Indian Reservation Labor Markets: A Navajo Assessment and Challenge

"Finding the solution to Indian economic problems is a desperate task." Unemployment estimates on the Navajo reservation, the largest and most populous Indian reservation, range between 35 percent and 70 percent; the most conservative estimate indicates that more Navajos are unemployed and seeking work than are currently employed in the wage and salary sector of the reservation economy. President Reagan, acting through executive order in 1983, established a Commission on Indian Reservation Economies, "charged to identify obstacles to economic growth in the public and private sector at all level." The Commission's report largely confirmed the conventional wisdom, characterizing reservation labor as unskilled and unreliable, with inferior educational endowments, and therefore an obstacle to development. Contrary to this expectation, a study undertaken in the summer of 1985 revealed a sizable pool of unemployed men and women with extremely credible educational qualifications, many with relevant employment experience. This pool is so large and so well qualified as to argue that the quality of labor is not a significant barrier or obstacle to industrial development on the largest and one of the poorest Indian reservations. Why did this assessment go unobserved by the Presidential Commission? If the quality of labor at this level is not a significant obstacle to development, where do the actual obstacles lie? These are the questions this assessment will address. The approach is essentially a policy analysis, based on institutional economics, that seeks to understand the interpretations of reservation economies held in centers of power in the United States. It is a challenge to these interpretations and offers an alternative strategy