Consequences of Shutdown on The Crabbing Industry in Alaska

Repercussions of the Alaskan King Crab Shutdown

Introduction

In the year of 2013, the U.S. government shutdown from October first through the sixteenth in reaction to the political schism between the Republican-controlled House and the Democratic Senate regarding the Patient Protection and Affordable Care Act or, as Americans commonly know it, Obamacare and the legislative budget for the fiscal year of 2014. The bureaucratic chasm not only froze government spending and programs, it effectively slowed local and global businesses to a damaging halt.

As a result of the shutdown, approximately “[t]hree billion dollars were lost in government services” and about $2 billion dollars were lost from industry closures, particularly the Alaskan king crab industry, which plays a critical role in the Alaskan economy, as countless jobs relating to a specific trade were drastically damaged. With the federal standstill damaging multiple state and international businesses, Alaskan state legislators and federal representatives must now revise national policies to promote economic and social stability in order to recoup the lost revenue from the fishing industry closure and aid the individuals affiliated within the trade.

Economic Effects of the Federal Shutdown

Commercial fishing is one of Alaska’s major economic activities which is why many crabbers and fishermen, both local and international, were disgruntled with the repercussions of the shutdown on the fishing industry. An increasing lack of payment to employees were prevalent through the majority of Alaskan occupations, from fishermen to federal personnel, with approximately “16,390 civilians” affected by the shutdown. 3 This shared consequence of the inability to generate an adequate profit from commercial fishing has essentially left Alaskan legislators a massive workload; so, in order to regulate federal jobs while avoiding furlough, “federal offices are reducing hours” to avoid any additional layoffs.3

Unfortunately, mandatory furloughs precipitated the standstill of several jobs such as preventing the federally-run National Marine Fisheries Service from issuing permits to fishermen. Without permits, fishermen could not recoup their losses as the start of the season was already delayed and individual quotas for the season could not be distributed, preventing fishermen from acquiring the proper paperwork they needed to avoid the overreaching of their annual catch limits. Consequently, American fishermen and citizens are now blaming state legislators and federal representatives for their income losses.

Social Ramifications on the National Community

Although the economy was immensely overwhelmed by the shutdown, a social outcry was heard in America as a considerable amount of captains and fishermen had to subsist with reduced salaries. With “[r]oughly two-hundred million dollars” at stake, captains such as Keith Colburn, owner and operator of the Wizard, estimates that about thirty percent of his annual income will vanish. Scott Campbell Jr., who has worked for the Alaskan crabbing industry since the age of eighteen, is another individual affected by the shutdown. By the end of 2013, Campbell Jr. received a relatively low pay check of about $30,000 for his work during the crab season. In addition to the lowered paycheck, Campbell had to work extra jobs after the Alaskan crab season was over in order to support his family, similar to the many fishermen who depend on the Alaskan king crab season to sustain their families for the rest of the year.

The reverberating effects of this social unrest have prompted successive pleas from many affected citizens “calling for” Alaskan legislators to end the economic halt as soon as possible. Escalating social and economic pressure have sparked increased activity among legislators with the demand that they are “not on furlough”, demonstrating the significant correlation between federal activity versus the economic struggle of blue-collared workers. Meanwhile, rippling effects of the shutdown are also altering global businesses interwoven with Alaskan fishing waters.

The Japanese Markets and Illegal Fishing

Although various industries and fishermen, such as Captain Colburn, were impacted, there is also one other problem: the booming Japanese markets during the holiday season. Mark Gleason, executive director of Alaska Bering Sea Crabbers, states that “Japan drives the [] lucrative yet narrow business cycle” of the market, setting domestic and international prices for the season. In order to satisfy Japan’s “holiday appetite,” the season’s catch must be shipped to processing plants then exported to Japan by November, otherwise it could cause severe profit losses.

Alaskan king crab fishermen also fear the Russian crab industry will claw its way into the United States’ market share due to the government shutdown grounding boats on Alaskan ports. Mark Gleason explains that a bulk of “Russian product [is] in Japanese cold storage” and if Alaskan fisheries cannot deliver, then Russian markets could potentially take American profit as well as alter king crab prices. With risks such as illegal fishing harming the united market of Alaskan king crab, it is no wonder that many desire for this standstill to end.

Conclusion

The economic decline and social frustrations of the shutdown have become detrimental consequences of the unprecedented government shutdown on the crabbing industry, forcing Alaskan legislators and federal representatives into immediate action in order to ensure, not entirely commercial success, but financial survival. To prevent any further losses, Alaska state legislators should pass new maritime laws to allow temporary suspension of licenses in case of crisis so that fishermen can freely conduct their businesses in Alaskan waters while also enforcing an equal tax to compensate revenues for the Alaskan economy. Another potential resolution could be the distribution of federal subsidies to organizations that support the Alaskan king crab industry so that lost revenue can be reimbursed to fisheries and their employees while simultaneously reducing deficits and generating enough jobs for the Alaskan state. If federal and state laborers unite under the common of goal of defending America’s commonwealth then forthcoming financial, political, or ideological hardships and divisions can surely be conquered.