Aboriginal and Torres Strait Islander Peoples are working an equivalent two months a year for free, according to a landmark national study exposing a glaring Indigenous pay gap.
The Australian-first Towards Indigenous Pay Parity report released on Thursday revealed Indigenous employees earn 16 cents less for every dollar compared with the average Australian worker, culminating in an average $15,000 discrepancy each year.
That figure climbs to 21 cents for Aboriginal and Torres Strait Islander women, who earn an average $41 per hour, compared with $52 for men overall.
The UTS Centre for Indigenous People and Work report analysed Australian Tax Office and Australian Bureau of Statistics data from almost 230 occupations, identifying wage gaps in three quarters of sectors.
The disparity is widest for Indigenous professionals and managers, who are paid around 19.5 per cent and 15.8 per cent less than the average Australian in the same field, respectively.
The pay gap cost Indigenous Australians a combined $3 billion in 2022-23 and threatens to reach $170 billion in losses by 2050, warned the centre's director Professor Nareen Young.
“For individual workers, it’s comparable to losing a lifetime of super payments, or working two months of each year for free,” she said.
“Lower average wages mean lower lifetime earnings, weaker super outcomes, and less intergenerational economic security for Aboriginal and Torres Strait Islander people."
Exploring factors including education, age, job type and hours worked, the study found those elements accounting for less than one third of the average hourly pay gap.
"Having examined all of the usual things that explain a pay parity gap we can only put it down to systemic racism," Prof Young told ABC News Breakfast.
"When it's up to the discretion of the employer or manager or a REM (remuneration) process or an HR process the gap is wider, which is of real concern."
Concerningly, the gap has widened in the last decade, rising from an estimated 10 per cent in 2014, according to the Melbourne Institute’s Household, Income and Labour Dynamics in Australia (HILDA) dataset.
Economists are sounding the alarm in response to the Indigenous-led report, warning the disparity undercuts investments in Indigenous welfare and has serious implication for Australia's economy.
“Lower wages across a working life mean lower superannuation balances and heavier reliance on the age pension," Indigenous Business Australia chief economist Siddarth Shirodkar said.
"Governments are investing heavily in Indigenous employment through Closing the Gap, and those employment targets are undercut if the people who do find work are paid less than their colleagues," Dr Shirodkar said.
Sectors facing crucial workforce demand including aged and disability care, nursing support and technology all show sizeable pay gaps, Dr Shirodkar warned.
The centre is pushing for legislation to help prevent racial discrimination in the workplace, similar to those which penalise sex discrimination, in a bid to close the gap.
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