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On Friday, the Bureau of Labor Statistics will release the jobs report for May. It includes a measure we talk about a lot: the labor force participation rate. That’s exactly what it sounds like — the percentage of the population that’s working or looking for work. In April, the rate was 62.6%, which is still well below pre-pandemic levels.
Generally, the more people in the labor force, the healthier the economy. But one challenge the U.S. faces is that the population is aging. Many who quit work may not come back. So some economists like to look at an alternative measure: the prime age employment-to-population ratio.
Olga Milman recently got full-time work at a community college in Manhattan, New York City. Her duties include helping students meet their basic needs, like finding housing and food. She also does strategic planning.
“We’re doing fundraising, I’m planning a gala with a silent auction. So, I love my job,” Milman said.
Milman, 52, is included in the prime age employment-to-population ratio — the percentage of people in the U.S. between the ages of 25 and 54 who have jobs.
Currently, it’s at 80.8%, which means that 4 of every 5 people in that age group are working.
“It’s among the highest it’s been since the early 2000s,” said Ryan Sweet, chief U.S. economist at Oxford Economics.
This ratio is a good barometer of the overall health of the labor market because it excludes younger people who are more likely to be in and out of school as well as older people who may be retired.
But prime age people “need to be working and should be working,” Sweet said. With employment as high as it is, he added, some industries like hospitality and retail will continue to have a hard time finding workers unless they start paying way more.
“That’s why you’re seeing a lot of automation,” Sweet said. “So for example, we took our kids to a restaurant recently, and they brought out an iPad, and you order on the iPad. One person brought out the food. So there’s ways to automate and reduce the demand for some of these workers.”
Back in Manhattan, Olga Milman said she’ll keep working well past prime age. That’s partly because she doesn’t have enough money to retire early, but also because, she said, her job gives her a purpose.
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