The Office of Economic Analysis post this week highlights the strong, cyclical labor market. The key point is that there is not a labor shortage due to fewer Oregonians (or Americans) looking for work, but rather due to businesses looking to hire even more, after a full recovery from COVID. Earlier this year we touched on the potential labor force and noted that yes, employment rates among teenagers and early 20-somethings is lower than it was back in 1999 or 2000, but mathematically the increased share of older adults working offset that in the big picture. Today I want to focus just the so-called prime working-age population, or those between the ages of 25 and 54 years old. Painting with a broad brush, this is a key demographic because it is when most people are finished with their formal schooling years, and before their retirement years. The vast majority of folks in this age range work, but the exact percentage depends on the strength in the economy.
This first chart shows the prime-age employment rate, or the employment-population ratio (EPOP for short) in Oregon for the past 40+ years. Notice how as of September, the only times in Oregon’s recorded history that the employment rate was higher than today was back in the 1990s. The same is true nationally. We are about 1 percentage point away from a record high, and provided the expansion continues, and given the mediocre demographics of a structurally tight labor market, I’d think we will reach that new high in the year or two ahead.
Note: Our friends at the Employment Department crunch the actual underlying data and share with us this measure from 2002 through current. Historical figures are based on our office’s work using the publicly available microdata.
Crucially, the recently released 2022 ACS data confirms the fact that the economic recovery from the pandemic has been inclusive. Based on this data, which begins in 2000 as the ACS replaced the old long-form decennial Census, Oregon’s prime-age EPOP is at a new high in recent decades, for both white, non-Hispanic Oregonians, and BIPOC Oregonians. This data is unable to compare to those previous all-time highs reached in the 1990s, but recent trends are certainly encouraging and point toward a strong labor market.
I still have more detailed work to do in going through the 2022 ACS data, but based on the data so far, there are still varied experiences among different racial and ethnic groups in Oregon. Employment rates for white, non-Hispanic and Asian Oregonians are higher than the overall prime-age EPOP. Hispanic Oregonians prime-age EPOP is right around the overall Oregon figure, while employment rates for both Black Oregonians and American Indian or Alaska Native Oregonians are below the statewide average.
Comparing across the cycle so far, both Black, and Hispanic or Latino Oregonians employment rates in 2022 are above their 2019 employment rates. However, the prime-age Black EPOP previous peaked in 2018, and Hispanic or Latino prime-age EPOP peaked in 2017. In 2022 their respectively employment rates were nearly all the way back, but just a hair under those previous values. On the other hand, employment rates for Asian Oregonians and American Indian or Alaska Native Oregonians continued to rise throughout the pandemic, and set new all-time highs, at least for data back to 2000.
This latest employment data by race and ethnicity in Oregon is similar to our previous look at the racial poverty gap, differences clearly remain, but they are a bit smaller today than prior to the pandemic.
This post originated from the Office of Economic Analysis, read more at their website.