'Functional Unemployment' Shows Little Change, Says Ludwig Institute

 Rate for women improves; gender gap closes to narrowest of the year

WASHINGTON, Dec. 17, 2024 /PRNewswire/ -- The overall "functional unemployment" rate remained largely unchanged in November, with a slight decline of 0.1 percentage points. However, the functional unemployment rate was marked by mixed trends across demographic groups, led by a 1.3 percentage point decrease for women — contributing to the narrowest gender gap in functional unemployment this year, according to the latest True Rate of Unemployment (TRU) report from the Ludwig Institute for Shared Economic Prosperity (LISEP).

The TRU—a measure of 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—improved slightly in November, dropping from 24% to 23.9%.In contrast, the official unemployment rate as reported by the U.S. Bureau of Labor Statistics increased by 0.1 percentage points, from 4.1% to 4.2%, over the same period.

Despite slight movement in the overall functional unemployment rate, some demographic groups experienced notable shifts. While the TRU for men increased 0.9 percentage points, to 20.8%—the highest for men in 2024—the rate for women dropped 1.3 percentage points, to 27.5%. This decrease marks the lowest TRU for women in 2024, resulting in the narrowest gender gap for living-wage jobs.

"The recent decrease in women's functional unemployment is a significant and encouraging milestone," said LISEP Chairman Gene Ludwig. "This emerging trend signals a potential shift in the labor market that, and we hope to see continued improvement in the coming year."

The TRU for Hispanic workers improved to its lowest level since June, dropping to 26.9%, while White workers saw a slight decrease, from 22.5% to 22.4%. Conversely, the TRU for Black workers increased 0.7 percentage points, from 26.9% to 27.6%

"This past year has shown us that 'good' economic numbers do not necessarily translate into positive outcomes for everyone," Ludwig said. "The economy is not a monolith, but an amalgamation of different groups, geographies, and demographics. For national policy to be effective, it must be treated as such."

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. On X: @LISEP_org.

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.

SOURCE Ludwig Institute for Shared Economic Prosperity