Overall improvement for Black, Hispanic
workers; gender pay gap widens
WASHINGTON, July 17,
2024 /PRNewswire/ -- Overall labor market
indicators point to improvements for middle- and lower-income
workers, with "functional unemployment rates" declining and
earnings rising for key demographics, according to a report by
the Ludwig Institute for Shared Economic Prosperity (LISEP).
But the report also reveals gains are unevenly distributed, with
women in the workforce losing ground for the second consecutive
quarter, resulting in the widest gender pay gap in two years.
LISEP issued its monthly True Rate of Unemployment (TRU) for
June in conjunction with the Q2 2024 True Weekly Earnings (TWE)
report. TRU is a measure of the "functionally unemployed" — defined
as the jobless plus those seeking, but unable to find, full-time
employment paying above poverty wages (pegged at $25,000 a year in 2024
dollars), while TWE is a measure of median weekly earnings
(after adjusting for inflation) for all members of the workforce.
This includes part-time workers and the jobless who are seeking
work. By comparison, the Bureau of Labor Statistics headline
numbers only include those who are employed at full-time jobs.
The TWE rose $3 a week in Q2, from
$958 to $961 — but it remains 2% lower than its Q4 2023
levels ($20/week). Black workers
experienced the most significant quarter-over-quarter growth at
3.1%, rising to $810, a $24/week increase — but their earnings remain
2.9% below Q4 2023 levels. Hispanic workers also saw gains, with
earnings up 2.9% ($12/week) to
$788. White workers lost ground,
dropping 1.5% ($16/week) to
$1,064.
Meanwhile, women's earnings declined for the second consecutive
quarter, dropping 1.4% ($12/week) to
$846, while men saw a 0.9% increase
($10/week) to $1,096. This disparity equates to women earning
77 cents for every dollar earned by
men — resulting in the widest gender pay gap since 2022. Low-wage
workers also experienced a setback, with earnings for the bottom
quartile falling 0.1% to $599,
declining for the third consecutive quarter.
"While median wage growth is encouraging, a closer examination
reveals some alarming trends," said LISEP Chairman Gene Ludwig. "Even though Black and Hispanic
workers experienced wage gains, these increases were not sufficient
to close the persistent income gap. Moreover, women and low-wage
workers face declining earnings. Overall improvement does little
for those who continue to lose ground in an otherwise strong
economy."
The overall TRU also improved in June, falling 0.1 percentage
points to 24.5%, primarily due to easing pricing pressures. Black
and Hispanic workers experienced TRU decreases of 1.2 and 2.1
percentage points, respectively, to 26.9% and 26.8%. The TRU for
White workers rose 1.1 percentage points, to 23.8%. But unlike the
TWE, the TRU for men increased 0.3 percentage points to 20.2%,
while the rate for women improved, dropping 0.5 percentage points,
to 29.4% — largely driven by a rising labor force participation
rate for men and a declining participation rate for women. This
month's slight improvement diverges from the TRU's rising
trajectory since the beginning of the year.
"While we would like to see a silver lining in even modest
improvements, more sustained progress needs to be made to reverse
the worsening economic picture faced by low- and middle-income
workers over the last year," Ludwig said. "If we are to right the
ship, we need a wholesale shift in how we manage the economy. And
that begins with policymakers focusing economic stimulus efforts on
those individuals, and communities, that need it the most."
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 TWE
LISEP issues the TWE quarterly following the
release of the BLS Median Weekly Earnings report. The full white
paper, "Understanding the Status of American Workers Through
Analysis of Current Population Data," can be viewed here. The TWE
rate and supporting data are available on the LISEP website at
https://www.lisep.org/twe.
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.
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 founder
and CEO of Ludwig Advisors, which counsels financial firms on
critical matters. 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. On X (formerly Twitter): @geneludwig.
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SOURCE Ludwig Institute for Shared Economic Prosperity