Falling Unemployment in the Native American Community: Here to Stay?

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Summary

The unemployment rate in the Indigenous community fell from 15% in 2010 to 6% in 2019, the lowest rate in at least 20 years. Additionally, the gap between the Native American unemployment rate and the national unemployment rate narrowed significantly during the 2010-2019 economic expansion.

After peaking in 2020, the Native American unemployment rate has rapidly declined and is currently near its 2019 low.

The labor force participation rate in the Indigenous community is somewhat lower today than it was in 2019, but strong employment growth appears to be driving much of the decrease in the unemployment rate of the community.

Data from the Census Bureau’s American Community Survey suggests that employment in the Native American community increased by 15% between 2019 and 2021, while overall employment in the United States fell slightly by 1.5% during of this period. We acknowledge that the small sample size of Native Americans in the survey could bias this conclusion, at least in part.

That said, the rise in employment in the Native community seems credible to us because Native American workers tend to be overrepresented in industries that have performed well during the pandemic, while underrepresented in sectors that have fared poorly.

Some of these gains could be reversed if, as we expect, the U.S. economy slips into recession in 2023. Native American workers tend to be concentrated in cyclically sensitive industries that contract relatively more during economic downturns.

But the longer-term employment prospects for the Aboriginal community are better, in our opinion. The Native American population is younger and growing faster than the overall American population. In the years to come, Native Americans could help alleviate labor shortages, at least at the margin, in states with significant numbers of Native Americans.

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