Overall rate of ‘functional unemployment’ drifts to lowest level since June
WASHINGTON, Dec. 20, 2023 /PRNewswire/ — On average workers appear to be benefitting from a robust job market, with the percentage of workers unable to find a living-wage job at the lowest level in six months, according to the monthly True Rate of Unemployment (TRU) report by the Ludwig Institute for Shared Economic Prosperity (LISEP).
The November TRU — a measure of the “functionally unemployed,” defined as the jobless plus those seeking, but unable to find, full-time employment paying above the poverty line — decreased 0.3 percentage points, from 22.7% to 22.4%. This is the fourth consecutive month the TRU has trended downward, and the lowest level since the June rate of 21.7%.
While most demographic groups saw negligible changes, with the TRU for Black workers remaining unchanged at 25.2% and Hispanic workers seeing a slight uptick, from 26.3% to 26.4%, White workers saw a significant improvement, with the TRU dropping by a half of a percentage point, from 21.6% in October to 21.1% in November. The TRU for women was unchanged at 26.8%, while the TRU for men dropped 0.6 percentage points, from 19% to 18.4%.
Among groups by education level, those without a high school diploma saw the biggest improvement, dropping by 2.7 percentage points, although their rate of functional unemployment remains extremely high at 44.4%. Groups with a high school diploma but no college and those with some college both saw a 0.4 percentage point improvement to 26.1% and 25.1%, respectively. Meanwhile, those with college degrees saw an increase in the functional unemployment rate: the TRU for those with bachelor’s degrees increased 0.2 percentage points, from 14.6% to 14.8%, while those with advanced degrees increased 0.3 percentage points, from 12.2% to 12.5%.
LISEP Chairman Gene Ludwig said a declining TRU is always welcome news, and it is noteworthy most are holding their own, even in the face of rising prices. But he added a lack of overall improvement among those groups who need it the most is concerning.
“While we are pleased to see an overall gradual improvement in the living-wage job prospects for middle- and working-class Americans, the improvement is so slight as not to put a dent in the losses we have witnessed over the last two decades, and minority populations are seeing no progress at all,” Ludwig said. “Simply ‘not falling behind’ is not good enough. It should be our collective resolution for the upcoming year to focus our efforts on helping those who need it the most.”
About TRU
LISEP issued the white paper “Measuring Better: Development of ‘True Rate of Unemployment’ Data as the Basis for Social and Economic Policy” upon announcing the new statistical measure in October 2020. The paper and methodology can be viewed here. LISEP issues TRU one to two weeks following the release of the BLS unemployment report, which occurs on the first Friday of each month. The TRU rate and supporting data are available on the LISEP website at https://www.lisep.org/tru.
About LISEP
The Ludwig Institute for Shared Economic Prosperity (LISEP) was created in 2019 by Ludwig and his wife, Dr. Carol Ludwig. The mission of LISEP is to improve the economic well-being of middle- and lower-income Americans through research and education. LISEP’s original economic research includes new indicators for unemployment, earnings, and cost of living. These metrics aim to provide policymakers and the public with a more transparent view of the economic situation of all Americans, particularly low- and middle-income households, compared with misleading headline statistics.
About Gene Ludwig
In addition to his role as LISEP chair, Gene Ludwig is a managing partner of Canapi LLC, a financial technology venture fund. He is the founder and CEO of Ludwig Advisors, which counsels financial firms on critical matters. Ludwig is also the founder of the Promontory family of companies. He is the former vice chairman and senior control officer of Bankers Trust New York Corp. and served as the U.S. Comptroller of the Currency from 1993 to 1998. He is also author of the book The Vanishing American Dream, which investigates the economic challenges facing low- and middle-income Americans. On Twitter: @geneludwig.
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SOURCE Ludwig Institute for Shared Economic Prosperity
