Living-wage employment improves for
White workers, worse for Black, Hispanic earners
WASHINGTON, Feb. 20,
2025 /PRNewswire/ -- The "functional unemployment"
rate improved by 0.4 percentage points in January, falling from
23.7% to 23.3%—but remains 0.3 percentage points higher than a year
ago, according to the latest True Rate of Unemployment (TRU) report
from the Ludwig Institute for Shared Economic Prosperity
(LISEP).
The January TRU—a measure of the "functionally unemployed,"
defined as the jobless plus those seeking, but unable to find,
full-time employment paying above poverty wages ($25,000 a year in 2024
dollars) after adjusting for inflation—showed very uneven
trends across demographic groups, despite the overall improvement.
The TRU for White workers improved for the fifth consecutive month,
falling from 22.1% to 21.6% in January. However, the TRU for Black
workers rose 2.1 percentage points (to 27.8%), and increased 0.4
percentage points for Hispanic workers (to 28.4%).
Based on an average of the last three months, the gap between
Black and White workers is now five percentage points—the largest
gap since August 2022. Similarly, the
three-month average gap between Hispanic and White workers is 5.8
percentage points.
"The bottom line is that overall, things are not getting
better," said LISEP Chair Gene
Ludwig. "Month-to-month fluctuations notwithstanding, the
living-wage job market is worse than it was a year ago. This is not
the formula for a successful economy."
The TRU for women dropped 1.2 percentage points to 28.1%, while
the TRU for men increased by 0.1 percentage points, to 19%. This is
in contrast to the official headline unemployment rate issued by
the U.S. Bureau of Labor Statistics, which pegs the jobless rate
for both men and women at 4%. Based on the TRU, the three-month
average gender gap now stands at 8.8 percentage points.
"While positive trends in January's functional unemployment rate
are welcome, certain groups of workers are not enjoying that same
progress," Ludwig said. "Low- and middle-income households remain
economically vulnerable. It will take acknowledgment of this and
appropriate economic policy to turn things around."
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. On X: @LISEP_org.
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 X
(formerly Twitter): @geneludwig.
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SOURCE Ludwig Institute for Shared Economic Prosperity
