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The Aboriginal Labour Force Analysis Series
Aboriginal People Living Off-reserve and the Labour Market: Estimates
from the Labour Force Survey, 2007
by Dominique Pérusse
Aboriginal People Living Off-reserve and the Labour Market: Estimates from the Labour Force Survey, 2007
1 Analysis
1.1 Aboriginal people constitute a sizable workforce
At a time when the unemployment rate is historically low and there are inflationary pressures on wages, some sectors of the economy are looking for workers. To meet the demand, populations of all types must be courted; this includes employing retired persons and bringing in foreign workers.
The Aboriginal population, consisting of North American Indians, Métis and Inuit, 1 is also one of the populations with a great potential for expanding the labour force. Firstly, the Aboriginal population is young and growing. 2 Secondly, its employment rate is still well below that of non-Aboriginal people. In 2007, the unemployment rate for Aboriginal people was almost double the rate for non-Aboriginal people.
According to the census data, unemployment rates declined and employment rates rose between 2001 and 2006 for persons who identified as Aboriginal people. Nevertheless, substantial gaps persist between Aboriginal and non-Aboriginal people. This study, based on LFS data for 2007, enables us to provide a more recent picture of the labour market status of Aboriginal people living off-reserve. This new source of information on Aboriginal people will make it possible to track the situation annually and might, for example, support programs for integration into the labour market and access to good jobs.
Aboriginal people living off-reserve represent a important labour force: in 2007, 345,000 Aboriginal people were participating in the labour market in the ten provinces. For purposes of comparison, the total supply of Aboriginal labour was equivalent in size to the labour force of four major cities combined, namely Saint John in New Brunswick, Sherbrooke, Kingston and Regina. Among Aboriginal participants in the labour market, 250,600 were employed full time, 57,800 were employed part-time and 36,500 were unemployed.
Overall, the Aboriginal population living off-reserve did not fare as well on the labour market in 2007 as the non-Aboriginal population. All age groups combined, the employment rate for Aboriginal people, at 59.0%, was below the rate of 63.6% for non-Aboriginal people. By the same token, the unemployment rate, at 10.6%, remained well above the non-Aboriginal rate of 5.9%.
However, a portion of these disparities is due to the fact that the Aboriginal population is relatively younger (see Table 1), and young people usually have a lower employment rate than adults. It is therefore preferable to study labour market status by age group, so as to limit the effect of age.
The analysis that follows will deal separately with the main working-age group (those aged 25 to 54), youths and older workers. In an effort to account for the diversity of Aboriginal peoples, the analysis will, when possible, distinguish between the separate identity groups: North American Indians, Métis and Inuit. Other major factors will also be examined, such as province, education, and the characteristics of jobs held.
Other factors are not examined in this study, such as the high rate of lone parenthood and the larger number of children per family. These factors might explain some differences observed with respect to labour market status.
Since the LFS data on Aboriginal people have been available for a few years now for the Western provinces (see the section Source, data history and definitions), a section will be devoted to trends from 2004 to 2007.
1.2 Ages 25 to 54
1.2.1 Aboriginal people less likely to participate in the labour market
Persons aged 25 to 54 are generally those most likely to participate in the labour market and have a job, since they have most often completed their education and have not yet retired. However, labour market participation depends on socio-demographic characteristics as well as personal and cultural factors. Thus, employment status could be influenced by a number of factors including one’s age when, say, getting an education, having one’s first child or retiring; the presence of children in the home and the parent’s age; the number of children and their age; and lone parenthood. These factors, along with the availability of jobs, might, in part, explain the differences in Aboriginal people’s labour market outcomes.
Aboriginal people aged 25 to 54 living off-reserve in Canada’s provinces did not, in 2007, fare as well in the labour market as non-Aboriginal people. Firstly, the proportion of Aboriginal people participating in the labour market was smaller: their participation rate was 76.9%, compared to 86.8% for their non-Aboriginal counterparts, with the gap being greater for women (see Table 2). Secondly, within the labour force, a greater proportion of Aboriginal people swelled the ranks of the unemployed. The unemployment rate for Aboriginal people was 8.8%, whereas for non-Aboriginal people it was 5.0%.
1.2.2 Labour market integration varies with identity
Employment status varied according to Aboriginal identity. The employment rate was 66.1% for North American Indians living off-reserve aged 25 to 54, whereas it was 82.5% for non-Aboriginal people. Also, the unemployment rate of North American Indians (10.5%) was more than double that of non-Aboriginal people (5.0%).
The employment rate for Métis was 74.3%, which was 8.2 percentage points below the rate for non-Aboriginal people. Métis also had a higher unemployment rate (7.3%) than non-Aboriginal people (5.0%).
The prevalence of part-time work was similar among non-Aboriginal people, North American Indians and Métis; with part-time rates ranging from 11.5% to 13.0%. Part-time rates were also similar among men in the different identity groups (from 4.6% to 7.2%) and among women (19.0% to 20.7%).
For Inuit, the size and distribution of the LFS sample in the ten provinces was insufficient to differentiate their participation and employment rates from those of the other groups. Data from the 2006 Census showed that their employment rate (62.9%) was lower than that of non-Aboriginal people (81.6%). The Inuit had an unemployment rate more than three times higher than that of non-Aboriginal people (18.3% versus 5.2%, respectively). 3
1.2.3 Greater disparities in Saskatchewan, Quebec and Manitoba
Aboriginal people’s employment rate was highest in Alberta, where it reached 77.7% in 2007 (see Table 3). The strength of the labour market appears to have been beneficial to both non-Aboriginal and Aboriginal Albertans. It was in Alberta that the employment rates of the two groups were the closest. Also, the North American Indians and Métis in that province had similar employment rates.
On the other hand, in Saskatchewan, even though that province had the highest overall employment rate for persons aged 25 to 54, Aboriginal people do not appear to have benefited as much from the strong labour market in 2007. Saskatchewan was the province with the largest gap in employment rates between the Aboriginal and non-Aboriginal people. The gap between Aboriginal and non-Aboriginal employment rates was also large in Quebec and Manitoba.
Chart 1
Employment rate of population aged 25 to 54 by province or region, 2007
The employment rate of North American Indians living off-reserve in Manitoba (58.5%) and Saskatchewan (56.2%) was approximately 30 percentage points lower than that of non-Aboriginal people. In Quebec, their employment rate (58.8%) was 23 percentage points lower than that of non-Aboriginal people.The gap was narrowest in Alberta (9 percentage points).
The Métis employment rate was close to 69% in Quebec, the Atlantic region and Ontario. Employment rates were higher in the other provinces, especially Manitoba (77.8%) and Alberta (78.2%). The employment rates of Métis were lower than those of non-Aboriginal people in each province or region, with the gaps ranging from 8 to 14 percentage points.
For the Atlantic region and for each of the other provinces, the unemployment rate of Aboriginal people was consistently higher than that of non-Aboriginal people. The gap was especially large in Saskatchewan, where the Aboriginal unemployment rate was 10.6% compared to 2.9% for non-Aboriginal people. The Atlantic region had the highest unemployment rate in Canada both for non-Aboriginal people (8.1%) and for Aboriginal people (14.0%).
In the Atlantic region in 2007, the participation rate of Métis (80.5%) was close to that of non-Aboriginal people (84.5%). However, Métis had a higher unemployment rate of 14.4%, than the 8.1% for their non-Aboriginal counterparts.
1.2.4 Aboriginal labour force more represented in certain industries
Aboriginal people work in all industries of the economy, but are concentrated in different industries than their non-Aboriginal counterparts. Aboriginal people were approximately two times more likely to be employed in natural resources and two times less likely to be employed in professional, scientific and technical services; and finance and insurance than non-Aboriginal people.
Aboriginal workers were also somewhat more represented in construction; in health care and social assistance; and in public administration, while they were less likely to be working in manufacturing than non-Aboriginal people.
Chart 3
Distribution of jobs of population aged 25 to 54 by industry, 2007
1.2.5 Education reduces job disparities
Like their non-Aboriginal counterparts, Aboriginal people living off-reserve in the ten provinces who had a higher level of education also had a higher employment rate than those who had not completed post-secondary studies. Thus in 2007, the employment rate of Aboriginal people aged 25 to 54 with a post-secondary certificate or diploma or a university degree was 80.2%, compared to 70.4% for those who graduated from high school, and 51.2% for those who had not finished high school (Table 4).
Education also reduces the employment rate gap between Aboriginal and non-Aboriginal people. Aboriginal people with a post-secondary certificate or diploma or a university degree had an employment rate 6.3 percentage points lower than their non-Aboriginal counterparts. On the other hand, the gap was 14.3 percentage points for those without a high school diploma.
However, the gaps in the employment rates between Aboriginal and non-Aboriginal people persist at all education levels.
Education also tends to reduce the unemployment rate for Aboriginal people. The difference in unemployment rates is especially pronounced between those who do not have a high school diploma and those who have one; in 2007, the unemployment rate between these two Aboriginal groups was 14.2% compared to 8.0%.
Chart 4
Labour force characteristics of population aged 25 to 54 by educational attainment, 2007
Having a non-university post-secondary diploma or certificate improves the employment rate for Aboriginal people, but this is not the case with the unemployment rate. Aboriginal people who had completed non-university post-secondary education in 2007 had a higher employment rate (78.9%) than those who only completed high school (70.4%). But, since more of them were looking for work, the unemployment rate for Aboriginal people who had completed non-university post-secondary education (7.9%) was similar to the rate for those who had only completed high school (8.0%).
1.2.6 Wage disparities
On average, Aboriginal people received an hourly wage 12% lower than that of non-Aboriginal people in 2007 (Table 5). Wage gaps were observed among both men and women; in the Atlantic region and in all the other provinces; and within most industries. The gaps also persisted regardless of whether or not Aboriginal people had completed a post-secondary education. For all provinces combined, North American Indians aged 25 to 54 averaged $19.33 per hour, Métis $20.09 and non-Aboriginal people $22.33. It should be noted that these data are for employees only and reflect the wage received, including tips and commissions, before tax and other deductions.
1.3 Youths aged 15 to 24
The data on youths include all persons aged 15 to 24, whether in school or not. In 2007, 43% of Aboriginal youth were in school, compared to 50% of non-Aboriginal youth. The age at which young people are in school and complete their education is one of the factors that may explain differences in employment and unemployment rates between Aboriginal and non-Aboriginal people.
1.3.1 Unemployment rate high among Aboriginal youth without a high school diploma
One-quarter of working-age Aboriginal people are youths aged 15 to 24, and many of them are unemployed. While the unemployment rate for young non-Aboriginal people was already high at 11.0%, it was even higher for young Métis (14.9%) and for young North American Indians living off-reserve (18.7%) (Table 6). According to data from the 2006 Census, young Inuit in the provinces had the highest unemployment rate, at 24.7%.
While unemployment is high among young Aboriginal people without high school, those who have completed high school are more successful in finding a job. The unemployment rate for young Aboriginal people was half as high among those with high school completion or some post-secondary (12.2%) as among those who had no high school diploma (24.1%).
As is the case with workers in the main age group, education enables young Aboriginal people to reduce the gaps separating them from their non-Aboriginal counterparts in the labour market. The employment rate for young Aboriginal people who had completed high school was 64.1%, a rate comparable to that of their non-Aboriginal counterparts (65.9%). On the other hand, the employment rate of young Aboriginal people without a high school diploma was 35.2%, or 8.1 percentage points below that of non-Aboriginal people.
Chart 5
Labour force characteristics of youths aged 15 to 24 by educational attaintment, 2007
The low employment rates for youths in Quebec apply equally to Métis and non-Aboriginal people, whose rate is 58.3%. The picture is similar in the Atlantic region, where young Métis and non-Aboriginal people have comparable employment rates of approximately 55%. In the Atlantic region, the employment rate of young North American Indians living off-reserve was lower than for the other two groups, at 40.3%.
Manitoba and Saskatchewan had the lowest employment rates for young North American Indians living off-reserve, at 28.1% and 36.8% respectively. The highest unemployment rate by province and identity was observed in Manitoba, where one North American Indian in three was unemployed.
Chart 6
Employment rate of youths aged 15 to 24 by aboriginal identity and province or region, 2007
The two main industries in which both Aboriginal and non-Aboriginal youths were working were retail trade and accommodation and food services.
1.4 Workers aged 55 and over
Unlike younger Aboriginal people, those aged 55 and over had an employment rate as high as or higher than their non-Aboriginal counterparts. The employment rate of older North American Indians (32.3%) was similar to that of non-Aboriginal people in the same age group (31.7%), while the Métis employment rate was higher (36.4%). Because older Aboriginal people were also more likely to be participating in the labour market, the unemployment rate of older Aboriginal people (8.1%) was higher than that of non-Aboriginal people (4.8%).
1.5 Employment trends in the Western provinces
From 2004 to 2007, the employment rate of North American Indians aged 25 to 54 living off-reserve in the Western provinces grew slightly more rapidly than that of non-Aboriginal people. Even so, their employment rate in 2007 (65.7%) remained substantially below that of non-Aboriginal people (84.7%). The Métis employment rate remained relatively stable during this period and stood at 76.5% in 2007.
The strongest increases in the employment rate of Aboriginal people living off-reserve from 2004 to 2007 were observed in Saskatchewan and Alberta. The employment rate of Aboriginal people aged 25 to 54 in Saskatchewan went from 63.5% in 2004 to 66.4% in 2007. In Alberta, the employment rate was already the highest, but it increased even more rapidly than that of Aboriginal people in the other provinces, reaching 77.7% in 2007. Alberta’s job market was very dynamic in 2006 and 2007. Non-Aboriginal Albertans also saw an increase in their employment rate, which rose from 85.1% in 2004 to 86.3% in 2007. Since the employment rate of Aboriginal people rose more rapidly than that of non-Aboriginal people, the gap between the two groups narrowed.
The unemployment rate of Aboriginal people living off-reserve fell in all four Western provinces during this period. It dropped by about 3 percentage points in Alberta, Manitoba and Saskatchewan, but the decrease was even more remarkable in British Columbia. This province’s high unemployment rate of 16.2% in 2004 for Aboriginal people declined each year, falling to 8.4% in 2007. This narrowed the gap between the Aboriginal and non-Aboriginal 25 to 54 year-olds , as during this period the unemployment rate of non-Aboriginal people in British Columbia declined from 5.5% to 3.4%. Saskatchewan’s Aboriginal people are now those whose unemployment rate is the highest in Western Canada, at 10.6%.
