Aboriginal and Torres Strait Islander workers earn 84 cents for every dollar earned by the average Australian worker, according to a national study released on Thursday by the University of Technology Sydney and Indigenous Business Australia.
That is a 15.9 per cent gap in hourly pay: $41.59 an hour against $49.46. Measured by annual income it is 18 per cent, or $15,041 a year. The researchers used 2022-23 tax records linked to Census data, covering 227 occupations that between them employ about 84 per cent of Indigenous workers.
The gap appears in all eight major occupation groups and in three-quarters of individual occupations, using the 5 per cent threshold the Workplace Gender Equality Agency treats as material. It is widest at the top. Indigenous professionals earn 19.5 per cent less an hour, and the report found a 34 per cent gap for environmental scientists.
The study tested the usual explanations and found they account for less than a third. Only 27 per cent of the gap comes from Indigenous workers being concentrated in lower-paid jobs, and about 2 per cent from hours worked. "The remaining 70.6% of the Indigenous Pay Gap is unexplained by occupational representation or hours worked," the report says.
“We've been told for years that this is about education, about experience, about the sorts of jobs our mob end up in, and we've tested every one of those explanations," said Professor Nareen Young, director of the UTS Centre for Indigenous People and Work. "So what is left is structural racism in the way work is valued and paid.”
The report is more cautious than that. It lists possible causes, including bias in hiring and promotion, weaker bargaining power and unpaid cultural work, but says these "are not directly measured in this analysis". It also warns against reading its economy-wide averages as like-for-like comparisons of identical workers, and notes that Jobs and Skills Australia data shows gaps narrowing where its own trend data does not.
The cost is put at $3 billion a year. Indigenous workers in the data earned $14.4 billion in 2022-23, against $17.4 billion under full parity, and the authors model about $170 billion in lost income by 2050. Indigenous Business Australia chief economist Dr Siddharth Shirodkar told AAP that lower lifetime pay means "lower superannuation balances and heavier reliance on the age pension", and that Closing the Gap employment targets are undercut if the people who find work are paid less than their colleagues.
Indigenous women sit at the bottom. On average they earn $41 an hour against $52 for all men, a 21 per cent gap, twice the 10 per cent gap between all women and all men in the same data.
The first of five recommendations applies to every worker. It would amend the Racial Discrimination Act 1975 to put a positive duty on employers to prevent racial discrimination, mirroring the duty already in the Sex Discrimination Act. The others are specific to Indigenous workers: adding Indigenous pay data to the employer reporting WGEA already collects, recognising cultural skills in wage setting, investing in career progression, and flexibility provisions for Indigenous caring obligations.
No response from Indigenous Australians Minister Malarndirri McCarthy, whose portfolio includes Indigenous Business Australia, had been published by Thursday morning. The authors say planned improvements to ATO earnings data would allow direct like-for-like comparisons in future studies.
