More Americans are joining the workforce, but many are unable to find paying jobs

“Functional unemployment” climbs for black workers

WASHINGTON, September 15, 2022 /PRNewswire/ — According to an analysis of Ludwig Institute for Shared Economic Prosperity (LISEP).

In his monthly Real unemployment rate (TRU) for the month of August, LISEP reported that 22.5% of American workers are now classified as “functionally unemployed”, defined as those without work, plus those who seek but cannot obtain a job on time. full, even if they want to work full time and/or cannot earn above the poverty line after adjusting for inflation. This is an increase of 0.2 percentage points from July’s TRU.

TRU’s sister metric, TRU out of population (TRU OOP) – a measure of those who are functionally unemployed across the entire population, not just active labor market participants – remained unchanged, which, when paired with a rising TRU, indicates that more workers are joining or returning to the labor market.

“It’s a definite positive that previously discouraged workers are re-entering the labor market, but unfortunately their return to the labor market is, in many cases, not a return to full-time employment and living wages. “, declared the founder and president of LISEP. Gene Ludwig. “The challenge for policymakers is to continue to encourage positive growth in job opportunities, but to do so in a way that enables growth in gainful employment for every American who wants it.”

Demographically, black workers saw the biggest jump in TRU, rising 0.6 percentage points from 25.8% to 26.4%. This, along with the 0.7 percentage point rise in the Black TRU OOP, indicates that a higher percentage of black workers are classified as functionally unemployed. Hispanic workers saw no change in the TRU, holding steady at 26.3%, with white workers following the overall TRU and rising 0.2 percentage points, to 20.7%. Men’s TRU increased by one percentage point, from 17.5% to 18.5%, while women fell by half a percentage point, from 27.5% to 27.0% .

Decent-wage job opportunities continue to be an issue for workers with only a high school education, with the URR for this group jumping 2.5 percentage points from 24.5% at 27.0%. Similarly, those without a high school diploma saw their URR increase from 47.3% to 47.6%. The TRU for workers with a university degree (but no university degree) fell from 25.6% to 23.7%, but an analysis of the OOP TRU for this group indicates that the drop is likely due to the fact that discouraged workers in this cohort leave the labor market.

“We know that the cost of living continues to be an issue for low- and middle-income Americans, as inflation continues to erode these workers’ ability to maintain even a basic standard of living. So to In this regard, I’m somewhat relieved there hasn’t been a larger increase in overall TRU,” Ludwig said. “But at the same time we are seeing an alarming decline in opportunities for some minority workers to earn a living wage, which is undoubtedly cause for concern. The bottom line: we can do better.”

About TRU

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


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 Regulatory Group (LRG), which advises financial companies 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

Michael A. Bynum