More Americans in Living-Wage Jobs as Year-End Approaches, Says Ludwig Institute

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Ludwig Institute for Shared Economic Prosperity

Dec 14, 2022, 11:00 ET

All major demographics see decline in 'functional unemployment' to kick off holiday season

WASHINGTON, Dec. 14, 2022 /PRNewswire/ -- Just in time for the holiday season, American workers saw an increase in the number of living-wage jobs available for November, with functional unemployment dropping for all major demographics, according to the monthly True Rate of Unemployment (TRU) report by the Ludwig Institute for Shared Economic Prosperity (LISEP).

The market for living-wage jobs improved for the month of November, according to the True Rate of Unemployment (TRU), issued monthly by the Ludwig Institute for Shared Economic Prosperity (LISEP). LISEP reports that functional unemployment -- defined as the jobless, plus those seeking, but unable to find, full-time employment paying above the poverty line after adjusting for inflation -- dropped 0.7 percentage points from October to November, from 23.6% to 22.9%.

The TRU for the month of November dropped 0.7 percentage points from October to November, from 23.6% to 22.9%. TRU tracks the "functionally unemployed," defined by LISEP as the jobless, plus those seeking, but unable to find, full-time employment paying above the poverty line after adjusting for inflation.

The drop in TRU reverses the uptrend from September to October, when the rate jumped 1.3 percentage points with the conclusion of summer. The November TRU correlates with the trend toward increased employment reported by the official Bureau of Labor Statistics jobless report for November. However, the BLS pegs the unemployment rate at 3.7% – significantly lower than the TRU due to its designation of part-time and occasional gig workers, as well as those with earnings below the poverty line, as "employed."

"This is an encouraging TRU report, as it indicates that all demographics have improved their opportunity to earn a living wage, not just a select few," said LISEP Chairman Gene Ludwig. "If this trend continues it will be a good way to close out the year, and give us something to build on in 2023."

Black workers enjoyed the biggest improvement in TRU, dropping 1.4 percentage points. But with a TRU at 26.8%, Black workers are still at the highest rate of any demographic category. White workers improved by a full percentage point, dropping from 22.5% to 21.5%, with Hispanic workers dropping half of a percentage point, from 25.9% to 25.4%.

The gender gap improved a bit, with the female TRU dropping 1.3 percentage points and the male TRU remaining unchanged. But a significant gender gap still exists, with a male TRU of 19.1%, versus 27.2% for females.

"The numbers are moving in the right direction, but there are some notable areas of concern, and much, much room for improvement in the upcoming year," Ludwig said. "It is encouraging that in spite of inflationary trends, we are seeing wage earners hold their own and a decrease in functional unemployment. But meanwhile there remains a segment of the population who still faces substantial challenges, with more than one-in-four Black and Hispanic workers either unable to find a job, or are working in poverty."

"Policymakers should work to address these concerns in a targeted yet thoughtful way so that we have an economy that benefits all Americans."

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.

SOURCE Ludwig Institute for Shared Economic Prosperity