How might COVID-19 affect the Indigenous labour market?

Macroeconomic shocks and the policy responses to those shocks have significant effects on Australia’s economy. However, research into impacts of such shocks on the Indigenous labour force is limited. This paper explores how the COVID-19 crisis is likely to affect Indigenous labour market outcomes in future. While this paper briefly examines the immediate consequences of the COVID-19 crisis for Indigenous economic outcomes, it discusses the likely longer-run consequences for Indigenous employment at some length. The sectoral concentration of Indigenous employment, the relatively high levels of casual employment and the relatively young age profile of the Indigenous population may increase Indigenous exposure to significant economic risks. Indigenous business disproportionately employ Indigenous workers, but such businesses are concentrated in small to medium enterprises that may be sensitive to recessionary conditions, especially if economic uncertainty leads to a more generalised financial crisis involving liquidity constraints. Recent history demonstrates that Indigenous employment rates have increased only gradually in the long period of macroeconomic growth leading up to the pandemic. Historical disadvantage, discrimination and geographical constraints are important drivers of the dynamics of Indigenous labour market disadvantage that limit educational attainment and ability to find work. For those Indigenous people who secure employment, it can be difficult to retain employment. COVID-19 is likely to lead to an intense period of structural adjustment in the economy, and it is important for the Indigenous community and businesses to position themselves to take advantage of potential opportunities and minimise potential risks. The ongoing digital divide may be a particular problem for Indigenous people accessing work remotely. Poor access to the internet of a substantial number of Indigenous households may also exacerbate access to remote education. Such issues have important implications for addressing Indigenous disadvantage in future.