Meanwhile, percentage of Black, Hispanic
workers in poverty-wage jobs remains high
WASHINGTON, Aug. 14,
2024 /PRNewswire/ -- While overall functional
unemployment remained unchanged in July, the labor market continues
to be challenging for Black and Hispanic workers, with rising
functional unemployment rates fluctuating at levels well above the
overall average, according to the latest True Rate of Unemployment
(TRU) by the Ludwig Institute for Shared Economic Prosperity
(LISEP).
While the U.S. Bureau of Labor Statistics reported a slight
increase in the unemployment rate in July — from 4.1% to 4.3% —
LISEP's TRU provides a more comprehensive view of labor market
conditions. By accounting for underemployment and other factors,
TRU's data suggests a worsening situation for low-income workers,
according to LISEP Chairman Gene
Ludwig.
"Our data consistently indicated a troubling labor market long
before the recent uptick in the official unemployment rate," Ludwig
said. "When individuals are working for poverty wages, they are
essentially 'functionally unemployed.' The current situation may
represent a shift from underemployment to outright
unemployment."
The TRU measures the "functionally unemployed," defined as the
jobless plus those seeking, but unable to find, full-time
employment paying above poverty wages ($25,000 a year in 2024
dollars) after adjusting for inflation. While July's overall
TRU remained unchanged at 24.5%, the labor market experience varied
significantly across demographic groups. Black workers faced
heightened challenges, with their TRU rising from 26.9% to 27.6%.
Hispanic workers experienced an even-steeper increase of 1.2
percentage points, from 26.8% to 28%. In contrast, White workers
saw an overall improvement, dropping from 23.8% to 23.1%.
The TRU for both men and women remained relatively unchanged,
with the rate for men increasing 0.1 percentage points to 20.3% and
the TRU for women dropping 0.2 percentage points, to 29.2%. Among
education categories, those with advanced degrees continue to
maintain the lowest TRU at 12.9%, a 0.8 percentage point
improvement, but those with no high school diploma struggled with
their July TRU climbing to 52.6%, 0.1 percentage points above its
June level.
"Workers at the lower end of the earnings scale have always been
the most vulnerable, even in the most robust economy; and here, we
are seeing families continue to struggle. The truth is, they never
fully recovered from the Great Recession in 2007," Ludwig said. "We
must stop using the stock market and broad, outdated economic
indicators as the sole measure of our national economic health.
They just don't accurately reflect the reality for a majority of
American households."
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 X
(formerly Twitter): @geneludwig.
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SOURCE Ludwig Institute for Shared Economic Prosperity