Disability employment gap represents untapped labour supply

Disability inclusion in the Australian workforce is improving but significant gaps remain, according to the latest reports from Jobs and Skills Australia. Despite overall tightness in Australia’s labour market, people with disability remain significantly underrepresented, highlighting a structural inefficiency in labour supply.  As seen in Figure 2 below, analysis of 2022 ABS survey data finds the participation rate for people with disability was at 60.5%, well below the 84.9% rate for those without disability, and that those with disabilities were more than twice as likely to be unemployed (7.5% vs 3.1%).

While the statistics themselves highlight a significant gap in labour market representation, evidence suggests the biggest barriers that prevent people with disability from finding work are external, with primary challenges include transport issues, limited job suitability or work experience. This is supported by evidence which suggests that over 4 of 5 people with disability do not require any specific arrangements from an employer to work, indicating that the most pertinent challenges for finding employment are not directly linked to the disability itself, but rather due to lacking the required skills, education or work experience.  These concerns are mirrored from the business’ perspective, whereby despite expressing a willingness to employ people with disability, the most common challenge reported by employers is a lack of suitably qualified candidates.

Bridging this gap presents a clear economic opportunity. In a labour market constrained by persistent skill shortages, improving pathways into work for people with disability could expand effective labour supply, ease hiring pressures and support productivity growth. Targeted investment in training, job matching and workplace accessibility will be critical to better align workforce needs with this underutilised talent pool, ensuring stronger and more inclusive labour market outcomes over the long term.

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