American Indians and Alaska Natives in the U.S. labor force

According to data from the Current Population Survey (CPS), the country’s 2.9 million American Indians and Alaska Natives (AIANs) accounted for 1.1 percent of the U.S. civilian noninstitutional population age 16 and older in 2018.¹ The unemployment rate of AIANs was 6.6 percent, considerably higher than the rate of 3.9 percent for the country as a whole. At the same time, AIANs were less likely to be working or looking for work—59.6 percent of them participated in the labor force, compared with 62.9 percent for the total population. Furthermore, compared with the total population, AIANs have had higher unemployment rates and lower labor force participation rates throughout the history of the series (comparable data for AIANs are available back to 2003).² (See figures 1 and 2.) A closer look at how these measures vary by demographic and other characteristics—such as age, educational attainment, and area of residence—can shed light on how AIANs are faring in the labor market.

Because the sample size for AIANs is relatively small, the U.S. Bureau of Labor Statistics (BLS) does not routinely tabulate detailed data on their demographic and labor market characteristics. The AIAN population is extremely diverse; its members have origins in hundreds of distinct and culturally diverse peoples from throughout North and South America. Well over 500 tribes are federally recognized within the contiguous 48 states and Alaska,³ and many more are either not recognized or are recognized by states only.

In the remainder of this article, we pool multiple years of data from the monthly CPS to examine the labor market characteristics of AIANs. By increasing sample size, this pooling allows for a more indepth examination of AIAN data. Unless otherwise noted, the CPS estimates presented in this article are 36-month averages for the period January 2016–December 2018 and describe the civilian noninstitutional population age 16 and older. In the CPS, individuals are asked what race they consider themselves to be; AIAN status is based on responses to this question rather than on tribal membership.⁴

We first describe the demographic characteristics of AIANs. Next, we examine their labor force participation by a variety of characteristics. We then turn to employment—focusing on occupation, public-sector employment, and hours of work—and to unemployment. Finally, we discuss people who, while not in the labor force, want a job and thus may have some labor market attachment even though they are not looking for work. Consistent with other CPS published data on race, the estimates in this article are for people who consider their race to be AIAN only. (Selected statistics for the broader group—AIAN alone or in combination with another race—are not part of our analysis but are shown in the appendix.)

Characteristics of the AIAN population

Because labor market behavior can be influenced by demographic and other factors, it is useful to examine the characteristics of the AIAN population. This section explores a variety of demographic and other characteristics of AIANs.

Age

In 2016–18, AIANs had a younger age profile than the population overall, as they were more likely to fall into the youth category (ages 16 to 24) or the prime-working-age group (ages 25 to 54). Twenty percent of AIANs were ages 16 to 24, which is 5 percentage points higher than the estimate for the population overall. AIANs were also more likely to be ages 25 to 54, with 55 percent of them falling into this age category, compared with 49 percent of the population overall. By contrast, 25 percent of AIANs were age 55 and older, 11 percentage points below the average for the country. (See table 1.) According to data from the U.S. Department of Health and Human Services, the life expectancy of AIANs is 5.5 years lower than that of the population overall.⁵

Disability

The likelihood of having a disability increases with age.⁶ Therefore, it is striking that, despite their younger age profile, AIANs in 2016–18 were more likely to have a disability (16 percent) than the overall population (12 percent). When examined further by age, the differences are even more noticeable. Among AIANs age 55 and older, 34 percent had a disability, compared with 23 percent for the overall population in that age range. The incidence of disability among younger age groups was also higher for AIANs. (See figure 3.)

School enrollment and educational attainment

Traditionally, people ages 16 to 24 are the most likely to be enrolled in school. Among AIANs in this age group, 42 percent were enrolled in high school or college in 2016–18, much lower than the national average of 53 percent for 16- to 24-year-olds. Mirroring the pattern for the country as a whole, young AIAN women were slightly more likely than young AIAN men to be enrolled in school. (See figure 4.)

Most people have completed their education by age 25. In 2016–18, AIANs had lower levels of educational attainment than the population as a whole. Two in 10 AIANs age 25 and older had less than a high school diploma, compared with about 1 in 10 for the population overall. Seventeen percent of AIANs had a bachelor’s degree or higher, just under half of the national average. (See table 1.)

As was the case for the overall population, AIAN women tended to have greater educational attainment than AIAN men. About half (51 percent) of AIAN women had at least some college or a postsecondary degree, compared with 42 percent of AIAN men. However, AIAN men and women both had lower levels of educational attainment than the national average.

Hispanic or Latino ethnicity

In 2016–18, AIANs were more likely to be Hispanic (33 percent) than the population overall (16 percent). As defined in the Office of Management and Budget standards for the classification of federal data on race and ethnicity, Hispanic or Latino ethnicity is distinct from race.⁷ Therefore, people of Hispanic ethnicity may be of any race.

Nativity

In 2016–18, 15 percent of AIANs were foreign born.⁸ This share was about the same as that for the total population (16 percent). The AIAN race category refers to individuals with origins in any of the original peoples of North and South America (including Central America).⁹ Thus, it is perhaps not surprising that, in 2016–18, the majority of foreign-born AIANs were born in Mexico, with smaller shares born in other Central American countries, Canada, and South America. Foreign-born AIANs were much more likely to be Hispanic (about 9 in 10) than were native-born AIANs (about 1 in 4).

Area of residence

Most AIANs do not reside in AIAN areas—that is, federal or state American Indian reservations or off-reservation trust lands, tribal statistical areas, or Alaska Native village statistical areas.¹⁰ In 2016–18, just over one-quarter (28 percent) of AIANs resided in such areas.¹¹

AIANs residing in an AIAN area tended to be older than AIANs living elsewhere. Thirty percent of AIANs residing in AIAN areas were age 55 and older, compared with 23 percent of AIANs who lived elsewhere. (See figure 5.)

Labor force participation

In 2016–18, AIANs were less likely to participate in the labor force (that is, to work or look for work) than the overall population—60.3 percent, compared with 62.8 percent. (See table 2.) However, participation rates varied considerably by demographic characteristics.

Age

Among 16- to 24-year-olds, labor force participation is closely tied to school enrollment, as youth enrolled in school are much less likely to participate in the labor force than youth who are not enrolled. Nevertheless, among both those enrolled and those not enrolled in school, AIAN youth were less likely to participate in the labor force than were youth overall. Enrolled AIAN youth had a participation rate of 29.5 percent in 2016–18, 6.3 percentage points lower than the rate for enrolled youth overall. The rate for nonenrolled AIAN youth, at 69.9 percent, was 7.1 percentage points lower than that for nonenrolled youth overall. However, the rate for all AIAN youth, including the enrolled and the nonenrolled, was 52.7 percent, just 2.6 percentage points lower than that for all 16- to 24-year-olds. (See figure 6.)

Why is the disparity in labor force participation smaller for all youth than for either the enrolled or the nonenrolled? The reason has to do with the share of youth enrolled in school. As mentioned in the preceding section, the percentage of AIAN youth not enrolled in school was higher than that for youth overall. Because nonenrolled youth are more likely to participate in the labor force, the rate for all AIAN 16- to 24-year-olds was higher than it would have been had the AIAN enrollment rate been the same as the national average.

For both AIANs and the population as a whole, labor force participation rates were highest among 25- to 54-year-olds. AIANs in this prime-working-age group had a participation rate of 74.3 percent, more than 20 percentage points higher than the rate for AIAN youth. However, this rate was lower than the rate of 81.7 percent for the total population ages 25 to 54. (See table 2.)

Individuals in the 55-and-older age group are less likely to be labor force participants than people in the prime-working-age group. In 2016–18, 35.5 percent of AIANs age 55 and older participated in the labor force. As with other age groups, this rate was lower than the national average for people age 55 and older (40.0 percent).

Age is often a factor in explaining differences in labor force participation between groups. For example, two groups may differ in participation rates simply because they have a different age composition, and the rates of populations with a large share of 25- to 54-year-olds tend to be higher than those of populations less concentrated in that age range. However, age does not help explain the low labor force participation of AIANs. AIANs have a younger age profile than the population overall, yet their participation rate is lower than the national average. In fact, the disparity in participation rates is less stark than it would be if AIANs had the same age profile as the country as a whole. In 2016–18, the labor force participation rate of AIANs was 2.5 percentage points lower than that of the population overall. However, the rate for 25- to 54-year-olds was 7.4 percentage points lower for AIANs than for the overall population, and the rate for people age 55 and older was 4.5 percentage points lower.

Gender

Labor force participation rates differ sharply by gender. As was the case for the population overall, AIAN men were more likely to participate in the labor force than AIAN women—65.6 percent versus 55.3 percent. For both men and women, participation rates for AIANs were below the national average.

Disability

In general, people with disabilities are much less likely to participate in the labor force than people without disabilities,¹² and AIANs with disabilities were no exception. In 2016–18, 22.6 percent of AIANs with a disability were either working or looking for work, about a third of the rate for AIANs with no disability (67.4 percent). Although the participation rates for AIANs with and without disabilities were not statistically different from the national averages for those with and without disabilities, it is worth bearing in mind that AIANs were more likely to have a disability than the population overall. The higher prevalence of disabilities among AIANs may be a contributing factor in explaining their lower likelihood of participating in the labor force.

Educational attainment

Longstanding historical data show that labor force participation tends to be higher for people with greater educational attainment, and this pattern holds for AIANs. Among AIANs age 25 and older in 2016–18, those with a bachelor’s degree or higher were much more likely to be in the labor force (74.6 percent) than were those with less than a high school diploma (49.5 percent).

Participation rates for AIANs with lower levels of educational attainment were higher than the rates for the population overall. For example, the rate for AIANs with less than a high school diploma was 49.5 percent, higher than the rate of 45.9 percent for the total population with less than a high school diploma. By contrast, among those with a bachelor’s degree or higher, the AIAN labor force participation rate was fairly similar to that of the overall population.

Nativity

In 2016–18, foreign-born AIANs were more likely to be in the labor force (69.5 percent) than native-born AIANs (58.7 percent). Although this pattern was consistent with that for the population as a whole, foreign-born AIANs were more likely to participate in the labor force than the foreign born overall, while native-born AIANs were less likely to participate than the native born overall. Thus, the gap between foreign- and native-born participation rates was wider for AIANs (10.8 percentage points) than for the population as a whole (3.3 percentage points). As discussed above, foreign-born AIANs are overwhelmingly Hispanic. The relatively high labor force participation rate for foreign-born AIANs reflects the characteristics of foreign-born Hispanics, who have higher rates than the foreign born overall.¹³

Foreign-born AIAN men had a labor force participation rate of 81.8 percent, almost 20 percentage points higher than that of their native-born counterparts (62.4 percent). For the population overall, foreign-born men were also more likely to be labor force participants than were native-born men (77.9 percent versus 67.4 percent), but the gap between the two groups was about half of that for AIANs.

Foreign- and native-born AIAN women were equally likely to participate in the labor force: the rate was 55.3 percent for both groups. By contrast, foreign-born women in the overall population were less likely to be working or looking for work than were native-born women (54.1 percent versus 57.5 percent).

Area of residence

In 2016–18, 52.0 percent of AIANs who resided in AIAN areas were working or looking for work. (See table 3.) By contrast, the labor force participation rate for AIANs who did not live in AIAN areas was 63.6 percent, not statistically different than the rate for the total population (62.8 percent).

Regardless of where they lived, AIANs had younger age profiles than the overall population. However, those living in AIAN areas tended to be older than those living elsewhere. (See figure 5.) This age disparity likely explains, in part, the lower participation rate for those living in AIAN areas. However, for both men and women and for all age ranges, AIANs living in AIAN areas were less likely to participate in the labor force than were AIANs living elsewhere.

Employment

The following section investigates some of the employment characteristics of AIANs and how they differ from those of the overall population. It also examines selected characteristics of AIAN workers by area of residence.

Occupation

In 2016–18, AIANs were much less likely than the overall population to work in management, professional, and related occupations (25 percent versus 40 percent). (See table 4.) This difference may partially reflect the lower educational attainment and younger age profile of the AIAN population. The likelihood of being employed in management, professional, and related occupations increases with educational attainment, and relatively few 16- to 24-year-old workers are employed in this occupational group.

AIANs were more likely than the overall population to work in service occupations (25 percent versus 18 percent), an occupational group in which younger workers and workers with lower educational attainment are disproportionately employed. AIANs were also somewhat more likely to work in natural resources, construction, and maintenance occupations (13 percent versus 9 percent) and in production, transportation, and material moving occupations (15 percent versus 12 percent).

Public-sector employment

In 2016–18, the proportion of workers employed in the public sector—that is, in federal, state, local, or tribal government—was higher among AIANs than for the population overall (18 percent versus 14 percent). (See figure 7.) One-third of employed AIANs who resided in AIAN areas worked in the public sector. By contrast, the proportion of employed AIANs not living in AIAN areas was the same as the national average.

Tribal governments—that is, American Indian or Alaska Native governments—differ in some respects from federal, state, and local governments. While tribal governments operate many establishments that are inherently governmental—such as police departments, courts, and schools—they also often operate for-profit businesses that provide funds for their American Indian tribe or Alaska Native entity. Revenues from these businesses are used to fund tribal government operations, provide for the general welfare of tribal members, and promote tribal economic development.¹⁴ Thus, individuals working for a tribal government may be employed in what might be considered traditional government jobs as well as jobs more often associated with the private sector.

The range of activities done by tribal governments can be examined with data from the BLS Quarterly Census of Employment and Wages (QCEW) program. This program obtains quarterly counts of the number of establishments covered by Unemployment Insurance (UI) or Unemployment Compensation for Federal Employees (UCFE), as well as monthly counts of employment in covered establishments. These administrative data are collected for tax purposes and cover more than 95 percent of U.S. jobs.¹⁵ The QCEW identifies tribal establishments—that is, establishments owned and operated by American Indian tribes or Alaska Native villages.¹⁶

Note that employment in tribal establishments is not a count of employed AIANs, as establishments owned and operated by American Indian tribes or Alaska Native villages may employ people who are not AIANs. The research data in table 5, generated specifically for this article, should not be considered a complete count of establishments owned and operated by American Indian tribes or Alaska Native villages.¹⁷ Nevertheless, these data can illustrate the range of industries in which these establishments operate.

The number of tribal establishments by industry are shown in table 5. In the fourth quarter of 2017, 45 percent of the 2,300 tribal establishments were in public administration, with the vast majority in tribal government. (Tribal government includes AIAN councils, courts, and law enforcement bodies.) Smaller shares were in other sectors, including 19 percent in leisure and hospitality, 12 percent in education and health services, and 10 percent in trade, transportation, and utilities. The other 14 percent of tribal establishments were distributed across the remaining industry sectors.

When we look at employment in tribal establishments, the industry distribution is somewhat different. (Again, people employed by tribal establishments are not necessarily AIANs.) Although just 19 percent of tribal establishments were in leisure and hospitality, 55 percent of all employment in tribal establishments was in this sector. Within leisure and hospitality, the majority of jobs were in casinos and casino hotels, which accounted for half of all employment in tribal establishments. Another 34 percent of employment in tribal establishments was in public administration.

Part-time workers

Most employed people usually work full time, defined in the CPS as 35 hours or more per week. However, a substantial share of the employed usually work a part-time schedule. In 2016–18, AIANs were just as likely as the population overall to work part time—18 percent. (See table 4.) Mirroring the pattern for the population as a whole, employed AIAN women were about twice as likely to be working part time as were AIAN men (24 percent versus 13 percent).

One group of part-time workers—people who worked less than 35 hours per week for economic reasons, also referred to as involuntary part-time workers—garners considerable attention among labor market analysts. Involuntary part-time workers are defined as those working less than 35 hours per week because their hours have been reduced or because they are unable to find full-time jobs. The percentage of all workers who work part time involuntarily often serves as a measure of labor market difficulty.  Among employed AIANs, 5.2 percent were involuntary part-time workers in 2016–18, higher than the 3.6 percent of workers overall. Employed AIANs who lived in AIAN areas were slightly less likely than AIANs living elsewhere to be employed part time for economic reasons. (See figure 8.)

Usual weekly earnings

Among full-time wage and salary workers in 2016–18, AIANs tended to have lower earnings than the population as a whole. (See table 4.) Twenty-six percent of AIANs earned less than $500 per week, compared with 17 percent for the total population. At the higher end of the earnings spectrum, 19 percent of AIANs earned $1,200 or more per week, considerably lower than the 32 percent for the population overall. (Differences in earnings reflect many factors, such as variations in educational attainment, occupation, industry, and geographic region.)

Unemployment

In 2016–18, the unemployment rate for AIANs was 7.8 percent, 3.4 percentage points higher than the rate of 4.4 percent for the population overall. (See table 6.) Like other measures, the unemployment rate differed across a variety of characteristics.

Demographic characteristics

For virtually all major demographic characteristics, 2016–18 unemployment rates of AIANs and the overall population followed the same general pattern. For both groups, people with a disability had higher rates than those without a disability, and jobless rates were higher among youth than among older workers. In addition, people with a bachelor’s degree or higher had lower rates than those with less education, and jobless rates for men and women were not statistically different. Jobless rates were higher for AIANs than for the overall population for nearly all major demographic characteristics. As with the labor force participation rate, some characteristics of AIANs may help explain their higher unemployment rates. In particular, jobless rates tend to be higher for younger people, people with disabilities, and people with lower educational attainment.

Area of residence

AIANs residing in AIAN areas had a jobless rate of 11.4 percent in 2016–18. This rate was considerably higher than that of AIANs who did not live in AIAN areas (6.6 percent). Among AIANs, rates were higher for those living in AIAN areas than for those who lived elsewhere for three groups: men, people ages 16 to 24, and people ages 25 to 54. Rates for AIAN women and AIANs age 55 and older were not statistically different by area of residence. (See table 3.)

Reasons for and duration of unemployment

During the 2016–18 period, the distribution of the jobless by reason for unemployment was roughly similar for AIANs and the population overall. (See table 7.) Among AIANs, the share of the unemployed who were job losers—that is, those who had lost jobs or who had completed temporary jobs—was 45 percent. Another 33 percent of unemployed AIANs were reentrants, defined as unemployed people who had previously worked but were not in the labor force prior to beginning their job search. Smaller proportions of the AIAN unemployed were job leavers (people who voluntarily left their jobs) and new entrants (unemployed people who never previously worked)—13 percent and 9 percent, respectively.

Duration of joblessness is another measure that can illuminate how different groups fare relative to one another in the labor market. Among the unemployed, almost 1 in 4 AIANs had been jobless for 27 weeks or longer in 2016–18. This proportion was about the same as that for the population overall.

People not in the labor force who want a job

Some researchers have questioned the appropriateness of the CPS definition of unemployment for the AIAN population—in particular, the requirement that a person needs to be actively looking for work in order to be classified as unemployed.¹⁸ Active job search methods are those that could result in a job offer without further action on the part of the job seeker, such as filling out a job application, interviewing for a job, or contacting an employer directly about a job.¹⁹ Even if they would like to work, people who are not employed and not actively looking for work are not counted as unemployed in the CPS; instead, they are classified as not in the labor force.

However, some researchers have suggested that in small, economically depressed communities—such as certain remote American Indian reservations and isolated Alaskan Native villages—people may not actively look for work when they know there are no jobs available, instead relying on informal networks to find information on possible employment opportunities. Thus, many AIANs who live in those areas, although they would like jobs, may not look for work because they know there is no point in doing so. When job opportunities become available in such areas, people can find out quickly through word of mouth. In fact, some analyses of the labor market situation of AIANs do not use the CPS definition of unemployment and instead measure the number of people who are not working but want a job.²⁰

While the CPS does measure the number of people who are not in the labor force but want a job, this measure is not used in official unemployment estimates for two reasons. First, the question about how to measure unemployment has been debated for many years, but a number of internal and external reviews of CPS methodology have concluded that whether people want a job is inherently subjective. A measure based on whether people want a job would not account for many factors people consider before taking a job, such as the nature of the work, hours, and location. In addition, whether a person wants a job may vary with changing labor market conditions or personal circumstances.²¹ Second, the primary use of the unemployment rate is to measure the health of the economy, so one of its key features is its sensitivity to the business cycle. That is, the unemployment rate increases during economic downturns and decreases during expansions. The number of people not in the labor force who want a job is much less cyclically sensitive. Classifying these individuals as unemployed could dampen the sensitivity of the unemployment rate.

Nonetheless, we can examine CPS estimates of people not in the labor force who want a job to determine how the inclusion of this category would compare with the official measures. As was the case for the population as a whole, only a small minority of AIANs who were not in the labor force wanted a job in 2016–18. (Many people who are not in the labor force are retired, stay-at-home parents, or students and do not want a job.) However, a greater proportion of them wanted a job than the general population: in 2016–18, 9.2 percent of AIANs who were not in the labor force wanted a job, higher than the 5.8 percent for the population overall. (See table 8.)

The percentage was higher for AIANs residing in AIAN areas than for those who did not live in such areas—10.6 percent versus 8.5 percent. However, in both AIAN areas and non-AIAN areas, only a small percentage of AIANs not in the labor force wanted a job.  

What if those who wanted a job were considered among the unemployed? BLS has a long history of producing alternative measures of labor underutilization to provide insight into a broad range of labor market problems encountered by workers. Such measures define unemployment both more broadly and more narrowly than the official unemployment rate. One regularly calculated rate even includes people who are employed part time for economic reasons, a group widely considered underemployed.²² While no measure currently produced includes people who want a job along with the unemployed, such a measure could be produced by following the same basic idea as that for existing measures. Such a measure would be calculated thus:

A measure that includes people not in the labor force who want a job is, not surprisingly, higher than the unemployment rate. It is especially high for those residing in AIAN areas. However, the alternative measure is also higher than the unemployment rate for the population overall. In percentage terms, the increases for AIANs and for the total population are of similar size. We note that, although a measure such as this can certainly be constructed, it is a little less sensitive to economic cycles than the unemployment rate.²³

Summary

This article has examined the labor force characteristics of AIANs by a variety of demographic and other characteristics, primarily using CPS data from 2016 through 2018. During this period, AIANs had a younger age profile than the population as a whole, and younger people, particularly those in the prime working ages of 25 to 54, are more likely to be working or looking for work than people in older age groups. However, AIANs also were more likely to have a disability and to have lower educational attainment; both of these characteristics are associated with lower labor force participation. A closer look at AIANs reveals that their labor force participation was lower than that of the population as a whole across most gender and age groups, although AIAN rates were higher than the national average for the foreign born and people with less educational attainment. Among AIANs, people residing in AIAN areas had lower labor force participation rates than those who lived elsewhere.

A greater share of employed AIANs worked in service occupations than the national average, and a smaller share worked in management, professional, and related occupations. AIANs living in AIAN areas were considerably more likely than the population as a whole to work in the public sector—including federal, state, local, and tribal governments.

In general, AIAN unemployment rates were higher than those of the total population for most of the characteristics examined in this article. Among AIANs, rates were particularly high for 16- to 24-year-olds, people with disabilities, and people residing in AIAN areas. The duration of unemployment for AIANs was similar to that of the population overall.

Finally, while this article investigated the official unemployment rate, some researchers question the usefulness of this measure for AIANs. This article presents a possible alternative measure that takes into account people who are not employed but want a job. While this alternative measure produced higher estimates than the official unemployment rate for both AIANs and the total population in the 2016–18 period, the increases for AIANs and for the population as a whole were of roughly similar size in percentage terms.

Appendix

Generally, CPS data on race are tabulated for people who identify themselves as being of one race only. Thus, all estimates previously cited in this article are for people who identified as AIAN alone, not as AIAN in addition to another race. However, many researchers prefer to use AIAN data that include all those who identify as AIAN, including those who consider themselves as being of more than one race. Selected statistics for this broader group—commonly referred to as AIAN alone or in combination²⁴—are presented in this appendix to aid researchers.

ACKNOWLEDGMENTS: The authors would like to thank Dave Talan and Kevin Cooksey for their assistance with data from the QCEW program.