Living-Wage Job Growth Stalls for November, Ludwig Institute Reports

Monthly functional unemployment rate virtually unchanged, but big improvement over last year

December 16, 2021

For Immediate Release

WASHINGTON, D.C. — Living-wage job growth has seemingly stalled from October to November, but remains improved over a year ago, according to the monthly True Rate of Unemployment (TRU) data released by the Ludwig Institute for Shared Economic Prosperity (LISEP).

LISEP’s TRU, a measure of the “functionally unemployed” — defined as those seeking, but unable to find, full-time employment paying above the poverty level — increased by 0.1 percentage point, from 23.5% in October to 23.6% in November. By contrast, the official unemployment report issued by the U.S. Bureau of Labor Statistics (BLS) showed a marginal decrease, from 4.6% to 4.2%.

While a slowing of living-wage job growth is concerning, it can certainly be expected with the onset of the winter months and a new COVID variant complicating matters, according to LISEP Chair Gene Ludwig, who also notes the improvement in the TRU over just one year ago, when 25.7% were defined as functionally unemployed — a 2.1 percentage point difference.

“It is never good for an economy when 23.6% of workers are unable to find a full-time, living-wage job, but considering where we were a year ago, we are seriously moving in the right direction for the first time in a long time,” Ludwig said. “Good economic policy, focusing on the creation of well-paying jobs, is what we need to move our nation forward, and hopefully Congress will have the wherewithal to see it through.”

Most major demographics only saw minor changes in the TRU from October to November, with Black workers seeing a 0.2 percentage point increase (26.7% to 26.9%) and White workers experiencing a 0.6 percentage point decrease (from 22.3% to 21.7%). Male and female workers perfectly offset each other, with male workers seeing a 0.3 percentage point increase in functional unemployment rate (18.5% to 18.8%), while women saw a 0.3 percentage point improvement, dropping from 29.1% to 28.8%.

The notable exception was the Hispanic TRU, which jumped from 27.4% to 28.5%, a 1.1 percentage point increase, erasing gains made earlier in the year. This could be due to those workers accepting employment in temporary positions that ended with the onset of winter, according to LISEP.

“Obviously the sustainability of an economic recovery is incumbent upon all segments of the population having the opportunity to participate equally, and this should be of utmost concern to policymakers,” Ludwig said. “We’ve come a long way in the past year. Now we must keep the momentum going.”

Living-Wage Job Growth Stalls for November, Ludwig Institute Reports

Monthly functional unemployment rate virtually unchanged, but big improvement over last year

‍Jim Gardner

December 16, 2021

For Immediate Release

Historically, systemic barriers have disproportionately hampered Black farmers’ ability to retain land ownership.

Despite this tragic history, there is still time and economic incentive to set some of the inequities right.

In 2021, working mothers with children under 18 earned just 61.7 cents for every dollar a father made. Much wider than the overall gender wage gap, this difference highlights both the motherhood penalty and the fatherhood premium.

Female-dominated, low-paying, part-time occupations are overrepresented among informal workers who also have a formal job.

We need to create an economic environment where companies can hire these workers as employees and pay them a living wage. There are steps policymakers can take to change the gig economy dynamic.

Dependency on tips over base pay is growing because of actions taken by gig companies to institute tipping.

Even for those lucky enough to be making what amounts in many states to the poverty wage of $15 per hour, many will get nothing but a week’s notice before being out on the street.

One study shows that consistent involvement in extracurricular activities increased a child’s likelihood of attending college by a whopping 400% compared to not being involved at all.

Studies have found that both men and women are paid less if they work in “nurturant” occupations.

Since 2015, the correlation between LISEP’s functional employment to population ratio and the inflation rate was more than four times as strong as the BLS’s employment to population ratio, which is depicted in the graph below.

The employment to population ratio settles the discrepancy between what we see around us and what the data says.

The NBER paper defines employment using the traditional BLS U-3 rate. However, the often-used U-3 number fails to capture the quality of jobs.

Among states with stricter COVID-19 policies, reducing unemployment benefits had little to no effect. The average effect of increased employment seems to have occurred only in those states with looser COVID protocols.

Press Contact:

‍Jim Gardner

press@lisep.org

(573) 680-1822

Additional Resources:

TRU Summary

TRU White Paper

TRU & TWE Methodology

TRU & TWE Source Data

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 lisep.org/tru.

About LISEP

The Ludwig Institute for Shared Economic Prosperity (LISEP) was created in 2019 by Gene 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 Twitter: @geneludwig.

Please Note:

The Ludwig Institute for Shared Economic Prosperity continuously revises and updates its data. As a result, data presented in this release may no longer reflect the latest estimates. Find the most current data at lisep.org.