Living-Wage Job Market Rebounds in January, Says Ludwig Institute

'Functional unemployment' drops for women as gender gap narrows

WASHINGTON, Feb. 14, 2024 /PRNewswire/ -- 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."

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 https://www.lisep.org/tru.

About LISEP
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. 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 a managing partner of 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 also the founder of the Promontory family of companies. He 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.

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SOURCE Ludwig Institute for Shared Economic Prosperity