When Permanent Fund Dividend checks of $992 were distributed on July 1, Alaskan consumers received timely assistance during the COVID-19 pandemic. With Federal unemployment insurance set to run out at the end of July and CARES act funds making their way through local governments, economists are uncertain as to the impact that the PFD had on the Alaskan economy by being distributed in July.
“I think it was helpful in the immediacy of the impacts from the shut ins that resulted, the closure, the temporary or in some cases permanent closure of businesses, I think any cash that we can get on the street right now is very important. Getting liquidity out into the pockets of workers as well as into the accounts of businesses is incredibly important,” said Anchorage Economic Development Corporation President Bill Popp. “What will happen in October when we get there and there may or may not be some other form of PFD, or at this point not a PFD, that’s probably going to have a negative outcome in regards to jobs in that time of year because that’s several hundred million dollars that is now no longer up for grabs in a time of year when things are usually slowing down in the broader economy.”
Popp said that the use of permanent fund dollars by Alaskans in October has been difficult to measure without definitive broad surveys of PFD recipients, but that after the PFD began paying out more than $1,000, many service sector and retail jobs would be sustained after the summer tourist season through the PFD’s traditional October payout.
“What we did notice is that in that period between September and December we saw where retail employment stopped dropping off in that normal time frame of September, October. The jobs remained relatively stable when the PFD’s got up north of $1,000 a month and so what we think has happened is that retailers recognizing the PFD rollout in early October recognized that they just needed to hang onto their staff and then this solved a lot of problems for them too,” said Popp. “I think this is going to be more about needs rather than wants this year.”
With the cancelation of cruise ships that would likely have brought over a million tourists into the state to boost the economy, many businesses are suffering.
“We’ve got statewide hundreds and hundreds of businesses in the tourism sector that are at risk. If any of this money can help filter in from other pockets into the pockets of workers in this industry as far as if they are employed or if there is the ability to get it into these businesses, that’s just another small but important step towards helping to get them through this coming winter. We’re going to lose a lot of businesses in the coming eight months, 10 months it is just inevitable given the disaster that has befallen us,” said Popp. “We’ve lost tens of thousands of jobs in our state as well as opportunities for independent contractors et cetera, so I’m very concerned about that point in time when that assistance runs out.”