Aboriginal Employment and Unemployment

from: Aboriginal Economic Development

The Data

Employment Profile by Location and Aboriginal Identity
	Canada			Off-Reserve	On-Reserve
	Aboriginal and Non-Aboriginal	Non-Aboriginal	Aboriginal	Aboriginal	Aboriginal
2006 CENSUS
Population 15 years and over	25,664,225	24,840,330	823,895	619,815	204,080
In the Labour Force	17,146,135	16,626,880	519,255	412,700	106,555
Employed	16,021,180	15,578,785	442,395	362,210	80,185
Unemployed	1,124,955	1,048,095	76,860	50,490	26,370
Not in the Labour Force	8,518,090	8,213,450	304,640	207,115	97,525
Participation Rate	66.8%	66.9%	63.0%	66.6%	52.2%
Employment Rate	62.4%	62.7%	53.7%	58.4%	39.3%
Unemployment Rate	6.6%	6.3%	14.8%	12.2%	24.7%
2001 CENSUS
Population 15 years and over	23,901,360	23,249,015	652,350	471,145	181,205
In the Labour Force	15,872,075	15,471,640	400,435	306,050	94,385
Employed	14,695,140	14,371,190	323,945	255,565	68,380
Unemployed	1,176,935	1,100,450	76,490	50,485	26,005
Not in the Labour Force	8,029,285	7,777,375	251,915	165,095	86,820
Participation Rate	66.4%	66.5%	61.4%	65.0%	52.1%
Employment Rate	61.5%	61.8%	49.7%	54.2%	37.7%
Unemployment Rate	7.4%	7.1%	19.1%	16.5%	27.6%

Notes to the Table

1. Source: Statistics Canada: 2001 Census and 2006 Census
2. Definitions:

Labour Force=Looking for work or employed
Not in the Labour Force=Not looking for work and not employed
Participation Rate=Number in the labour force divided by the population over 15 years.
Employment Rate=Number employed divided by the population over 15 years.
Unemployment Rate=Number unemployed divided by the labour force.

3. Some First Nations were not included in the Census, while others were incompletely enumerated. Consequently, Census numbers for Aboriginal people on reserve underestimate the total. If the First Nations that were either not included in the Census or were incompletely enumerated were representative of First Nations generally, then the participation, employment and unemployment rates should be relatively accurate.

The Story Behind the Data

The participation rate (i.e. the percentage of people 15 years and over who are participating in the economy by looking for work and who are therefore employed or unemployed) among Aboriginal people on reserve is markedly different from the participation rate among Aboriginal people off reserve and non-aboriginal Canadians. The participation rate among Aboriginal people on reserve was 52.2 percent in 2006 and 52.1 percent in 2001. The participation rate among Aboriginal people off reserve was 66.6 percent in 2006 and 65.0 percent in 2001, numbers which are in line with non-Aboriginal Canadians (66.9 percent in 2006 and 66.5 percent in 2001). There are several interpretations to the low Aboriginal participation rate on reserve:

there are no jobs available on or near reserves;
there may be jobs available on or near reserves but Aboriginal people on reserve do not believe they will get them;
Aboriginal people on reserve believe they can live adequately without working. "Living adequately" does not mean they are living well. "Living adequately" may mean that when most people are poor, there is little peer pressure to acquire additional income once basic needs are met.

The Aboriginal unemployment rate on reserve fell from 27.6 percent in 2001 to 24.7 percent in 2006. By comparison, the unemployment rate among non-Aboriginal Canadians was 7.1 percent in 2001 and 6.3 percent in 2006.

The number of employed Aboriginal people on reserve rose from 68,380 in 2006 to 80,185 in 2001, representing a growth rate of 17.3 percent.

The Aboriginal unemployment rate off reserve fell from 16.5 percent in 2001 to 12.2 percent in 2006.

The number of employed Aboriginal people off reserve rose from 255,565 in 2001 to 362,210 in 2006, representing a growth rate of 41.7 percent.

The number of additional employed Aboriginal people on reserve needed to have an unemployed rate equal to non-Aboriginal Canadians (the employment gap) in 2006 was 19,657. The number of additional employed Aboriginal people off reserve needed to have an unemployment rate equal to non-Aboriginal Canadians in 2006 was 24,490. The number of additional employed Aboriginal people on and off reserve needed to close the "employment gap" in 2006 was 44,147.

Governments spend money to create jobs. The amounts they spend are usually determined by a combination of the need for jobs and the opportunities to create new jobs or facilitate access to existing jobs. Looking at the Aboriginal unemployment issue strictly from a need perspective, an Aboriginal employment gap on and off reserve would suggest one time public expenditures of about $1.32 billion to address the Aboriginal unemployed in 2006, assuming a cost of $30,000 per job. Public expenditures would presumably cover a range of activities such as training, job counseling, Aboriginal business development, hiring incentives, initiatives giving job experience, etc. These one-time costs would presumably also be spread over a number of years. If opportunities are factored in, the public expenditures would presumably be reduced.

In allocating these expenditures between Aboriginal people on and off reserve, not taking into consideration opportunities and all other factors being equal, the split would be 44.5 percent on reserve and 55.5 percent off reserve based on the employment gap. The participation problem on reserve suggests, however, that all other factors are not equal and suggests that more than 44.5 percent would need to be spent on reserve.