The percent of Alaska’s job losses from state budget cuts, taxes and reduction of Alaska Permanent Fund dividends — and all three appear necessary — will be as much or greater than the seven percent job loss when the economy tanked between 1986 and ‘88.
"That would be what our numbers say," Knapp agreed.
And that’s the best-case scenario.
If the Legislature mishandles the situation, as it appears poised to do, judging by some legislators’ hard-line attitudes, then an economic crash could come with an impoverished long-term future.
After looking at the numbers in the report, I realized we have focused too much on the differences between the current situation and the ’80s crash, when 14 banks and other financial institutions failed and the population shrank by more than a tenth.
Knapp’s shocking conclusion is that even if the Legislature makes the best choices, closing the current $3.8 billion deficit would cost up to 30,000 jobs in direct and indirect losses. And barring unexpected good news, the real numbers could certainly be worse.