Growth in living-wage jobs stagnates in February, says Ludwig Institute
LISEP’s Real unemployment rate (TRU) for February – a measure of the functionally unemployed, defined as those out of work, plus those seeking but unable to obtain full-time paying employment above the poverty line – increased from 22.5% at 22.6%. This is the first increase in TRU since May 2021and contrasts with the unemployment rate published by the US government by the US Bureau of Labor Statistics, which reported a drop in the unemployment rate, from 4% to 3.8%.
All major demographics improved from January or remained stable, except for the TRU for black workers, which saw a significant 0.5 percentage point increase in the number of functionally unemployed, from 25, 8% to 26.3%. But at the same time the Black TRU out of population – a measure of the functionally unemployed over the entire adult population (aged 16 and over), and not just the active working population – remained unchanged. This indicates that formerly discouraged black workers are returning to the workforce, but are not finding full-time, paid jobs.
“While the steady rate of TRU and the return of discouraged workers to the workforce can be seen as encouraging signs, the fact is that more than a fifth of the workforce is still unable to find jobs. remunerated”, declared the president of LISEP. Gene Ludwig. “That number jumps to a quarter for black workers. This is concerning and will become even more so if wages fail to keep pace with current inflationary trends – thus pushing more workers into the realm of functionally unemployed.”
But as the jobless rate for black workers rose, the rate for Hispanic workers fell from 25.4% to 25.1%. The URR for white workers remained stable at 21.5%. And while the URR for women dropped from 28% to 27.7%, the rate for men increased from 17.7% to 18.1%.
Ludwig notes that even a stable TRU can mean bad news for low- and middle-income workers, with inflationary pressures taking an ever-larger part of household budgets. Last week, LISEP published data supporting its Actual cost of living (TLC) Index, a measure of the effect of rising prices on families’ ability to afford adequate minimum needs in seven categories: food, shelter, health care, transportation, basic technology, child care and clothing/personal care. LISEP has found that over the past 20 years, the cost of these minimum adequate needs – which represent most, if not all, of the IMT household budget – has increased by 40% more than the rate indicated by the LISEP. consumer price index (CPI).
“A large percentage of American working families are under financial pressure on many fronts – the inability to find gainful employment, wages that do not keep up with inflation and the continuing increase in the cost of living, which they experience. for 20 years,” Ludwig said. “While some progress is being made, it cannot come quickly enough for low- and middle-income households. Policy makers need to recognize this and act accordingly.”
LISEP published the white paper “Measuring Better: Development of ‘True Rate of Unemployment Data as the Basis for Social and Economic Policy” when the new statistical measure was announced in October. The document and the methodology can be consulted here. LISEP issues the TRU one to two weeks after 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.
The Ludwig Institute for Shared Economic Prosperity (LISEP) was created in 2019 by Ludwig and his wife, Dr. Carole Ludwig. LISEP’s mission is to improve the economic well-being of middle- and low-income Americans through research and education, and seeks to advance the dialogue around policy solutions to improve the well-being of all Americans.
On Gene Ludwig
In addition to his role as President of LISEP, Gene Ludwig is the founder of the Promontory family of companies and Canapi LLC, a fintech venture capital fund. He is the CEO of Promontory MortgagePath, a technology-based mortgage management and solutions company. Ludwig is the former Vice President and Chief Comptroller of Bankers Trust New York Corp., and served as Comptroller of the United States Currency from 1993 to 1998. He is also the author of the book The fading American dream, which studies the economic challenges faced by low- and middle-income Americans. He left in September 2020 by Disruption Books. On Twitter: @geneludwig.
SOURCE Ludwig Institute for Shared Economic Prosperity