Percentage of Black workers in poverty-wage
jobs climbs, reversing previous improvements
WASHINGTON, June 20,
2024 /PRNewswire/ -- Lower-income workers took a
hit in May, with the overall "functional unemployment" rate
climbing by nearly a half percentage point and a spike in the True
Rate of Unemployment (TRU) for Black workers, according to the
latest TRU report by the Ludwig Institute for Shared Economic
Prosperity (LISEP).
The TRU measures the "functionally unemployed," defined as the
jobless plus those seeking, but unable to find, full-time
employment paying above poverty wages (pegged at $25,000 a year in 2024
dollars) after adjusting for inflation. May's overall TRU
increased from 24.2% to 24.6%, a 0.4 percentage point increase,
with Black workers experiencing an even higher increase: the TRU
for Black workers jumped 2.4 percentage points, from 25.7% to
28.1%. By contrast, the official unemployment rate as reported by
the U.S. Bureau of Labor Statistics increased a negligible 0.1
percentage points, from 3.9% to 4.0%.
"Even with cooling inflation, workers in lower-wage jobs are
still fighting for economic survival," said LISEP Chairman
Gene Ludwig. "And while headline
statistics still indicate a robust economy, this month's TRU seems
to better reflect the challenges everyday Americans are
experiencing."
Functional unemployment was also up for Hispanic workers, with
the TRU climbing 0.2 percentage points, from 28.7% to 28.9%. And
while the rate for White workers improved, dropping from 22.9% to
22.7%, LISEP notes that this can be attributed to functionally
unemployed workers leaving the workforce. LISEP reported that the
overall increase in TRU reflects a weakening labor market, which
was accompanied by a 0.2 point decrease in the labor participation
rate.
The TRU for women in the workforce approached 30%, rising by
half a percentage point to 29.9%. The TRU for male workers also
increased, climbing 0.8 percentage points to 19.9%.
"Soaring functional unemployment among women, Black, and
Hispanic workers — with the TRU nearing 30% for these groups — is a
wake-up call for policymakers," Ludwig said. "We need solutions
that address the lived experiences of these communities, not
policies based on misleading headline statistics."."
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