Increasing Indigenous employment rates Issues paper no. 3 produced for the Closing the Gap Clearinghouse

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Increasing Indigenous employment rates

Issues paper no. 3 produced for the Closing the Gap Clearinghouse

Matthew Gray, Boyd Hunter and Shaun Lohoar

March 2012


What we know

  • Indigenous Australians have much lower employment rates than other Australians.

  • Reasons for the lower employment rates include lower levels of education, training and skill levels (human capital), poorer health, living in areas with fewer labour market opportunities, higher levels of arrest and interactions with the criminal justice system, discrimination, and lower levels of job retention.

  • There has been a substantial increase in Indigenous employment over the period 1994 to 2008, especially in the private sector. It is important to have policies that both increase the demand for Indigenous workers and increase the number of Indigenous people who want paid employment and have the necessary skills to fill available vacancies.

What works

  • Increasing the skill levels of Indigenous Australians via formal education and training.

  • Pre-employment assessment and customised training for individuals in order to get Indigenous job seekers employment-ready.

  • Non-standard recruitment strategies that give Indigenous people who would be screened out from conventional selection processes the opportunity to win jobs.

  • The provision of cross-cultural training by employers.

  • Multiple and complementary support mechanisms to improve the retention of Indigenous employees is crucial. These may include:

  • ongoing mentoring and support

  • flexible work arrangements to allow Indigenous employees to meet their work, family and/or community obligations

  • provision of family support

  • dealing with racism in the workplace via initiatives such as the provision of cross-cultural training.

  • Wage subsidy and other labour market programs can be effective for Indigenous job seekers.

  • A strong macro-economy, which creates a range of new jobs.

  • Having explicit Indigenous employment goals for government programs that deliver goods or environmental or personal services.

What we don't know

There is only a limited understanding of the causes of Indigenous labour market disadvantage. In particular, relatively little is known about the following:

  • what influences whether Indigenous people seek paid employment and whether these influences are different from the non-Indigenous population

  • the effects on Indigenous Australians of changes to the income support system designed to encourage work force participation

  • the role played by employer practices and policies

  • the effectiveness of labour market programs that are not specifically aimed to Indigenous job seekers at increasing employment rates of Indigenous Australians

  • why more Indigenous Australians are not moving to areas with better employment opportunities

  • the extent of labour market discrimination against Indigenous Australians and how to reduce the levels of discrimination

  • whether, for some Indigenous people, there is a tension between cultural practices and maintaining paid employment.

So, what should governments do to continue to increase Indigenous employment rates? While the macro-economic conditions remain strong and there is employment growth, increasing the skills levels of as many Indigenous Australians as possible so that they can find employment should remain the priority. During a time of economic recession, the task will be much harder. A serious economic downturn is likely to have a bigger negative impact on the employment of Indigenous Australians. During such times, it will be important for governments to do whatever they can to help Indigenous Australians who lose their jobs to remain connected to the labour market, to become re-employed and to increase their skill levels via training and education.


Summary 5

What we know 6

What works 7

Contents 10

Introduction 11

Government policies aimed at increasing Indigenous employment 15

Recent history of Indigenous labour market policies and other major policies that impacted on Indigenous job seekers 16

Overview of current Commonwealth government policies 19

What do we know about the reasons for the low employment rate of Indigenous Australians? 22

Overview, methodological issues and studies examined 23

Human capital 26

Ill-health and disability 27

Location 28

Arrest 29

Discrimination 30

Job retention 31

How Indigenous people find employment 32

Multiple barriers to finding and sustaining paid employment 35

Overview, methodological issues and studies examined 38

Aboriginal Employment Development Policy (AEDP) 40

Indigenous Employment Program (IEP) 43

Summary of labour market program effectiveness 46

Examples of employer programs aimed at increasing Indigenous employment 47

Which policies and programs are most effective in increasing Indigenous employment rates? 52

List of abbreviations 54

Appendix 1: Analysis of recent trends in Indigenous employment 61

Appendix 2: Occupational status 65

Terminology 68

Funding 69

Suggested citation 70

Copyright 71

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