Issue Brief 1 / 1996

The Aboriginal Employment Development Policy launched in 1987 greatly boosted expenditure on labour market programs for Indigenous people wanting work. According to the Department of Employment, Education, Training and Youth Affairs (DEETYA), each year:

• around 22,000 Indigenous people are placed in mainstream programs
• about 10,000 are placed in programs specifically for Indigenous people.

Between 1990 and 1995:

• 137,000 Indigenous placements were made in various types of labour market assistance on behalf of 71,000 clients.
• A higher rate of assistance was provided to Indigenous clients than to other DEETYA clients for example, in 1994/95, 68 per cent of Indigenous people who registered with the CES were placed in labour market programs compared to 41 per cent of all clients.

Positive outcomes

The 1994 National Aboriginal and Torres Strait Islander Survey (NATSIS), shows that education and training will increase employment prospects for Indigenous people. For example it found that:

• people who had attended a training course double their likelihood of being employed
• those with a vocational qualification are three times as likely to be employed as people without post-school qualifications
• completing secondary school doubles the chance of being employed
• leaving before completing Year 10, which was what more than half of Indigenous adults had done, greatly decreases employment chances.

Encouragingly, there is a slowly increasing number of Indigenous young people completing Year 12 and moving into tertiary education. This, and their participation in labour market programs, means that we could expect to see an increase in the number of Indigenous people who are employed, all other things being equal.

Problems

Recent employment growth rates failed to keep up with growth in the Indigenous population of working age.

• Between 1991 and 1994, 3,300 jobs were created for Indigenous people (5 per cent increase in employment), but the adult Indigenous population increased by 12,000, or 7 per cent.
• This meant that the proportion of Indigenous adults in work fell from 35 to 34 per cent.

As the working-age component of the Indigenous population will be about 50 per cent greater by the year 2001, a CAEPR estimate of the new jobs required annually to approach equity with other Australians is 7,500. The task ahead remains daunting when the low rate of job growth for Indigenous people in the early 1990s is considered. At present, it seems, the net annual level of job growth is just over 1,000.

Jobs for Indigenous people in the mainstream labour market appear to be in decline.

• All the recent growth in employment has been due to expansion of participation in the CDEP scheme - over one-quarter of all jobs for Indigenous people are now derived from the CDEP scheme. Without this, the employment/population ratio would be half of its already low level and unemployment would be almost twice as high.

Analysis

How should this lack of mainstream job growth in the face of increased education and training be interpreted? Does it add to the evidence of the ineffectiveness of training and job programs to move people into work?

Conventional arguments about the usefulness of labour market programs suggest that programs help those who would have found jobs anyway, or that program participants find work at other people's expense. These arguments do not hold for Indigenous people. This is because they often live in areas where there are few or no jobs and, also, there are other factors which significantly constrain Indigenous people's employment. For example, NATSIS found that being arrested affected the chance of future employment. Given that approximately one-fifth of the Indigenous adult population said that they were arrested in the five years before the survey, this must have had a great impact on employment levels. Also, the average life expectancy of Indigenous people is about 20 years lower that for non-Indigenous Australians and health status is far worse. Such factors continue to place severe limits on people's ability to secure employment.

Conclusion

Low employment levels among Indigenous Australians are as much an indication of entrenched disadvantage in a labour market which is becoming more competitive, as they are of policy failure. The message to government is that there are no quick fixes and that achievements to date lie on fragile foundations.

This Issue Brief summarised CAEPR Discussion Paper No. 108 by J. Taylor and B. Hunter published in May 1996. It was prepared by Linda Roach assisted by Melissa Lucashenko and edited by Maureen MacIntyre-Taylor.