WASHINGTON, June 17, 2021 /PRNewswire/ -- More Americans are finding living-wage jobs than prior to the pandemic, signaling an ongoing economic recovery, according to an analysis by the Ludwig Institute for Shared Economic Prosperity (LISEP). Yet the percentage of "functionally unemployed" individuals remains alarmingly high and indicates the need for ongoing policy efforts if the recovery is to continue, said LISEP's chair.
"While we can appreciate the encouragement indicated by the May True Rate of Unemployment (TRU), it is merely an indication that we are not regressing," said Ludwig, former Comptroller of the Currency. "The federal COVID relief package and other proactive measures helped get us to where we are today, but these numbers indicate an additional push is needed if we are to continue down the road of economic recovery."
LISEP's TRU report -- a measure of the "functionally unemployed," defined as the percentage of Americans who are unable to find a full-time job that pays above the federal poverty level -- stands at 23.7% for May. This is a 0.6 percentage point increase over the April rate of 23.1%, a change which may be due in part to seasonal factors, according to LISEP.
Ludwig notes that this is the third consecutive month the TRU has remained below 25%, and is nearly a full 7 percentage points below the May 2020 rate of 30.6%. The May 2021 rate is also lower than the pre-pandemic rate of 24% posted in February 2020.
"Returning to pre-pandemic levels is great, but it's not good enough," Ludwig said. "Most American families were struggling before the pandemic, and they will continue to struggle without aggressive policy measures. This should be a clear signal to Congress to get an infrastructure package passed sooner rather than later to facilitate the creation of dependable, living-wage jobs."
The TRU was virtually unchanged across all demographics, with a substantial gap remaining between Black workers (28.4%) and White workers (21.8%). The rate for Hispanics showed a slight improvement, and stands at 26.8%. A significant gender gap remains, with women posting a 28.1% TRU, versus 19.5% for men.
The Bureau of Labor Statistics (BLS) reported a 5.8% unemployment rate for May, a decline of 0.3 percentage points from April.
"We continue to see significant racial inequality, gender inequality, and an overall wealth gap, all issues that must be addressed if we are to experience a healthy, sustainable economic recovery," Ludwig said.
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. 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 http://www.lisep.org.
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.
SOURCE Ludwig Institute for Shared Economic Prosperity