Reeling From the ‘Year Without a Sam’s Club,’ Alaskans Wonder: What’s Next?
Posted August 16, 2018 5:59 a.m. EDT
FAIRBANKS, Alaska — Monica Laakso, a bar manager married to a utility lineman, saw her monthly food bill jump by $200. The Fairbanks Senior Center had to eliminate cookie treats from its Meals on Wheels program. And Benny Lin, owner of the Pagoda Restaurant, got a shock when the price of salt tripled just about overnight.
Sam’s Club, the discount bulk retailer, closed down more than 60 of its stores this year, from Baton Rouge to Cincinnati, and much of America shrugged it off in the midst of an economic boom. But in Alaska, and especially in Fairbanks, Sam’s exit was a thunderclap and a symbol of an anxious new economic chapter for the state.
“What comes next?” said Christina Wright, who runs a business, Cakes by Christina, from her Fairbanks home and saw the price of ingredients increase by 30 percent. In a place where huge distances and a tough climate make buying in bulk essential, the departure of Sam’s meant people suddenly were dependent on traditional grocery stores with higher prices.
Stretching back to Alaska’s days as a territory and through its boom years of oil production, the powerful mythology of this state has been that open-ended opportunity came with the vast landscape and traditions of limited government.
But the Year Without a Sam’s, as some people are calling it, has exposed new rifts in the identity Alaska has cultivated, as the economy has sunk amid a drop in oil prices and production. Unemployment, at 7.1 percent, is the highest in the nation. Even the state’s secret demographic weapon — its romantic appeal as a place to start afresh — seems to have ebbed, with more people moving out over the last five years than moving in, for the first time since at least World War II.
Against this backdrop, Alaskans will go the polls next week in a primary election for governor that could set up a stark discussion of the state’s future, as Gov. Bill Walker, an independent seeking a second term, faces challenges this fall from his left and his right.
Walker — whose first term was shaped by recession, as the drop in oil prices and production dragged down the state budget — portrays himself as a tested leader willing to make hard decisions and take decisive action.
But in some ways, the election has become a referendum on taking action at all. Walker repeatedly proposed new taxes to fix a multiyear shortfall in the state budget, including the restoration of an income tax, which was abolished decades ago when oil money made it unnecessary. The state Legislature — Republican-led in the Senate, but divided in the House with a Democratic-led, two-party coalition — thwarted those plans. It instead cut education funding and local aid to cities like Fairbanks, where many public buildings, constructed in the 1970s as the oil boom hit, have started to crumble.
Mike Dunleavy, a former state senator who led much of the charge against Walker’s ideas in the Legislature, has been seen as the leading candidate in a Republican primary that includes Mead Treadwell, a former lieutenant governor.
On the Democratic side, Mark Begich, a former U.S. senator and mayor of Anchorage, also has pledged to reverse decisions that have come out of Juneau, the capital, in recent years. He has promised to diversify the economy with more renewable energy and job training, and make the state a global center for climate change research and science.
As the election has approached, new challenges have emerged for Alaska. When oil and construction jobs faded, for example, Alaskans noted that commercial fishing, like tourism, was still strong. Then came a trade war with China. “It’s kind of like a gang tackle at the Seahawks game and then somebody piles on,” Joe Morelli, chief executive at Seafood Producers Cooperative. Morelli said a 25 percent tariff on seafood exports to China could rip through his company’s biggest growth market — black cod. (Love for Seattle’s professional football team, the Seahawks, is part of Alaskan life, too. Though the team plays 1,500 miles from Fairbanks, it’s the closest thing to a home team for a state spread over an area four times the size of California.) “The last thing Alaska needs right now is another hit,” Morelli said.
Alaska’s 740,000 residents have found that outside forces are leaving their mark on a place that thrives on self-determination. The state has reeled as decisions came from the board of Walmart, Sam’s owner, from tariff policymakers in Washington and Beijing on matters that threaten the nation’s biggest commercial fishing fleet, and from the big oil companies that have shed thousands of jobs. Alaska remains a place of ambition and hope, but many residents seem unsure what the next chapter will look like, and who will write it.
For all the storm clouds, Alaska is nowhere near economic collapse. The $65 billion Permanent Fund, a savings account built from taxes collected on oil, was bolstered as oil prices boomed during the Great Recession, even as the rest of the nation suffered; it still spits out annual dividends to residents. The U.S. Air Force is promising to move thousands of troops and their families to the Fairbanks area starting next year, with a buildup of the F-35 jet program. Oil prices have risen from their lows, a crucial boost to the state budget. Amazon, delivering almost anything almost anywhere, has eased the pain of Sam’s departure for some.
And Costco, a competitor to Sam’s Club, has told residents it will move into Sam’s old space in Fairbanks later this year.
Still, the effects of the Sam’s demise have lingered, especially in remote villages that are off the road system reachable only by air or water. There, bulk-buying runs to Sam’s to fill larders and freezers, and stock the shelves of village stores, were part of life.
“Every person I know, in every village, had a Sam’s card,” said Larry Bredeman, who lives about four hours up a partly gravel road from Fairbanks, and said that almost everything he wore and ate came from Sam’s.
Bredeman, 67, and his brother in law, Ray Woods, have now made two trips — about 1,000 miles around trip by car — to pick up supplies in Anchorage from a Costco there, including hundreds of pounds of dog food for Woods’ 17-dog sled-racing team.