About the Ludwig Institute for Shared Economic Prosperity
Our mission is to improve the economic well-being of middle-and lower-income Americans through research and education.
LISEP produces original economic research to provide a more accurate picture of the well-being of middle- and lower-income families. Our research includes new economic indicators for both unemployment and earnings (more detail below). Our statistics aim to provide policymakers and the public a more transparent view into the economic situation of all Americans as compared with the traditionally relied upon metrics. In addition to unemployment and earnings, we are working on additional economic indicators that will be shared in the coming months.
LISEP also seeks to guide and support policy initiatives that increase opportunities for struggling Americans, including how we can create a business environment that supports good-paying jobs.
True Rate of Unemployment (TRU)
Using data compiled by the Bureau of Labor Statistics (BLS), the TRU tracks the percentage of the U.S. labor force that does not have a full-time job (35+ hours a week) but wants one, has no job, or does not earn a living wage, conservatively pegged at $20,000 annually before taxes (in January 2020 dollars). We consider these individuals functionally unemployed. Even before the COVID-19 pandemic, nearly a quarter of the U.S. workforce was functionally unemployed.
Using data compiled by the Bureau of Labor Statistics (BLS), we calculate the median earnings of everyone who is employed or actively seeking employment. Thus, we take the median earnings of the whole U.S. labor force as defined by the BLS.
By comparison, the BLS headline numbers only include those who are employed at full-time jobs. Thus, if a low-income worker moves from full time to part time, or becomes unemployed, the BLS metric will report that earnings have risen, giving a false sense that earnings are getting better. TWE, on the other hand, gives a more comprehensive view as to how the labor market is performing as a whole.