Ludwig Institute Says Earnings Rise for Q3, Living Wage Jobs Rise in September
‘Functional unemployment’ for blacks and Hispanics at lowest level in 27 years
WASHINGTON, October 18, 2022 /PRNewswire/ — Even after adjusting for inflation, low- and middle-income workers saw notable wage gains for the third quarter of 2022, while the percentage of black and Hispanic workers in full-time jobs and paid is at its highest level since 1995, according to an analysis of the Ludwig Institute for Shared Economic Prosperity (LISEP).
LISEP has published its monthly Real unemployment rate (TRU) for September in conjunction with the quarterly True Weekly Earnings (TWE) for the third quarter of 2022. TRU is a measure of the functionally unemployed – the unemployed, plus those seeking but unable to obtain full-time paid employment above the poverty line. The TWE is a measure of median weekly earnings after adjusting for inflation and differs from data published by the Bureau of Labor Statistics (BLS) by including all members of the labor force, including part-time workers and those seeking actively employed.
LISEP’s TWE reports median weekly earnings for the third quarter of $920from $907 for Q2, even after adjusting for inflation. At 2.93%, Hispanic employees saw the largest increase, rising from $733 at $755 per week, with white workers seeing a 1.5% increase ($996 at $1,011), followed by black workers, with an increase of 0.36% ($758 at $761). Men saw a 1.9% increase in TWE ($1,017 at $1,036), with women showing a 1.1% increase ($798 at $806).
Earners at the bottom – the 25th percentile – saw their real earnings increase by 1.2%, while those at the 75th percentile saw their wages increase by 1.25%. Those at the top end of the scale, at the 90th percentile, saw their inflation-adjusted earnings decline by 1.2%.
This report contains positive news for middle-income people, according to the president of LISEP Gene Ludwig.
“Inflation has presented challenges for all income levels, but especially for middle- and low-income families,” Ludwig said. “Yet it’s encouraging to see these households holding on, and even making marginal gains, despite the rising cost of living.”
LISEP’s employment report was equally encouraging, with a higher percentage of the US workforce finding full-time, paid jobs. The September TRU fell 0.3 percentage points, to 22.3%, with the rate for Hispanic workers dropping 2.6 percentage points, to 23.5%, and the TRU for black workers dropping by 1.5 percentage points, to 24.8%. Both figures represent the lowest URR for these groups dating back to 1995, the first year for which LISEP has data.
The URR for white workers rose 0.9 percentage points, to 21.8%. The URR for male workers fell by 1.3 percentage points, to 17.2%, while for females the rate increased by 0.9 percentage points, to 28.1%.
“Overall, this is a good report in terms of increasing job opportunities and decent wages for middle and low income families. But we know that inflation, coupled with rising interest rates, poses a threat to middle- and low-income families — something policymakers need to watch very closely,” Ludwig said.
LISEP published the white paper “Measuring Better: Development of ‘True Rate of Unemployment Data as the Basis for Social and Economic Policy” when announcing the new statistical measure in October 2020. 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.
LISEP publishes the quarterly TWE following the publication of the BLS Median Weekly Earnings report. The full white paper, “Understanding the Status of American Workers Through Analysis of Current Demographics,” can be viewed here. The TWE rate and supporting data can be found on the LISEP website at https://www.lisep.org/earnings.
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. LISEP’s original economic research includes new indicators for unemployment, income and the cost of living. These measures are intended to provide policymakers and the public with a more transparent view of the economic situation of all Americans, especially low- and middle-income households, than misleading general statistics.
About 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 founder and CEO of Ludwig Advisors, which advises financial firms on critical issues. Ludwig is the former Vice President and Chief Controller 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. On Twitter: @geneludwig.
SOURCE Ludwig Institute for Shared Economic Prosperity