Living-Wage Job Growth Stalls for November, Ludwig Institute Reports
Monthly functional unemployment rate virtually unchanged, but big improvement over last year
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.”
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.
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, and seeks to advance the dialogue around policy solutions to improve the well-being of all Americans.
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 CEO of Promontory MortgagePath, a technology-based mortgage fulfillment and solutions company, and chairman of Promontory Financial Group. 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. It was released in September 2020 by Disruption Books. On Twitter: @geneludwig.