According to a survey conducted by Southeast Conference, over a third of Skagway business leaders expect to reduce jobs this year. (Graphs from Southeast Conference’s Skagway Business Climate and COVID-19 Impacts Survey.)

Haines and Skagway have some of the highest rates of unemployment in the state, even though unemployment in the Upper Lynn Canal decreased from April to May. That’s according to preliminary data from the Alaska Department of Labor and Workforce Development.

Over a fifth of the Haines workforce was unemployed in May. A full third of Skagway’s workforce was collecting unemployment in April. Those numbers are still subject to revisions by the Alaska Department of Labor and Workforce Development. 

Recently, both communities have seen a clear decrease in unemployment rates. There was a 10% reduction in Skagway’s unemployment rate from April to May and a 5% reduction in Haines.

Skagway Development Corporation Executive Director Kaitlyn Jared said that when the pandemic was beginning, many businesses quickly laid off employees. Jared thinks the recent drop in unemployment may have to do with more local businesses receiving federal payroll protection.

“Obviously one of the big aspects of the paycheck protection program was [if] you want to get it forgiven you have to have people on payroll. That could be part of the reason why we saw a reduction from April to May,” Jared said. 

The state saw a surge in unemployment claims at the start of the pandemic. Since the CARES Act was passed, the federal government expanded eligibility for unemployment insurance and increased the amount of money in payments to individuals who are out of work. 

Those larger unemployment checks will end July 24th, unless congress adds more funding. 

Jared said she doesn’t expect to see further reductions in Skagway’s unemployment rate in the near future. 

“It will be hard for us to see our numbers for employment go up, if not further down until we see cruise ships here again or tourism at the level again. The outlook for next year is pretty sad still, and businesses don’t have high confidence in next year either,” Jared said.

According to the Alaska Department of Labor and Workforce Development, leisure and hospitality took a larger hit than any industry in the state with a 40% reduction in jobs compared to last year. That is reflected in communities like Haines and Skagway that rely on cruise tourism as a major economic driver.

Recently, regional economic advocacy group Southeast Conference conducted an economic climate survey of businesses in Southeast Alaska.  One third of the 47 Skagway businesses that responded said they were at risk of closing permanently. Respondents also said that they had laid off 66% of their staff due to the COVID-19 pandemic. 

In Haines, 13% of the 34 business leaders that responded said they were at risk of closing and just over a third of their workforce had been laid off due to the pandemic.