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Living-Wage Job Market Rebounds in January, Says Ludwig Institute
‘Functional unemployment’ drops for women as gender gap narrows

WASHINGTON, D.C. — The living-wage job market rebounded in January with White and Black workers posting gains and the gender gap closing, according to the monthly True Rate of Unemployment (TRU) report by the Ludwig Institute for Shared Economic Prosperity (LISEP).

The TRU measures the “functionally unemployed,” defined as the jobless plus those seeking, but unable to find, full-time employment paying above the poverty line (pegged at $25,000 a year in 2024 dollars). In January, the TRU decreased half a percentage point, from 23.8% to 23.3%. With the official Bureau of Labor Statistics (BLS) unemployment rate holding steady at 3.7% and a 62.5% Labor Force Participation Rate, LISEP suggests more workers transitioned to full-time, living-wage jobs in January.

LISEP Chairman Gene Ludwig said that while positive, it's crucial to consider other data points for a comprehensive analysis and advises interpreting the January TRU report within its context.

“While the first TRU report of 2024 brings us some good news, job creation alone falls short. We need stable, living-wage jobs capable of supporting families,” Ludwig said. “We must dig deeper to better understand the economic realities of working families and establish long-term policies that are truly beneficial.”

Black workers posted the most significant reduction in functional unemployment, with a TRU that dropped from 27.1% to 26.2%, a 0.9 percentage point improvement. The TRU for White workers improved by half a percentage point, dropping from 22.2% to 21.7%, while the TRU for Hispanic workers was basically flat with a 0.1 percentage point drop in functional unemployment, from 27.9% to 27.8%.

Meanwhile, women in the workforce saw a significant improvement in living-wage employment. This, when combined with an increase in functional unemployment for men, led to a 2 percentage point closure of the functional employment gender gap. The TRU for men jumped 0.8 percentage points, from 18.4% to 19.2%, while the TRU for women improved by 1.3 percentage points, dropping to 28%.

“This improvement in living-wage employment is encouraging, but we still have a long way to go to get where we want to be,” Ludwig said. “Decades of declining living-wage opportunities cannot be reversed overnight. Policymakers must commit to sustained action, acknowledging the struggles of working families and building the foundation for greater prosperity and upward mobility.”

Living-Wage Job Market Rebounds in January, Says Ludwig Institute
‘Functional unemployment’ drops for women as gender gap narrows
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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.

WASHINGTON, D.C. — The living-wage job market rebounded in January with White and Black workers posting gains and the gender gap closing, according to the monthly True Rate of Unemployment (TRU) report by the Ludwig Institute for Shared Economic Prosperity (LISEP).

The TRU measures the “functionally unemployed,” defined as the jobless plus those seeking, but unable to find, full-time employment paying above the poverty line (pegged at $25,000 a year in 2024 dollars). In January, the TRU decreased half a percentage point, from 23.8% to 23.3%. With the official Bureau of Labor Statistics (BLS) unemployment rate holding steady at 3.7% and a 62.5% Labor Force Participation Rate, LISEP suggests more workers transitioned to full-time, living-wage jobs in January.

LISEP Chairman Gene Ludwig said that while positive, it's crucial to consider other data points for a comprehensive analysis and advises interpreting the January TRU report within its context.

“While the first TRU report of 2024 brings us some good news, job creation alone falls short. We need stable, living-wage jobs capable of supporting families,” Ludwig said. “We must dig deeper to better understand the economic realities of working families and establish long-term policies that are truly beneficial.”

Black workers posted the most significant reduction in functional unemployment, with a TRU that dropped from 27.1% to 26.2%, a 0.9 percentage point improvement. The TRU for White workers improved by half a percentage point, dropping from 22.2% to 21.7%, while the TRU for Hispanic workers was basically flat with a 0.1 percentage point drop in functional unemployment, from 27.9% to 27.8%.

Meanwhile, women in the workforce saw a significant improvement in living-wage employment. This, when combined with an increase in functional unemployment for men, led to a 2 percentage point closure of the functional employment gender gap. The TRU for men jumped 0.8 percentage points, from 18.4% to 19.2%, while the TRU for women improved by 1.3 percentage points, dropping to 28%.

“This improvement in living-wage employment is encouraging, but we still have a long way to go to get where we want to be,” Ludwig said. “Decades of declining living-wage opportunities cannot be reversed overnight. Policymakers must commit to sustained action, acknowledging the struggles of working families and building the foundation for greater prosperity and upward mobility.”

Notes
‍Jim Gardner
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