Aboriginal and Torres Strait Islander workers earn an average of 84 cents for every dollar earned by other Australian workers, a new Indigenous-led study has found, amounting to a $3 billion annual shortfall in wages.
The study, Towards Indigenous Pay Parity, found a 16 per cent gap in average hourly pay and an 18 per cent gap in annual income between Indigenous and Australian workers.
If the disparity continues, the researchers estimate that the cumulative loss in income could reach about $170 billion by 2050.
The report was produced by the Centre for Indigenous People and Work and Indigenous Business Australia, using linked data from the Australian Taxation Office and the 2021 Census to examine pay across hundreds of occupations.
The analysis covered 227 occupational categories and included almost 212,000 Indigenous workers (about 84 per cent of the Indigenous workforce) alongside 9.8 million Australian workers.
Worimi man Joshua Gilbert, assistant director of the Centre for Indigenous People and Work and one of the researchers behind the study, said the findings needed to be understood in the context of a much longer history of Indigenous labour being undervalued.
“The foundation of the modern economy has been built on the unpaid work of our people, where wages weren't considered necessary," Gilbert said at the launch of the report.
Gilbert pointed to his own Country as an example.
He said more than a million acres of Worimi land had been granted to the Australian Agricultural Company in 1824, with company records later describing Aboriginal women 'cheerfully' performing work for little remuneration in food and clothing.
“On Country, my Worimi Country, these words and their impact still affect me,” he said.
The history of unequal wages continued well into the 20th century. Gilbert cited industrial cases from the 1960s in which Aboriginal workers on cattle stations could be paid a fraction of the standard award rate, with payments set at 70, 50 or 30 per cent depending on the duties they were considered capable of performing.
He said the cases demonstrated that arguments over equal pay had long been made against economic conditions such as drought and commodity prices.
“Even 60 years ago, the debate around equal wages of our mob was pitched against weather conditions and commodity prices,” Gilbert said.
“By this logic, who knows how much mob should be receiving as wages?”
The new research suggests that the problem has not disappeared, despite the formal end of discriminatory wage systems.
The pay gap appeared across all eight major occupational groups examined, from managers and professionals through to labourers.
Among professionals, Indigenous workers earned 20 per cent less per hour on average, while the gap among managers was 16 per cent.
Across more than 200 individual occupations, 75 per cent showed a material hourly pay gap, with Indigenous workers earning less than other workers doing the same jobs. About 19 per cent showed pay parity, while around 6 per cent showed higher Indigenous earnings.
The largest disparities were not confined to lower-paid work. Finance and insurance and technology were among the sectors with some of the largest gaps, with disparities in individual occupations ranging from about 17 to 40 per cent.
ICT sales professionals recorded an average hourly gap of about 40 per cent.
The report also found that the disparity could not be explained simply by the kinds of jobs Indigenous workers performed.
Only 27 per cent of the overall hourly pay gap was attributed to Indigenous workers being concentrated in lower-paid occupations, while hours worked accounted for just 2 per cent.
Pay gaps were also present across virtually every age group and increased in highly qualified professional and managerial roles.
The researchers identify a range of possible structural factors, including racial bias in recruitment, wage setting and promotion; limited bargaining power; the undervaluing of cultural work; inflexible workplace practices; and the greater use of employer discretion in higher-paid positions.
Those factors were not directly measured by the analysis, but the report identifies them as potential contributors based on existing research.
The consequences extend beyond current wages.
In 2022-23, Indigenous workers collectively earned $14.4 billion, according to the study — about $3 billion less than they would have earned under pay parity.
Lower earnings also mean lower superannuation and reduced capacity to accumulate wealth over a lifetime.
Gilbert said wages were central to the economic security of Indigenous households.
“Wages have a dramatic impact on our livelihoods today, and the ability to buy a home and build intergenerational wealth all hinges on the paycheck we receive,” he said.
Indigenous women faced the largest gap identified by the study. Their average hourly pay was 21 per cent lower than that of all male workers, compared with an 18 per cent gap for Indigenous men against all male workers.
The report argues that closing the disparity will require changes to the way Indigenous workers' contributions are valued and rewarded, rather than relying on changes in qualifications, occupations or hours worked.
Recommendations for change
The report makes a series of recommendations aimed at creating fair pay, secure employment and broader systemic change.
Among them are:
- Introducing a positive duty to prevent racial discrimination in employment practices and addressing structural barriers in the labour market.
- Embedding Indigenous employment data collection and reporting into existing employer equality reporting requirements.
- Addressing the systemic undervaluation of cultural skills in wage-setting.
- Investing in Indigenous workers' career progression and representation in leadership.
- Ensuring workplace flexibility recognises Indigenous ways of caring, reducing the need for workers to cut their hours, stall their careers or resign from their jobs.
Gilbert said the study was intended to provide an Indigenous perspective on an issue that has shaped Indigenous economic life for generations.
“These are the current truths of the Indigenous pay gaps told through an Indigenous lens and from our standpoint,” he said.
The researchers argue that the scale and persistence of the gap means achieving pay parity will require changes to how work is valued, paid and managed across the Australian economy.
