The employment and educational status of Alaska Natives is a troubling topic. The American Argument is that we are a country of equal opportunity. Alaska Natives as communities and people were denied citizenship and the right to stake legal mining claims until 1923. Racial discrimination was legally ended in 194x. As a people, the territory of Alaska provided locally available education for whites from 1905 to present. Local high school educational opportunities began in the early 1980s for most Alaska Native communities. This report should be read with these points in mind. — Paul Ongtooguk

Chapter 4

The Labor Force Status of Alaska's Native Population

Theodore Lane, Adjunct Professor, ISER
and Partner, Thomas/Lane & Associates

Cheryl K. Thomas, President
Thomas/Lane & Associates

excerpted from

Developing America's Northern Frontier

Theodore Lane, ed., University Press of America, 1987

Native Employment and Labor Force Participation

     Educational Status

     Age Differences

     Location

     Industrial Structure

     Occupational Structure

     Wage Levels

     Summary of Findings

The Aniak Case Study

     Background

     Project Description

     Project Results

Conclusions

Bibliography

List of Tables and Figures

Table 8. Educational Attainment of Native Persons 25 Years and Older, 1980

Table 9. Education of Native Persons 25 Years and Older by Ethnic Regions, 1980

Table 10. Education and Labor Force Participation of Persons over 25, 1980

Table 11. Distribution of Native Employment by Industry, 1970 and 1980

Table 12. Distribution of Occupations of Natives in the Civilian Labor Market, 1970 and 1980

Table 13. Distribution of Occupations in Civilian Labor Force, 1980

Table 14. Average Hourly Wages for Selected Occupations, 1981

Table 15. Aniak Total Employment

Table 16. Selected Labor Force Rates Aniak

Table 17. VSW Crew Employment

Table 18. PW Crew Employment

Table 19. C&M Crew Employment

Table 20. Comparison of Constructing Aniak Community Hall and Aniak School, July - December 1983

Figure 4. Alaska Map Showing Aniak and Other Major Cities

Figure 5. Quarterly Termination Rate

The proportion of Alaska Natives employed in 1980 was low relative to both the state's white population and to national norms. Furthermore, only about half of the adult Native population in Alaska was in the labor force compared to 79 percent of the while population. At the same time, the proportion of Natives unemployed was double that of whites, while the proportion who had experienced at least some unemployment during the previous year was 60 percent higher.

Reasons for Natives' low participation rates, low employment, and high unemployment have been widely discussed in Alaska, and various explanations have been suggested. George Rogers felt the major causes were inadequate education and health (1967 and 1969) and discrimination (1972). Lee Huskey (1983) argued that the problem resulted from the structure of rural Alaska's economy, combined with an unwillingness of Natives to migrate to areas where job opportunities were growing. Judith Kleinfeld and Jack Kruse (1982) found a differential adaptation of Native men and women to the labor market and suggested it might be related to Native cultural definitions of appropriate work. Nelson (1969) felt that a dissonance existed between Native culture and the organization of the workplace.

Employment increased by over 77,000 jobs in Alaska during the 1970s. About 52,000 of these jobs were in urban Alaska. Employment in rural Alaska (including the regional centers) grew by about 24,000 jobs (U.S. Department of Commerce, 1970, 1980).

The share of rural jobs held by Natives between 1970 and 1980 slipped slightly from 26 percent to 22 percent. At the same time, their share of urban jobs rose from 2 to 4 percent. Overall, Natives held only about 9 percent of the jobs in the state through the decade of the 1970s, while making up about 16 percent of Alaska's total population.

Native unemployment declined from 25 percent to 20 percent between 1970 and 1980, while their proportion of the population in the labor force grew from 38 percent to 50 percent. Urban unemployment rates were higher than rural ones in 1980, 11.1 percent compared to 9.7 percent, but the difference was entirely accounted for by differences in participation rates. If rural Natives had participated in the labor force at the same rate as urban Natives, their unemployment rate in 1980 would have been almost 17 percent. In both 1970 and 1980, the unemployment rate for Natives was more than double that of non-Natives. The higher unemployment rates, however, are for the weeks immediately prior to the census. When the census asked about full-time, part-time, or seasonal work experience during the prior year, 83 percent of all Natives (and 92 percent of all males) reported being employed sometime during the year. This finding is supported by a recent study by ISER (January 15, 1984) which found that "while Alaska Natives received significant direct and indirect transfers of goods and services from the federal and state governments, most of their support continues to come from their own wage employment and subsistence activities." Most Natives (and particularly Native men) appear to support themselves by alternating periods of wage employment and subsistence.

This interpretation of the census data is also supported by case study data from a variety of sources. Kleinfeld and Kruse (1982) found high rates of voluntary job termination among the North Slope Inupiat. Hobart (1982) and Kupfer and Hobart (1978) found similar conditions in the Canadian north. Rogers (1965 and 1972) found high voluntary job termination rates among Natives in southeast Alaska. Kleinfeld, Kruse, and Travis (1981) found this pattern pronounced among northern Native men, and the Alaska Department of Labor (1981) found high turnover in the Lower Yukon-Kuskokwim region.

High Native unemployment rates, consequently, appear to stem from a lack of employment continuity as well as from a lack of job opportunities. Although Native unemployment rates are always high, practically every adult Native works sometime during the year.

This chapter begins with an analysis of how education, age, location, industry mix, occupational mix, and wage levels contribute to the observed pattern of low employment and labor force participation among Alaska Natives. The analysis leads us to conclude that while educational and demographic factors are associated with low participation rates, the economic structure of rural labor markets is the major factor causing low Native employment. We then present a case study of how the village of Aniak, Alaska, attempted to address the problem of Native unemployment by restructuring the institutional arrangements of their local labor market. We. conclude with comments about these findings for Native employment in the North.

NATIVE EMPLOYMENT AND LABOR FORCE PARTICIPATION

Educational Status

Dramatic changes in educational attainment among Alaska Natives occurred during the decade of the 1970s. In 1970, approximately 66 percent of Natives over 25 years had less than eight years of schooling. By 1980, this had fallen to 41 percent, while the proportion that were high school graduates went from 22 percent to 46 percent. Changes were far less dramatic for the white population in Alaska: approximately 75 percent were high school graduates in 1970 and 89 percent in 1980.

The Native population of rural Alaska had significantly less education than that of urban Alaska. Almost twice as many Native adults in rural Alaska (63 percent) had less than a high school education than in urban Alaska (35 percent). Similarly, 6.5 percent of the Native population in the urban centers had four or more years of college, compared with 4 percent in the regional centers and 2 percent in the rural areas (Table 8).

Table 8

Educational Attainment of Native Persons 25 Years and Older, 1980

^aUrban: Anchorage Borough, Fairbanks North Star Borough, Juneau Census Division, Ketchikan Gateway Borough

^bNonurban: Remainder of state

Source: Census of Population

Educational levels varied considerably between Native ethnic regions. They were highest in the Tlingit-Haida region of Southeast Alaska, where only 40 percent of Native adults lacked a high school education (Table 9). In the Eskimo regions of the state, about 66 percent of the adult Native population had not finished high school. Similarly, 19 percent of Native adults in the Tlingit-Haida region had some college work compared to 10 percent in the Eskimo region and only 8 percent in the Aleut region. A strong relationship seemed to exist between the high labor force participation rates and high educational levels; however, the relationship did not explain the very similar labor force participation rates of Natives in urban and nonurban Alaska. The participation rate of urban Natives was 57 percent compared to 51 percent in the nonurban regions (not a large difference compared to the significant differences in Native education between the regions).

Table 9

Education of Native Persons 25 Years and Older by Ethnic Regions, 1980

^aBethel, Kobuk, Nome, North Slope, Wade Hampton

^bAleutian Islands, Bristol Bay, Kodiak Island

^cHaines, Juneau, Ketchikan, Prince of Wales, Sitka, Skagway-Yakutat, Wrangell-Petersburg

^dS.E. Fairbanks

Source: Census of Population

Comparisons with national educational levels show Alaska whites to be significantly above the national average, and Alaska Natives to be significantly below. Nationally, 18 percent of the population over 25 had less than eight years of schooling in 1980, compared with 41 percent for Native persons and 3.8 percent for white persons in Alaska. Within the national population, 67 percent of those over 25 had graduated from high school, whereas in Alaska, 89 percent of whites and 46 percent of Natives were high school graduates. Of all adult persons in the nation, 16 percent had completed four or more years of college compared to 3.5 percent for Native and 24.4 percent for white persons in Alaska.

The relationship between education and labor force participation was highly correlated for both Native and white adults, with each population's proportion in the labor force rising as education increased. Only 38 percent of Native adults with less than a high school education were in the labor force, compared with 64 percent of high school graduates, 70 percent of those with some college, and 76 percent of college graduates. The pattern was similar for the white population. Of those without a high school education, 55 percent were in the labor force compared to 66 percent of high school graduates; 70 percent of those with some college were in the labor force compared to 81 percent for college graduates.

The patterns of Native and white education and labor force participation were particularly close for persons with higher levels of educational attainment. If we compare only those adults who had at least completed high school, Native labor force participation was 66 percent in 1980 compared to a white participation rate of 71 percent. If we normalize the two populations' rates of education (that is, apply the white rates of educational attainment to Native population and then use the Native labor force participation rates for each educational level) the overall Native labor force participation rate becomes 66 percent compared with a white rate of 69 percent (Table 10). Clearly, educational attainment is an important determinant of both Native and white labor force participation.

Table 10

Education and Labor Force Participation of Persons Over 25, 1980

^a76 percent less than 8 years of school

^b33 percent less than 8 years of school

Source: Census of Population

Age Differences

Native women appear to get their education earlier than Native men. Over twice as many Native women as Native men attended college in the age groups of 20-29 years. However, for older age groups, the proportions are roughly the same for Native men and women. Since educational levels are correlated with labor force participation rates, we should expect that labor force participation rates of Native men would increase at older age cohorts but that this would not be true for Native women. We would also expect higher participation rates for Native women than men under the age of 30. In fact, these relationships were found in the 1980 Census data.

The labor force participation rate for Native women rose from approximately 32 percent for women 16-19 years of age to a peak of about 60 percent for women 25-29 years and then very slowly declined. For Native men, the labor force participation rate rose from 29 percent for those 16-19 years to a peak of 75 percent for the age group 35-39.

The labor force participation rate of Native women was 9 percent higher than that of Native men between 16 and 19 years of age. In the twenties age group, the participation rate of Native women fell 15 percent below that of Native men, and in the thirties it fell 35 percent below that of Native men. This pattern corresponded with increased education of older Native men.

The age distribution of the adult population also appeared to have an effect on participation rates. The young and the old participated in the labor force less than those in the middle age groups.

Overall, age differences were important for understanding the labor force participation pattern of Alaska Natives, but it appears that levels of educational attainment associated with age were a more important factor influencing their labor market participation.

Location

Native employment rates varied widely across the state, from 22 percent in Yukon-Koyukuk to 59 percent on the Kenai Peninsula. Unemployment also varied widely by location, from a low of 8 percent among Native men in Bethel and the North Slope to a high of 19 percent in Sitka and Kobuk.

Surprisingly, employment was greater for Native men in the regional centers than in either the urban or rural areas of the state. Employment rates for Native men averaged 56 percent in the regional centers as compared with 51 percent in urban areas and 35 percent in the rural areas (outside the regional centers). The proportion of Native men unemployed was correspondingly lowest in the regional centers (11 percent rate), and only 24 percent had experienced unemployment during the previous year.

Industrial Structure

The structure of Alaska's economy in 1980 was dominated by government (32 percent of total nonagricultural wage and salary employment), services (22 percent), and trade (17 percent). These three sectors of the economy accounted for better than seven out of ten wage or salary jobs and over two-thirds (71 percent) of the state's total job growth between 1970 and 1980 (Table 11). These sectors were also highly concentrated in urban Alaska. About 65 percent of government employment, 89 percent of service employment, and 97 percent of trade employment were located in the state's four urban areas where only 24 percent of Alaska's Native population resided. As a consequence, Alaska Natives had relatively few job opportunities unless they were willing to migrate into urban Alaska.

Table 11

Distribution of Native Employment by Industry, 1970 and 1980 (percent)

Source: "A Summary of Changes in the Status of Alaska Natives," Institute of Social and Economic Research, January 15, 1984.

Comparisons between 1970 and 1980 are difficult because of the large number of unclassified workers in 1970, but two patterns stand out. The relative decline in Natives employed in manufacturing (probably due to the decline in fish and timber processing in southeast Alaska) and the relative increase in Native construction employment (probably due to the state's increased capital expenditures, particularly in rural Alaska). Otherwise, Native employment in both urban and rural Alaska closely followed the pattern of industrial concentration which dominates the total Alaska economy.

Occupational Structure

The occupational distribution of Native men in urban and nonurban Alaska was similar in 1980; however, Native women exhibited significant differences. Approximately 40 percent of the Native male work force was engaged in skilled blue collar trades, 15 percent in unskilled trades, and another 17 percent in service jobs (principally cleaning and building services). Professional, managerial, and technical occupations engaged the remainder of Native men. None of these proportions varied significantly between urban and rural areas.

Native women in urban and nonurban Alaska, however, had distinctly different occupational distributions. In urban places, 19 percent of Native women held professional, managerial, and technical jobs compared to 12 percent in rural areas. However, the most significant difference occurred between women in administrative support and service jobs. Over 40 percent of urban women held administrative support jobs in 1980 compared to only 28 percent of rural women, More rural women held service jobs than urban women, approximately 30 percent compared to 20 percent. The proportions of women in blue collar trades remained virtually the same at around 10 percent.

Table 12 shows the changing occupational distribution of Alaska's Native labor force. The greatest increase took place in administrative support occupations (which are primarily filled by women), while services occupations (also filled primarily by women) showed a large absolute increase but declined relative to other occupations.

Table 12

Distribution of Occupations of Natives in the Civilian Labor Market, 1970 and 1980

Source: Census of Population

A comparison of occupations held by white and Native workers in Alaska in 1980 (Table 13) shows that the percentage of the Native work force engaged in services, unskilled labor, forestry, and fishing was double that of the white workforce. White and Native workers in skilled blue collar and administrative support occupations, however, were employed in about the same proportions. The percentage of the Native workforce holding managerial and professional jobs however was only about half that of the white work force.

Table 13

Distribution of Occupations in Civilian Labor Force, 1980

	Native	Percent	White	Percent
Executive and Managerial	1,492	8	20,686	14
Professional	1,140	6	23,546	15
Technical	522	3	6,146	4
Sales	854	5	13,273	9
Administrative Support	3,493	19	26,664	18
Service	4,264	23	18,353	12
Forestry and Fishing	1,178	6	3,914	3
Precision Production and Crafts	2,438	13	21,248	14
Machine Operators and Assemblers	582	3	3,916	3
Transportation and Material Moving	957	5	6,668	4
Handlers, Helpers, and Laborers	1,876	10	7,235	5
TOTAL	18,796	100	151,649	100

Source: Census of Population

Wage Levels

Table 14 gives average hourly wages for selected occupations, by union and nonunion status, for urban (Anchorage and Fairbanks) and rural (balance of state) Alaska. The most notable pattern discernible from Table 14 is the relationship of union wages in urban and rural parts of the state among the four blue collar jobs at the top of the table. For the three occupations requiring training to reach journeyman status (carpenter, truck driver, and auto mechanic), rural union wage rates either equal or exceed urban rates. For skilled journeymen in those occupations, rural jobs offer attractive wages and the potential of substantial overtime hours. They are good jobs, and with an average wage differential of about 25 percent between Anchorage and Seattle, and skilled craftsmen both within and outside Alaska compete for them. The result is that members of local labor forces in rural Alaska have difficulty obtaining these jobs since they generally don't have the skill or experience (or when they do, the union membership) to compete successfully.

The laborers' jobs are a usual point of entry for workers without job experience in the skilled construction trades. They are also union jobs not requiring an apprenticeship. These jobs in rural Alaska pay over 50 percent above the nonunion rates paid in the urban areas where there is an extensive nonunion construction sector. Persons with a year or two of urban nonunion construction experience find rural union laboring jobs attractive. Their competition for these jobs again puts local workers with little construction experience at a disadvantage. The result is that employers working under union-management contracts have no market incentive to hire locally when more experienced nonlocal workers are available at the same wage.

A recent study by the Alaska Department of Community and Regional Affairs (Rural Development Council, 1982) estimates about 85 percent of the value of rural construction contracts let by the State of Alaska goes to construction firms located in Anchorage, Fairbanks, or out-of-state. These contracts are bid competitively and are covered, therefore, by either the Federal Davis-Bacon Act or its state equivalent. This results in union wages being paid on these projects. When contractors paying union wages evaluate the experience and skills of their available supply of labor, they have no market incentive to hire locally. Since capital projects construction has been the major source of private employment in rural Alaska during the past several years, local workers (particularly males who normally dominate the construction occupations) are significantly disadvantaged in their job competition.

The bottom four occupations in Table 14 are ones usually associated with female employment, and they present a very different relative wage picture. Three of the four occupations either do not have union management agreements or have lower union rates in rural areas than they do in urban areas. Lower skilled occupations (sales clerk and cashier) pay higher rural wages, but since (a) their absolute level is low and (b) they involve year-round employment with steady hours and little (if any) overtime, the differential is not enough to attract immigrants. The higher wages appear sufficient to draw spouses of local households with already employed heads of households, This increase in the local labor supply probably works to local Native women's greatest disadvantage in state and federal government jobs where personnel systems are more formal and credentials more important. Local government and private job opportunities, however, probably operate in the other direction, giving a preference to local workers. Consequently, Native women in rural Alaska do not appear to face the same competition as men in competing for jobs.

Table 14

Average Hourly Wages for Selected Occupations, 1981

	Anchorage and Fairbanks			Balance of State
	Average	Average Union	Average Nonunion	Average	Average Union	Average Nonunion
Carpenter	$17.91	$18.45	$16.17	$14.77	$18.67	$13.14
Truck Driver	14.87	15.87	12.96	13.32	15.77	11.55
Auto Mechanic	12.15	13.79	11.76	13.17	16.36	12.75
Laborer	11.08	15.87	8.42	11.57	12.75	6.18
Secretary	7.34	—	7.34	7.17	—	7.17
Gen. Office Clerk	6.87	9.46	6.34	6.68	8.53	6.63
Sales Clerk	5.23	6.28	5.11	5.41	6.04	5.36
Cashier	5.10	6.95	4.75	5.86	6.68	5.72

Source: Wage Rates for Selected Occupations, Alaska Department of Labor, 1981.

Summary of Findings

The current labor force status of Alaska Natives is a complex phenomenon, one that represents the interaction of several different economic, social, and cultural forces. Low Native labor force participation rates (compared to either non-Native Alaskans or national norms) appear to be associated with demographic and educational factors. Higher proportions of the Native population falls in the 16-to-19 years and over-60 years of age brackets than is true for whites, and these brackets have the lowest participation rates among working-age adults. The importance of education is emphasized by the fact that a large part of the Native/non-Native participation rate differential disappears when the two populations are normalized for educational attainment.

Employment rates, on the other hand, appear more closely associated with economic factors. The industrial and occupational structure of Alaska's economy has resulted in few job opportunities being generated in rural Alaska relative to urban areas of the state. The jobs that have been created are mostly in government or the construction of capital projects. When the construction jobs are covered under labor-management agreements, pay union wages, and offer substantial overtime opportunities, they attract a supply of experienced construction trades craftsmen who put local (mostly Native) workers at a competitive disadvantage. Because the wage structure is different among those entry-level occupations mostly filled by women, they appear to face less of a disadvantage in competing for local jobs, and this may be related to the more rapid increase in employment rates among women than men during recent years.

Finally, unemployment rates also appear to be culturally influenced. Even when Natives (particularly males) obtain good jobs with high status and pay, they will voluntarily leave the jobs to engage in subsistence, family, or other activities. This high turnover pattern contributes to the high rates of unemployment observed among Native adults. It also causes employers to resist hiring Native workers when continuity and reliability of job holding are important aspects of the job.

Among the different forces (demographic, educational, economic, and cultural) which contribute to the current status of Natives in the labor market, the cultural aspects of unemployment appear the best target of opportunity for demonstrating new manpower policy alternatives. The demographic and educational factors are in the lengthy process of taking care of themselves. Falling birth rates and rising levels of educational attainment are both strong, time-related trends in the Native population. The industrial and occupational structure may not be changeable. Even if it is, it will require a coordinated, consistent, statewide policy toward rural development, and such a policy does not presently exist.

Changing relative wages to reduce the attractiveness of rural jobs to urban-based, skilled craftsmen and changing job conditions to make them culturally responsive to Native values, however, can offer the opportunity for Alaska Natives to productively participate in the state's cash labor markets.

THE ANIAK CASE STUDY

Approximately three years ago, the village of Aniak initiated a project with reduced relative wages and culturally altered work rules in an attempt to provide employment for the village work force. Because the Aniak project closely resembles the findings of our research, we documented its progress for a year and a half with the following results (Figure 4).

Background

Aniak is located on the Kuskokwim River, about 320 miles west of Anchorage and 90 miles northeast of Bethel (the Kuskokwim Peninsula's regional center). Its 1980 Census-reported population was 343 persons, of whom about 64 percent were Native, about equally divided between Yupik Eskimo and Athabascan Indians. The median age of the Native population in 1980 was 21 years, and about 57 percent were in the working ages, 18 through 64 years. Women made up about 51 percent of the population.

Over 66 percent of Aniak's families in 1980 had at least one child living at home in 1980, and about 75 percent of persons under 18 years were living with their parents. Just over 51 percent of all Natives 25 years and over had graduated from high school. About 4 percent had graduated from college.

The economy of Aniak was traditionally based on the subsistence food harvest. This was supplemented for about half the village's adult population by part-time wage earning. Residents went to fish camps each summer and caught silver, king, and dog salmon, the village's primary subsistence food source. Sheefish, smelt, pike, lingcod, and other species provided less important seasonal harvests. Fall and winter hunting furnished residents with moose, bear, mink, and a variety of small animals and birds.

Cash entered the village economy in a variety of ways: Some salmon were commercially harvested, while others were caught by outside sports fishermen who often employed local guides. Two small stores, one regional store, several local air services, and the Aniak Lodge provided most part-time employment for about 25 to 35 people. An additional five to seven people worked for local government, while local utilities and the local school district employed (together) about twenty full-time and several part-time staff. Regional and state agencies employed twelve to fifteen people, mostly full-time. Summer youth employment programs, firefighting jobs with the federal Bureau of Land Management (BLM), and summer cannery work (away from Aniak) provided additional sources of income for residents.

Beginning with erection of the military's White Alice radar-relay station just outside Aniak in 1956, public construction has been a major source of employment in Aniak. The construction of schools, public housing, the airport, and other public facilities created new jobs. These projects were competitively bid, and nonlocal contractors employing nonlocal labor built most of them.

Aniak is both a city and a Native village. It was incorporated in 1976 as a second-class city and is governed under the authority of a mayor who is elected from a seven-member city council. Aniak's Native population is also represented by a five-member Traditional Council, recognized by the Bureau of Indian Affairs as the official tribal governing body of the village of Aniak.

For about a year and a half, the city of Aniak operated a locally controlled construction program whose purpose was to hire, train, and retain local Native residents.* The city also entered into an agreement with the traditional council to jointly construct two public facilities: a community hall and a tanning and cannery facility. The city of Aniak was the employer with whom we worked.

Project Description

The City of Aniak's safe water program laid four miles of sewer pipe at 10-foot depths, constructing both force-main and gravity-main systems, and prepared the sewer lagoon. They hooked up over 80 households, businesses, and facilities to the sewer system. This crew was managed by a local Native supervisor, who expressed great pride in the work conducted by his crew.

The public works crew constructed a 1,500-square-foot day care center and was in the process of building (1) a 2,400-square-foot, two-story maintenance and storage facility, (2) a $1 million erosion control project including dikes and internal roadways, and (3) a new 4,000-square-foot City Hall and Public Safety Building. This crew was managed by a non-Native, who came from Montana. His five-person crew was composed of four local workers and one from outside.

The city also took part in a joint venture with the traditional council on two projects: (1) a 9,500-square-foot community hall, and (2) a 4,000-square-foot tanning and cannery facility. These projects were managed by the chief of the traditional council, who worked side by side with his five-person crew.

Hiring and recruiting for both full-time and seasonal work was conducted largely by the city manager through word of mouth and advertisement in the local, biweekly newspaper, The River. The goal was to hire and train local people. The selection process included evaluation of skills, but most importantly, a willingness to work. Workers were paid an entry wage of $7.00 to $9.00 per hour, with no fringe benefits.

The construction crews worked independently from each other and developed rather distinct identities. The managers' greatest challenge was to develop in their employees a sense of the work ethic as well as train them in performing such specific functions as laying pipe, operating heavy equipment, installing sheet rock, and wiring.

In an effort to train workers to come to work both on time and daily, the supervisors initially picked up each worker in the morning at his home. (Aniak is quite spread out, and workers can and do live up to three miles from work sites.) They would also be driven home at the end of the day. After several months of providing this incentive, the city purchased sixteen three-wheelers and provided them to employees for transportation to and from the work site. While workers are now into the habit of coming to work on time, twelve of the sixteen three-wheelers have been largely destroyed by being rolled by employees while off duty and most often inebriated.

The supervisors continually worked with the employees in all the projects. There was no outward difference among supervisors and workers in dress or manner. All people performed the same work whether it was digging ditches, hauling gravel, or pounding nails. As workers developed their skills in specific functions, supervisors often left the work site, and a sense of trust between workers and boss was developed.

Incentives were provided for a job well done throughout the construction project. For example, a bonus might be offered at mid-morning if a crew could lay 500 feet of sewer pipe by 6 p.m. The bonus would be divided equally among members of the entire team, and the crew worked hard to earn it. Financial bonuses might also be offered for longevity; i.e., all workers knew that there was a bonus for completing the season and that it was proportional to the amount of time worked.

Bonuses were not consistent. On a given day, they might be paid or not, depending on the mood and financial condition of management. They were, however, used often, and they were expected periodically.

Persons were allowed to take leave without pay as long as they gave notice of at least one week. Aniak's experience has been that few persons requested or took leave for subsistence purposes. Instead, workers, all of whom fished all summer, appeared to go fishing in the evening or on weekends. The same was true for moose and duck hunting in the fall.

The discharge policy was nebulous. The primary reason for firing a person was alcohol abuse. However, there was no hard-and-fast rule about being fired, and there were rehire options. Some workers were fired for failure to show for work due to a binge, and they might be rehired one week or one month later. Other workers missed a couple of days and returned to work immediately. It was largely a subjective policy, with management trying to rehire "good workers" but having less patience with "not-so-good workers."

There was no formal employee orientation when a person was hired. Thus, management rules and expectations were learned on the job. Supervisors primarily emphasized job safety (Aniak had no serious injuries among workers) and skill development.

Training in interpersonal skills and work habits in Aniak was provided by the Alaska Native Foundation. The training went very well because the managers were committed to participating and made time and space available to conduct the sessions.

One of the sessions ended with workers and management making a commitment to utilize a talking circle with one another in order to keep the communication lines open. Another session dealt principally with the destructive nature of alcohol abuse. Employees were offered techniques to employ in coping with stress and anger as an alternative to alcohol.

Project Results

Aniak had three crews. The Village Safe Water (VSW) crew started working during the second quarter of 1983 and averaged a crew size of five to six workers. The Public Works (PW) crew was reorganized during the second quarter and has fluctuated in crew size from seven to twenty-seven workers over the last eighteen months. The Construction and Maintenance (C&M) crew began working on the community hall last year and averaged a crew of eight to ten workers for the last 15 months. These three crews employed a total of 59 persons (95% local) in the past two years with a peak crew of 43 workers during the second quarter of 1983. The crews averaged between 25 to 30 workers during 1984 (Table 15).

Table 15

Aniak Total Employment

	Total Persons Employed	Village Safe Water Crew	Public Works Crew	Construction & Maint. Crew
1983
1 Qtr.	21	—	19	2
2 Qtr.	35	4	26	5
3 Qtr.	43	7	27	9
4 Qtr.	31	5	18	8
1984
1 Qtr.	27	6	10	11
2 Qtr.	20	5	7	8
3 Qtr.	32	6	17	9

Table 16 presents a set of labor force rates calculated quarterly for Aniak. Termination rates reflected the seasonality of construction work; however, rates clearly fell. The termination rate averaged 86 percent a quarter in 1983 and 61 percent during the first three quarters of 1984.

Table 16

Selected Labor Force Rates, Aniak

	Termination Rate	Turnover Rate	Utilization Rate	Average Duration of Employment
1983
1 Qtr.	140	272	4.80	5.0 weeks
2 Qtr.	69	194	7.23	3.0 weeks
3 Qtr.	81	149	5.66	6.5 weeks
4 Qtr.	54	100	4.24	9.0 weeks
1984
1 Qtr.	115	153	6.60	5.3 weeks
2 Qtr.	39	91	4.24	9.2 weeks
3 Qtr.	28	89	4.32	6.2 weeks

Termination Rate =	Total Terminations
	Avg. Weekly Employ.
Turnover Rate =	Total Term. + Total Hires
	Average Weekly Employment
Utilization Rate =	Calendar Weeks x Total Persons Employed
	Total Weeks Worked

The 1984 termination rates were all below their equivalent 1983 quarterly rates (Figure 5). The turnover rates followed a similar pattern but also reflect hirings and therefore had higher absolute values and a somewhat modified seasonal pattern.

 

The utilization rate shows the number of persons employed to work the same number of days as one full-time equivalent worker during the quarter. The average quarterly utilization rate for the first three quarters fell from 5.9 in 1983 to 5.0 in 1984. During the same period, the average number of weeks a worker was employed rose from 4.8 to 6.9.

The VSW crew employed a total of eight persons, of whom seven were local and one a regional resident. It paid an average of $7.50 per hour and during the first three quarters of 1984 paid just over $45,000 in wages (Table 17). Except for the first quarter of 1984, when the crew shut down operations for four weeks, turnover was steadily falling. During the third quarter of 1984, the VSW crew's utilization rate was 105, indicating that the crew was within 6 percent of its maximum potential full-time equivalent weeks of work.

Table 17

VSW Crew Employment

		Total Weeks Worked
	Total Persons Employed	Full Time	Part Time	Utilization Rate	Turnover Rate	Wages Paid
1983
1 Qtr.	0	0	0	—	—	0
2 Qtr.	4	6	2	171	100	$4,400
3 Qtr.	7	46	6	157	100	19,800
4 Qtr.	5	47	2	125	120	17,100
1984
1 Qtr.	6	13	11	292	200	6,600
2 Qtr.	5	42	4	148	50	17,500
3 Qtr.	6	49	3	105	7	21,000

The PW crew employed a total of 38 persons, 35 of whom were local, one regional, and two outside residents. Both the outside residents were specialists who moved to Aniak after they were hired. It paid an average of $8.50 an hour in wages and during the first three quarters of 1984, paid almost $105,000 in wages (Table 18). The PW crew averaged the highest turnover among the three Aniak crew, in part because of the more seasonal nature of its work. Comparing the first three quarters of 1983 and 1984 shows that the average quarterly turnover rate fell from 244 percent to 156 percent, while the utilization rate went from 240 percent to 181 percent. The PW crew provided opportunities for summer employment to Aniak residents, more than either of the other crews.

Table 18

PW Crew Employment

		Total Weeks Worked
	Total Persons Employed	Full Time	Part Time	Utilization Rate	Turnover Rate	Wages Paid
1983
1 Qtr.	19	67	40	284	237	$28,900
2 Qtr.	26	66	22	236	230	31,400
3 Qtr.	27	153	27	199	164	54,200
4 Qtr.	18	139	22	156	105	60,100
1984
1 Qtr.	10	49	10	241	200	26,400
2 Qtr.	7	71	9	123	114	40,000
3 Qtr.	17	78	15	179	155	38,700

The C&M crew employed a total of 13 persons, all of whom were local. The average wage on the crew was $8.00 an hour, and during the first three quarters of 1984 it paid about $91,000 in wages (Table 19). During the first half of 1983, the crew worked mostly on maintenance. After that, its primary task was construction of the community hall. The crew averaged about nine workers. Its average quarterly turnover rate fell from 182 percent to 79 percent between the first three quarters of 1983 and 1984, and its utilization rate fell from 185 percent to 159 percent.

Table 19

C&M Crew Employment

		Total Weeks Worked
	Total Persons Employed	Full Time	Part Time	Utilization Rate	Turnover Rate	Wages Paid
1983
1 Qtr.	2	18	0	122	200	$9,800
2 Qtr.	5	22	1	267	200	13,200
3 Qtr.	9	60	11	165	146	24,000
4 Qtr.	8	74	12	130	76	45,500
1984
1 Qtr.	11	73	6	188	115	29,900
2 Qtr.	8	64	0	163	81	28,900
3 Qtr.	9	63	2	127	40	31,411

Overall, the greatest reductions in turnover (and particularly terminations) occurred in the two smaller crews, which required greater skill acquisition and which were led by Native supervisors working alongside their crews. The larger PW's crew turnover rate, however, also reflects its role as Aniak's seasonal employer. Taken together, the three crews appear to support our contention that a work environment designed for the employment of local Native residents can, in a relatively short time, produce a reliable and productive work force.

A second way to evaluate the Aniak project is a comparison of equivalent work, involving traditional rural Alaska contracting methods. Beginning in July 1983, the Aniak School District built a new facility in town using competitive bidding to select its contractor and requiring rapid completion of the structure. The school was about 90 percent completed by January 1, 1984. During the same two quarters, Aniak's C&M crew began building the new community hall. Table 20 compares the two projects.

Table 20

Comparison of Constructing Aniak Community Hall and Aniak School, July – December 1983

	Aniak Community Halla	Aniak Schoolb
Total Persons Employed	11	33
Local Residents
Number	11	4
Percent	100%	12.1%
Total Wages Paid	$69,500	$499,700
Local Residents
Number	$69,500	$52,000
Percent	100%	10.4%
Average Straight Time Hourly Wage Rate	$9.50	$24.80
Average Hourly Employer Labor Cost	$10.70	$31.50
Utilization Rate	149%	242%
Early Termination Rate	44%	22%

^aConstructed with city acting as own general contractor and hiring locally.

^bConstructed with contract let under competitive bid with contractor employing union labor.

During the final two quarters of 1983, the Aniak school construction crew employed thirty-three workers, of whom four were local residents. About 10 percent of its total wages paid ($52,000) went to local residents. The average hourly wage rate was $24.80, The cost to the employer per hour, including overtime and fringe costs, was $31.50 (Table 20). By comparison, the village's C&M crew employed an all-local crew of eleven workers. It paid a total of $69,500 in wages to local residents (the community hall will pay out over $200,000 in wages by the time it is completed). The average hourly wage paid by the C&M crew was $9,50, and the employer's average cost per hour worked was $10.70.

The smaller C&M crew had a lower utilization rate. This apparently resulted from the two-quarter period, July through December 1983, which included the school crew's start-up and phase-out operations, but was an early part of the C&M crew's ongoing construction operations. The early termination rate for the C&M crew was twice that of the school, 44 percent to 22 percent.

A critical difference was the time frame for the two projects. The school was 85 percent completed in 6 months and completed in 9 months. The community hall took 15 months to be about 80 percent completed, and its start-to-finish time took about 2 years. By slowing down the construction schedule, significant amounts of on-the-job training became part of the work experience. Average hourly labor cost to the employer was almost three times higher on the school crew than the C&M crew. It consequently allowed little time for training and only fully experienced (mostly non-local) craftsmen were hired.

The Aniak experience appears to confirm our findings that a lengthened construction schedule, an operation that incorporates on-the-job training as part of the work experience, and wage rates that keep hourly labor costs to the employer in line with output appear able to produce a cost-effective, local, Native work force.

CONCLUSIONS

All modern businesses have a large number of jobs which are not particularly challenging or rewarding but which still must be reliably performed. These jobs are normally filled by persons who work primarily for the money, not for the satisfaction of the job itself. People hold these jobs first, of course, in order to buy the basic necessities of life. Beyond necessities, they may work to buy (1) material luxuries for status or pleasure, (2) recreational opportunities such as travel, or (3) they may desire to accumulate things—to possess wealth for its own sake.

Most persons living in village Alaska, however, are apparently not motivated to earn money beyond that needed for the basic necessities. Cultural values, along with a combination of subsistence, seasonal work, and government programs eliminate much of the fear of not having a job. Persons who want money in order to own, do, or accumulate things will find the opportunity cost living in village Alaska too high and will migrate to larger urban areas.

As a result, a modern business operating in village Alaska will not find a work force sufficiently motivated to fill its unsatisfying jobs in a reliable manner. A modern business consequently has three alternatives for developing its work force: (1) develop a personnel system and cost structure which can accommodate high turnover; (2) pay high enough wages to overcome the opportunity cost of persons with lower 48 motivations living in village Alaska; or (3) create a work place with a motivating environment while keeping wage rates at levels that allow substantial on-the-job learning without increasing the total costs of labor to employers.

Most employers in rural Alaska have chosen one of the first two alternatives (Lane, 1983, 1984; Lane and Thomas, 1985). The result has been a structural mismatch between labor demand and supply in the state's rural labor markets. High wages attract nonlocal labor, turnover rates are excessive, and local Native workers experience unacceptable rates of unemployment.

Both our research findings and our documentation of the Aniak case study suggest the third alternative is preferred. By developing an appropriate wage structure that allows for on-the-job learning of both work habits and occupational skills, employers can obtain a reliable work force at competitive costs, while local Natives can find meaningful employment opportunities. This result would, we believe, represent a significant improvement in the labor force status of Alaska's Native population.

NOTES

*The city did this by acting as its own general contractor and hiring its own work force, an administration technique known as "force account" construction.

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