Australia’s labour market is constantly in the spotlight, but one metric often flies under the radar: the employment-to-population ratio. As we head through 2025, this figure is proving to be more than just a statistical curiosity—it’s a window into the strength and inclusivity of our economy. So, what exactly is the employment-to-population ratio, why is it so important right now, and what should Australians watch for next?
What Is the Employment-to-Population Ratio?
The employment-to-population ratio measures the proportion of Australia’s working-age population (typically those aged 15 and over) who are employed. It’s a straightforward calculation—divide the number of people with jobs by the total working-age population, and you have a percentage that tells a big-picture story.
- Higher ratio: More people are working, signalling a strong or inclusive labour market.
- Lower ratio: Fewer people are working, which can point to job scarcity, disengagement, or demographic shifts.
Unlike the unemployment rate, which only counts those actively looking for work, the employment-to-population ratio includes everyone—working, not working, and not looking. That makes it a broader indicator of economic wellbeing.
2025: Recent Trends and Policy Impacts
According to the latest ABS data (Q2 2025), Australia’s employment-to-population ratio sits at 64.8%, just below the record highs seen in late 2023. Several factors are shaping this trend:
- Population Growth: Migration has rebounded post-pandemic, swelling the working-age population and influencing both the numerator (employed) and denominator (total population).
- Labour Force Participation: The participation rate remains high, buoyed by older Australians staying in the workforce longer and more women employed full-time.
- Policy Shifts: Federal programs encouraging workforce re-entry for parents and mature workers, along with targeted skills initiatives, have supported employment growth. The 2025 Budget allocated $2.1 billion to upskilling and regional job creation, aiming to keep the ratio elevated as economic growth moderates.
- Economic Headwinds: Cost-of-living pressures and slowing business investment have tempered job creation in some sectors, leading to a slight easing from 2024’s highs.
It’s important to note that the employment-to-population ratio can also reflect demographic realities. For example, as the Baby Boomer generation retires, the ratio could trend down even if the unemployment rate stays low. That’s why policymakers watch this metric closely alongside traditional indicators.
Why Should Everyday Australians Care?
This ratio isn’t just for economists and politicians—it has real-world impacts:
- Job Security & Wages: A higher ratio means more people have jobs, which usually leads to stronger wage growth and more bargaining power for workers. In 2025, wage growth has ticked up to 4.1% year-on-year, partly thanks to a resilient employment market.
- Superannuation & Retirement: More people working longer supports the superannuation system and eases pressure on government pensions. This is vital as Australia’s population ages.
- Household Spending: When more people are earning, consumer confidence and spending rise—good news for small businesses and the broader economy.
- Government Services: Higher employment means more tax revenue and less demand for welfare, freeing up resources for health, infrastructure, and education.
For jobseekers and workers, understanding where the employment-to-population ratio is heading can help you anticipate market shifts—whether it’s time to negotiate for a raise, upskill, or consider new opportunities.
Looking Ahead: What’s Next for Australia’s Labour Market?
With economic growth expected to moderate in the second half of 2025 and immigration levels stabilising, most analysts predict the employment-to-population ratio will hover around current levels. However, a few factors could push it higher or lower:
- Technological Change: Automation and digital transformation are creating new job categories, but also rendering some roles obsolete. Government retraining programs will be critical to keeping Australians in work.
- Regional Disparities: While capital cities continue to drive jobs growth, regional employment programs may help close the gap and lift the national ratio.
- Global Events: Trade shocks or international slowdowns could impact sectors like resources and education, affecting the employment landscape.
For now, a stable or rising employment-to-population ratio signals that Australia’s economy remains robust and adaptable—good news in a world that’s anything but predictable.
