WASHINGTON, May 20, 2021 /PRNewswire/ — More American workers continue to move into living-wage jobs, with the percentage of Americans classified as “functionally unemployed” dropping to the lowest level since December 2019, according to the Ludwig Institute for Shared Economic Prosperity (LISEP).
In its April True Rate of Unemployment (TRU) report, LISEP’s analysis indicates that the percentage of Americans classified as functionally unemployed – defined as seeking, but unable to find, full-time employment that lifts them over the federal poverty line – has dropped for the third consecutive month and now stands at 23.1%. This is a 1.6 percentage point improvement over March, the largest percentage drop since 1995 (when TRU began to be calculated). This is the lowest TRU since 22.7% in December 2019.
The decrease in the TRU is in contrast to the April unemployment report issued by the Bureau of Labor Statistics (BLS), which showed an uptick in the jobless rate, from 6.0% to 6.1%. According to LISEP Chairman Gene Ludwig, this is an indication that more part-time employees are seeing an increase in hours worked and as the economy reopens, employers are boosting wages
“Three months of wage and employment growth is encouraging, and certainly signals a recovering economy. But we’re far from out of the woods,” Ludwig said. “We still have nearly a quarter of the workforce without a full-time living wage job, which is all the more reason to keep our foot on the gas with aggressive policy initiatives designed to create dependable, good-paying jobs. And it will still take some time for families to recover from the Covid recession – now is not the time to stop unemployment benefits for Americans in need.”
The TRU improved across all demographics, with Black workers posting the biggest improvement, from 31.8% to 27.6% — dropping below 30% for the first time in more than a year. Hispanic workers saw a 1.3 percentage point drop, from 28.5% to 27.2%, while White workers improved from 22.8% to 21.6%. The TRU for men dropped a full percentage point, from 20.3% to 19.3%, thus dropping below 20% for the first time since March 2020. The rate for women also improved, from 29.3% to 27.4%.
Ludwig notes that contrary to analysts and pundits lamenting a “bad” BLS jobs report, he finds the news encouraging, with a larger swath of the workforce moving out of poverty and into living-wage employment.
“April’s job numbers, far from being an indictment, point to a much brighter future,” Ludwig said. “And while we shouldn’t read too much into month-over-month numbers, they are certainly going in the right direction.
“This is a good sign that our economy is rebounding to where it was before the pandemic, but we cannot forget that the pre-pandemic economy was marred by severe inequality, with nearly a quarter of all workers lacking a living-wage job. That’s why we need to take advantage of this generational opportunity to build back better.”
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. 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 http://www.lisep.org.
About LISEP
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, and seeks to advance the dialogue around policy solutions to improve the well-being of all Americans.
About Gene Ludwig
In addition to his role as LISEP chair, Gene Ludwig is founder of the Promontory family of companies and Canapi LLC, a financial technology venture fund. He is the chairman of Promontory Financial Group and CEO of Promontory MortgagePath, a technology-based mortgage fulfillment and solutions company. Ludwig 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. It was released in September 2020 by Disruption Books.
SOURCE Ludwig Institute for Shared Economic Prosperity
