Functional Unemployment Remains Steady with Positive Signs for Women in 2024
The current landscape of functional unemployment demonstrates a relatively unchanged status as of November, with a minimal decrease of 0.1 percentage points, based on the True Rate of Unemployment (TRU) produced by the Ludwig Institute for Shared Economic Prosperity (LISEP). This slight adjustment, although minor, reveals significant shifts within various demographic sectors. Particularly notable is the progress observed among women, with a reduction in their functional unemployment by 1.3 percentage points, marking the lowest rate for them in the year of 2024. This development signals a reduction in the gender gap in functional unemployment, now at its narrowest as reported this year.
The TRU encompasses both the unemployed segment of the population and individuals who are actively seeking, yet unable to secure, full-time employment that provides wages above the poverty threshold—specifically set at $25,000 for 2024 after inflation adjustments. In November, this overall rate saw a minor improvement, moving from 24% to 23.9%. Despite this positive trend in functional unemployment, there was a contrasting behavior within the official unemployment metrics as noted by the U.S. Bureau of Labor Statistics, which indicated an uptick of 0.1 percentage points, elevating the official rate from 4.1% to 4.2% during the same timeframe.
In terms of specific demographics, men experienced an increase in their TRU by 0.9 percentage points, reaching 20.8%, the highest figure recorded for them this year. Conversely, women benefitted from the positive shift, experiencing a decline in their TRU to 27.5%, a noteworthy achievement within the ongoing efforts to close the wage gap.
This evolving situation highlights the mixed outcomes present in the current job market as expressed by Gene Ludwig, chairman of LISEP. He remarked on the significance of the decline in functional unemployment rates for women as a promising signal—a potential precursor indicating shifts in the labor market conducive to better outcomes not just for women, but across the board.
Moreover, the report highlighted trends among various ethnic groups, where the TRU for Hispanic workers descended to their lowest level since June, now resting at 26.9%. Meanwhile, White workers saw a slight decline in their TRU from 22.5% to 22.4%. In contrast, the TRU for Black workers increased by 0.7 percentage points, reaching 27.6%.
Ludwig also emphasized that economic metrics do not uniformly reflect positivity across various demographics, reinforcing the view that the national economy does not function as a single entity. To ensure effective national policies, it is crucial for them to cater to the diverse needs of different groups across various geographical locations.
Founded in 2019, the Ludwig Institute for Shared Economic Prosperity has made it its mission to enhance economic well-being among middle- and lower-income Americans through targeted research and educational efforts. It aims to provide more transparent insight into economic conditions that affect lower and middle-income households, as opposed to relying solely on potentially misleading headline statistics.
As we navigate the implications of the current functional unemployment figures, LISEP continues to keep the public informed. Their findings related to TRU are released within one to two weeks of the Bureau of Labor Statistics unemployment reports, providing a more comprehensive picture of the labor market conditions affecting all Americans. The complexities of this data highlight the multifaceted nature of economic challenges faced by various demographic groups, further underlining the necessity for nuanced and inclusive policy development.
The TRU encompasses both the unemployed segment of the population and individuals who are actively seeking, yet unable to secure, full-time employment that provides wages above the poverty threshold—specifically set at $25,000 for 2024 after inflation adjustments. In November, this overall rate saw a minor improvement, moving from 24% to 23.9%. Despite this positive trend in functional unemployment, there was a contrasting behavior within the official unemployment metrics as noted by the U.S. Bureau of Labor Statistics, which indicated an uptick of 0.1 percentage points, elevating the official rate from 4.1% to 4.2% during the same timeframe.
In terms of specific demographics, men experienced an increase in their TRU by 0.9 percentage points, reaching 20.8%, the highest figure recorded for them this year. Conversely, women benefitted from the positive shift, experiencing a decline in their TRU to 27.5%, a noteworthy achievement within the ongoing efforts to close the wage gap.
This evolving situation highlights the mixed outcomes present in the current job market as expressed by Gene Ludwig, chairman of LISEP. He remarked on the significance of the decline in functional unemployment rates for women as a promising signal—a potential precursor indicating shifts in the labor market conducive to better outcomes not just for women, but across the board.
Moreover, the report highlighted trends among various ethnic groups, where the TRU for Hispanic workers descended to their lowest level since June, now resting at 26.9%. Meanwhile, White workers saw a slight decline in their TRU from 22.5% to 22.4%. In contrast, the TRU for Black workers increased by 0.7 percentage points, reaching 27.6%.
Ludwig also emphasized that economic metrics do not uniformly reflect positivity across various demographics, reinforcing the view that the national economy does not function as a single entity. To ensure effective national policies, it is crucial for them to cater to the diverse needs of different groups across various geographical locations.
Founded in 2019, the Ludwig Institute for Shared Economic Prosperity has made it its mission to enhance economic well-being among middle- and lower-income Americans through targeted research and educational efforts. It aims to provide more transparent insight into economic conditions that affect lower and middle-income households, as opposed to relying solely on potentially misleading headline statistics.
As we navigate the implications of the current functional unemployment figures, LISEP continues to keep the public informed. Their findings related to TRU are released within one to two weeks of the Bureau of Labor Statistics unemployment reports, providing a more comprehensive picture of the labor market conditions affecting all Americans. The complexities of this data highlight the multifaceted nature of economic challenges faced by various demographic groups, further underlining the necessity for nuanced and inclusive policy development.
Topics Policy & Public Interest）
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