What is the “True Rate of Unemployment”?

The True Rate of Unemployment, as defined by the Ludwig Institute for Shared Economic Prosperity (LISEP), measures the percentage of the U.S. labor force that is functionally unemployed.

Using data compiled by the federal government’s Bureau of Labor Statistics, the True Rate of Unemployment 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.

Just as an accurate census is a prerequisite to funding American communities equitably, policymakers depend on economic indicators to shape economic policy. LISEP developed the True Rate of Unemployment to provide analysts and decision-makers with a more accurate measure of Americans’ financial well-being.

For a more in-depth explanation of the True Rate of Unemployment, please reference this white paper.