The relative labour force status of Indigenous people, 1986-96: A cohort analysis

Author/editor: Hunter, B, Gray, MC
Year published: 1998
Issue no.: 164

Abstract

The availability of the initial labour force estimates for the 1996 Census allows us to take stock of the long-run changes in the Australian workforce. For the Aboriginal and Torres Strait Islander population, the census estimates represent the only reliable yardstick for progress, or lack of progress, in improving employment outcomes. This paper presents cohort analysis of changes in labour force status over the last three censuses for the Indigenous and non-Indigenous populations.

Changes in employment, 1986-96

  • The raw employment statistics imply that Indigenous employment improved in both absolute and relative terms. The Indigenous male employment/population ratio for the working-age population increased by 5.6 percentage points between 1986 and 1996, in contrast to the non-Indigenous male ratio which fell by 4.0 percentage points. The Indigenous female ratio for the working-age population increased by 9.8 percentage points between 1986 and 1996, in contrast to the non-Indigenous female ratio, which increased by 5.7 percentage points.
  • For every Indigenous cohort, the lifecycle changes in the employment/population ratio exhibit a larger increase, or smaller decrease, than for the equivalent non-Indigenous cohort.
  • When Community Development Employment Projects (CDEP) scheme employment is excluded there appears to be a worsening of the employment/population ratio for the total Indigenous male population. The male Indigenous employment ratio also worsened relative to the non-Indigenous ratio. For Indigenous females there remains an absolute increase in the employment ratio, and there remains an improvement relative to the female non-Indigenous population.
  • The fall in the non-CDEP employment/population ratio for Indigenous males and females aged 15 to 24 years is of particular concern given the increases in educational participation of this group.
  • In principle, it would also be desirable to exclude labour market programs which could be considered as employment. Unfortunately, reliable data on the age breakdown of labour market programs for 1986 are not available and thus no adjustments are made for the effects of labour market programs in the cohort analysis. However, it is worth reflecting upon the effect of such programs at the time of the 1996 Census. First, the majority of labour market program places go to young workers. Second, Indigenous people are up to five times more likely to be in labour market programs than non-Indigenous people. Third, for both the Indigenous and non-Indigenous populations, for all age groups, males are more likely to be in labour market programs than females. Given the substantial variation in distribution of such programs across the lifecycle and between Indigenous and non-Indigenous Australians, the fall in the non-CDEP employment/population ratio for Indigenous persons aged 15 to 24 years is even more of a problem than previously indicated.
  • In line with trends for the non-Indigenous population, the Indigenous participation rate has fallen for males and increased for females. The low Indigenous participation rate in every age group, combined with the low levels of employment, provides evidence that there is a net discouraged worker effect operating on Indigenous workers. The process by which Indigenous people are discouraged from participating in the labour force is even observed for the youngest cohort. This is particularly troubling for policy makers since participation appears to be constrained even before Indigenous people have had the opportunity to enter the workforce.
  • For Indigenous males aged 15 to 44, the proportion of the population working full time decreased between 1986 and 1996. Similarly, for non-Indigenous males aged 15 to 64, the proportion of the population employed full time fell substantially. However, for the cohort aged 15 to 44, there was a major larger fall in the proportion of those employed who were working full time. For Indigenous and non-Indigenous females, with the exception of 15 to 24 year-olds, there were increases in the proportion of the population employed full time.
  • In general, the macro trends in the non-Indigenous workforce since 1986 are reflected in Indigenous employment and unemployment. The major exception to this rule is in the public sector where Indigenous workers have increased their share in employment, despite a significant winding back of employment among government and statutory employers. Since the public sector is now the only part of the economy in which Indigenous people are employed in the same proportions as other Australians, a further curtailment in this sector will inevitably have an adverse impact on Indigenous employment outcomes.
  • There is some weak evidence of a relative improvement in the number of self-employed among the Indigenous population between 1991 and 1996. The ratio of self-employment rates among the Indigenous and non-Indigenous workforce increased from 0.26 to 0.31 in the last inter-censal period. This relative improvement in self-employment rates among those in the labour force builds on the low historical numbers with this ratio being only 0.15 in 1986.

The international context for Indigenous labour force status

The employment/population rates for Indigenous peoples in the United States, Canada and Australia show that Indigenous people have poor employment prospects in what are indisputably different labour market conditions.

  • In the more deregulated systems of the United States and Canada there are groups of Indigenous people who have lower employment rates than the Australian Indigenous population. For example, Indians on reservations are about five percentage points less likely to be employed than their Australian counterparts.
  • Not only are Indigenous people less likely to be employed than other citizens but they are, on the whole, much more likely to be unemployed if they are active in the labour market. The high unemployment combined with a low participation rate provides evidence of a net discouraged worker effect in the Indigenous population.
  • Indigenous Australians have markedly lower rates of self-employment than the New Zealand Maori, but are only slightly less likely to be self-employed than Canadian Indians off reserves. The self-employment rate for Canada's Indian reservation population was 2.2 per cent in 1990 compared to 2.7 per cent among Australia's Indigenous workers at the analogous census.

ISBN: 0 7315 2599 X

ISSN:1036 1774

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