials into thousands of usable products during the winter. Canada is already a decade ahead of us. North Dakota has legalized industrial hemp as well. Heck, it's even legal and helping lift people out of poverty in China. http://www.china.org.cn/government/local_governments/2009-04/15/content_17607198.htm

We're supposed to be the land of the free, yet we're not even allowed to grow the most prolific, versatile plant on the planet. Our government is even more oppressive about it than Communist China. That's a pretty sad state of affairs in the ol' USofA. Growing, manufacturing, and using industrial hemp products would be incredibly beneficial to the villages as well as us city-dwelling Alaskans. I'd love to see Alaskan-grown hemp products at the Farmers Market in the next couple of years.

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« Pearl=W wrote on Friday, Nov 06 at 10:30 PM »
ONAPA - a very wise, interesting, and thoughtfull question!! The dilemna/difficulty of picking and choosing from one, while not damaging or distroying the other, is a struggle, a balancing act, and a learning experience. Patience and experimentation and some kind of a safety net is required.
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« ONAPA wrote on Friday, Nov 06 at 09:25 PM »
When you measure cost of living in rural versus urban areas it will always be more expensive to maintain an urban lifestyle in a rural area. The true question is what is the cost of an urban lifestyle to the quality of life in a rural community.
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« use_your_head wrote on Friday, Nov 06 at 07:07 PM »
The extension of the AKRR throughout the state would help attenuate the supply cost issues for many of the rural areas. The construction programs would provide many jobs and create demand for construction materials and machinery that would stimulate and increase our economy and job market.

It is a simple truth that larger quantities can usually be shipped for a lesser per unit cost than a single unit shipped by itself. Trains are one major method of moving goods that is also cost effective and are becoming extremely enviromentally sound. Airplanes are expensive for moving cargo as they depend on weight restrictions in order to fly. The bulk of the cargo also plays a role although not as much for cargo only aircraft (think Shorts skyvans, C-46s and C-130s).

We could always return to using dog teams to transport mail and goods. As an enviromentally friendly option the dogs have their benefits, not to mention the nostalgic appeal and the opportunity to tick off PETA.

I'm positive those persons who have become accostomed to rapid responses and delivery of goods will suddenly develop quality senses of patience...
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« Pearl=W wrote on Friday, Nov 06 at 03:40 PM »
Isanova - Oh, I quite agree, as to the reasons for the costs. That's my point - it's the extended 'supply-line' that is generally the reason behind the cost diferential.

I'm not saying that anyone is 'gouging', only that the reality is that a lot of Fbk business is supported by the bush $$$s, because a high % of bush income is spent in towns, and for transport [based in towns] to move goods out that long distance. War-Below Air [for example] exists as a viable business and employs a certain number of people, who would not otherwise have jobs, BECAUSE air transport of goods and people to the bush is a 'need' that rural residents pay for. As far as I've ever heard their employees are not overpaid, nor their business exorbinately profitable. But it is a fact that their livelihoods are paid for by the bush, just as the quality of life in the bush would be lower without businesses like War-Belows.

The economy of 'supply towns' is intimately connected to the needs of the surrounding rural areas [mutual dependence], and financially collapsing the economies of those rural villages and customers will have dire consequences for Fbk, as well. It's wise to remember that it's a two-way street.
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« Isanova wrote on Friday, Nov 06 at 01:44 PM »
Pearl=W,

Ever consider the fact that shipping small planefuls of foodstuffs and goods costs quite a bit more than shipping stuff en-masse via ship and rail? If everything in Fairbanks was flown in on small planes or barged in, we would be paying just as much as Anatuvik Pass. Some small portion goes to profit, but that is capitalism for ya. Most of those costs are just the costs of doing business. The Federal Govt already subsidizes some of that via airports and such.
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« Isanova wrote on Friday, Nov 06 at 01:23 PM »
What on earth makes you think Hemp would significantly grow up here, much less on permafrost? What have YOU been smoking MJ?

And why on earth are we bringing the native/whiteman bickering into the issue? Does that somehow affect anything related to this article?

FDNM,

I am not entirely human, I am a complex simulation thereof operating out of a carbon composite of molecules. Why do you ask?
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« axe2grind wrote on Friday, Nov 06 at 01:02 PM »
Yet the city folks want us to pay for their frills - hmmm..
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« starch wrote on Friday, Nov 06 at 12:08 PM »
*Shortly* means less than 90 seconds.
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« Pearl=W wrote on Friday, Nov 06 at 11:59 AM »
Thank *you* - exactly how long is *shortly*? before my comment is posted?
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« Pearl=W wrote on Friday, Nov 06 at 11:56 AM »
I would point out, that the extra costs of living rurally doesn't evaporate into thin air. Those extra dollars are what rural residents pay to *businesses in urban areas*, for the extended "supply line". All those extra costs [$$$] are syphoned into the *urban* communities to enrich our commercial sections, and expand our job opportunities. Fairbanks has many businesses that would suffer financially, or even collapse, if it were not for the extra $$$s rural residents must spend for the same goods you and I enjoy. Fairbanks would be considerably improverished, if rural residents ceased to desire [at least some of] the appurtences and conveniences of our modern world.
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« MJHemple wrote on Friday, Nov 06 at 10:31 AM »
We could use part of the Permanent Fund to build an oilgae plant in every village to start.

http://www.oilgae.com/

Then we could add small industrial hemp farms and villagers would have jobs growing and creating their own products for their own villages and for trading and selling to other markets as well. Everything a village needs can be made out of industrial hemp, including more energy efficient homes and clean, sustainable fuel to keep them warm. If villagers started eating hemp seeds, their health would improve tremendously as well.

http://www.americanlimetec.com/

http://www.hemphasis.net/Building/building.htm

http://www.hemp4fuel.com/news.php?item.204.11

http://www.ratical.org/renewables/hempseed1.html
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« ChenaSteamer wrote on Friday, Nov 06 at 10:10 AM »
Just by the way, what organization has Petrostar, Sourdough, Texaco, Chevron?
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« anonymous wrote on Friday, Nov 06 at 10:07 AM »
Subsistance??
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