This article first appeared in Agitate, 23 June 2010

Open Labour Markets would solve Aboriginal Unemployment

Brendan Darcy

Recently the ABS released its annual employment statistics on Indigenous employment for 2009 and they didn't make pretty reading.

Sadly unemployment for Australian Aborigines and Torres Strait Islanders rose steeply between 2008 and 2009 from 14 per cent to 18 per cent. That's about 35,400 jobless Indigenous people aged 15 years and over.

The rate was highest in regional areas at 20 per cent, followed by major cities at 19 per cent and 10 per cent in remote areas. Male unemployment jumped by five percentage points and female by three.

The GFC explains some of the rise in the jobless rates: just as unemployment had risen sharply in the wider community---in early 2008 the rate bottomed at 3.9 per cent; during the GFC it peaked just under 6 per cent---it is only to be expected that Indigenous unemployment would also rise.

Given Australian Aborigines and Torres Strait Islanders are the least educated section of the community, they are more vulnerable than others in losing their slip in a weakening labour market.

Certainly the most significant rises in the indigenous jobless rates between 2008 and 2009 were in the resource states of Queensland (from 12 to 20 per cent) and Western Australia (from 11 to 20 per cent).

The rise can also be partially explained by the closing of Community Development and Employment Projects (CDEP) program in urban and regional areas which had historically hidden unemployment. CDEP is the Indigenous work for the dole program that actually paid participants a wage at the same rate as the dole and with no superannuation.

The ABS has labelled this as employment because the participants were technically wage earners. Because CDEP is restricted to remote communities, the ABS data continues to hide unemployment in remote areas. (The wage component of CDEP will be discontinued by July 2011, so the real unemployment rate is over 20 per cent.)

The Keating Government deliberately expanded the program during the early 90s recession to conceal unemployment. The effect of the program was to keep a generation of Indigenous youth non-engaged with the labour market and close to the poverty line.

All decent people would like to see the gap between Indigenous and non-Indigenous employment considerably narrowed.

The New Zealand experience at reducing Maori unemployment to single digit figures (although the rate is currently 13.5 per cent, the rate fell to about 7.5 per cent in 2007) shows the combination of targeted education programs, welfare reform and flexible labour markets do work.

There is no reason bold reform could not be effective in reducing Indigenous unemployment and poverty in Australia.

New Zealand championed open labour market policies. The open labour market represents opportunity, rewards for risk, builds skills, incomes and widens social networks and career options.

Perhaps the best thing about the open labour market is its ability to take people out of poverty, including Indigenous people who have historically enjoyed colonialisation's rough end of the pineapple.

Given the poor Indigenous jobless figures, 'Closing The Gap' and '50,000 Indigenous Jobs' targets appear to be two more of Kevin Rudd's over-promises.

Jon Altman from the ANU's Centre for Aboriginal Economic Policy Research (CAEPR) and chief critic of mainstreaming Indigenous jobseekers into active labour market programs seems to think so.

A vocal critic of the programs Mr Altman is a keen supporter of the reintroduction of CDEP. He recently wrote on Crikey criticising the government intervention in the Northern Territory.

His retro remedies to reduce the rate include the expansion of CDEP, the reintroduction of CDEP wages, increased funding for unviable, isolating outstations and softer welfare rules. Naturally enough CAEPR can only ever find sad and bad things arising from the 2007 Northern Territory Emergency Response and the Rudd Government's normalisation process, The Closing the Gap in the NT National Partnership.

CAEPR is also arguing for less mining close to indigenous communities: mining jobs are apparently assimilationist (read: Indigenous poverty is good) as a recent article in New Matilda highlights.

During the Keating and ATSIC years, CAEPR had been extremely influential in funding the failed policies of passive welfare and suboptimal service delivery in remote areas aimed at keeping people in remote areas. The failure of these policies can be demonstrated by fact that today 70 per cent of Indigenous Australians live in urban areas.

Perhaps the good news about Indigenous unemployment is that neither side of politics takes CAEPR seriously.