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Visible Minorities and Aboriginal Peoples in Vancouver's Labour Market

Krishna Pendakur, Simon Fraser University

Background

This paper presents evidence on the evolution of discrimination against visible minorities and Aboriginal peoples in the Vancouver labour market. Canada's visible minority and Aboriginal populations have increased rapidly since the 1960s. For visible minorities, the impetus occurred in 1961 when a change in immigration regulations allowed substantial intake from Asia and Africa. For Aboriginals, the impetus has been a combination of a relatively recent baby-boom and a 1985 change in regulations regarding registered Indian status. Bill C-31, which allowed Aboriginal women who had married outside the Aboriginal community to reclaim their registered status, resulted in a total increase of about 176,000 registered Aboriginals. In 1961, only 2 percent of the population (about 300,000 of a population of 18 million people) could be classified as visible minority and less than 1 percent as Aboriginal. Forty years later, through a combination of immigration, births and intermarriage, the 2001 Census recorded four million visible minorities and almost one million Aboriginals.

The last 40 years has also seen a massive move toward urbanization and rapid technological change. Furthermore, the last 15 years has seen stagnant incomes and growing socio-economic polarization. As a result, Canada's population has become quite diverse, which may require policy change to remove racist and discriminatory practices that prevent individuals from full participation and enjoyment of life.

Vancouver has become massively more diverse over recent decades. In 1981, less than 7% of the population was visible minority and about 1% was Aboriginal. By 2001, these proportions had grown to 37% and 2%, respectively.

Current Profile

Are visible minorities and Aboriginal peoples disenfranchised minorities in Vancouver's labour market or have the changes in Vancouver's ethnic composition delivered an ethnically unstratified labour market?

Figure 1 displays the findings for Aboriginal-white earnings differentials. There are at least three features of Figure 1 that merit attention. First, at a Canada-wide level, Aboriginal men attain about half the earnings of similarly educated and aged white men. This is largely due to the lower labour force attachment of Aboriginal people in comparison with whites. However, even if we control for weeks, hours and full time status, the observed differential reduces in size, but is still very substantial. Previous evidence suggests that about half the differential is explained by such job characteristics.

Aboriginal-White earnings Differentials, Males, Canada and 3 CMAs, 1970 to 2000

Second, although there was some improvement at the Canada-wide level throughout the 1970s, this indicator of relative labour market performance shows increasing differentials for Aboriginal men since then. The differential increased from 40% to almost 60% between 1980 and 1995 and improved somewhat to 53% in 2000.

Third, Aboriginal men in Vancouver fare better than Aboriginal men at the Canada-wide level, but worse than Aboriginal men in Toronto or Montreal. This is due to at least two factors: Vancouver has large reserves within its Census Metropolitan Area (CMA) boundaries, which hold many comparatively lower-skilled residents; and earnings differentials are vastly worse for Aboriginal peoples outside Canada's cities, so that the three large CMAs show better relative performance than Canada as a whole. The over-time trajectory of Aboriginal peoples' earnings in Vancouver is similar to that of Canada as a whole: there was great improvement throughout the 1970s and steady erosion between 1980 and 1996. However, whereas there was a sharp and statistically significant improvement in the late 1990s for Aboriginal peoples in Canada as a whole, there was no such sharp or statistically significant improvement in Vancouver in the late 1990s.

Figure 2 shows the same information for visible minorities. The most important finding of Aboriginal and visible minority earnings differentials is that Aboriginal peoples face much steeper earnings differentials than do visible minorities. This finding is well known, but often neglected in policy discussions. By any measure, Aboriginals are the worst-off ethnic group in Canada.

Visible Minority-White earnings Differentials, Males, Canada and 3 CMAs, 1970 to 2000

The second feature in Figure 2 is the over-time pattern. At the Canada-wide level, we observe a qualitatively similar pattern to that seen for Aboriginal peoples: there was significant improvement in relative earnings over the 1970s and deterioration thereafter. In 1970, visible minority men earned 5% less than similarly aged and educated white men and, in 1980, this differential was only 3%. However in 1985 and 1990, the differential rose to 6-7% and, in 1995 and 2000, it rose again to 13-15%.

The third feature is the difference between Vancouver and Canada's other large metropolitan areas. In all three large CMAs during the 1970s, earnings differentials faced by visible minority men were larger than in Canada as a whole. Visible minorities who lived in smaller urban areas and in rural areas performed relatively better than those in the biggest cities. In 1970, the earnings differential was about 10% in all three CMAs in comparison to 5% for Canada as a whole. Over the 1970s, not much changed in the three CMAs and, over the 1980s and 1990s, the pattern for Montreal and Toronto was qualitatively similar to that in Canada as a whole: sharp deterioration in visible minority earnings between 1985 and 2000. However, in Vancouver, visible minority earnings converged towards white earnings and surpassed the Canada-wide levels between 1980 and 1990. Indeed, in 1990, visible minority men earned the same as white men who had the same personal characteristics. However, the deterioration during the 1990s in the relative earnings observed in Montreal, Toronto and Canada as a whole is also seen in Vancouver. The differential grew from 0% in 1990 to 6% in 1995 and 2000.

Concerning Aboriginal peoples, there are two major findings. First, Aboriginal men in Vancouver (as for Canada as a whole) earn much less than white men throughout the period. In 2000, Aboriginal men earned approximately half of what similarly aged and educated white men earned. Second, although there was a great convergence between Aboriginal and white earnings during the 1970s, this was entirely undone during the next two decades. Between 1980 and 2000, the earnings differential between Aboriginal and white men in Vancouver increased almost threefold.

Concerning visible minorities, there are also two major findings. First, visible minority men in Vancouver earned less than white men throughout the period, but the disparity is much less severe than for Aboriginals. In 2000, visible minority men earned 6% less than similarly aged and educated white men. Second, whereas visible minority men earned about 10% less than white men in all three of Canada's largest cities in 1970, Vancouver emerged in the 1980s and 1990s as a comparatively better earnings environment for visible minorities. In 2000, visible minority men earned about 3% less than white men in Vancouver, 12% less in Toronto, and over 20% less in Montreal. Thus, differentials in Canada's other large cities are two or three times as large as in Vancouver.

Conclusion

In terms of discrimination, there are two key lessons. First, to the extent that these earnings differentials may be taken as a measure of economic discrimination in the labour market, Aboriginals are by far the most marginalized ethnic group. Any policy aimed at equity across ethnic groups must aim first at the problems faced by Aboriginal peoples in both education acquisition and in translating education into earnings. Second, the passage of time does not seem to be improving the situation. Labour market outcomes across these broad ethnic categories seemed to be converging in the 1970s, but have markedly diverged since then. This divergence has continued even during the 1990s, a period of massively increased diversity in Canada's cities, most especially in Vancouver. In an environment where diversity does not automatically generate equity, integration policies are needed .