#United States #Washington #Functional Unemployment #Ludwig Institute #Black Workers

Functional Unemployment Surges in February

According to the latest report from the Ludwig Institute for Shared Economic Prosperity (LISEP), functional unemployment saw a notable increase in February, with particularly negative impacts on women and Black workers. This report outlines the ongoing challenges in labor market conditions faced by these groups.

The True Rate of Unemployment (TRU), a statistic monitored by LISEP, measures those who are jobless, those searching for full-time work, and individuals earning a wage below the poverty line. In February, the TRU rose to 24.7%, marking an increase of 0.8 percentage points. In contrast, the official unemployment rate reported by the Bureau of Labor Statistics rose modestly from 4.3% to 4.4%.

Over the previous three months, the average TRU was 24.6%, slightly higher than the 24.3% recorded during the first six months of the prior year. This increase suggests that the labor market remains volatile and continues to weaken, particularly for vulnerable populations. Gene Ludwig, the chair of LISEP, emphasized that February's rise in functional unemployment likely reflects ongoing instability rather than a consistent trend toward improvement.

Among the demographic groups, Black workers experienced the most significant rise in TRU, hitting 28.8% after a 1.9 percentage point leap. Hispanic workers saw an increase to 28.1%, whereas White workers' TRU rose to 22.9%, a smaller increase of 0.2 percentage points. The elevation in TRU for Black workers has been particularly concerning, trending upwards since April of the previous year.

As highlighted in the report, the figures for women have also worsened, with their TRU reaching 30.6%, an 0.8 percentage points increase. Meanwhile, men's TRU fell slightly to 18.9%. The widening gender gap in functional unemployment now stands at 10.7 percentage points, an increase from 9.5 percentage points recorded a year prior.

The statistics indicate a troubling trajectory, especially for Black women who have faced considerable employment losses due to various systemic challenges, including recent federal government layoffs impacting their sectors disproportionately. This necessitates a reevaluation of economic strategies aimed at these demographics to ensure equitable recovery in the job market.

Further complicating the outlook are potential geopolitical developments that may introduce economic uncertainties ahead, as cautioned by Ludwig. These factors cast a shadow over the future of employment for already vulnerable groups.

About LISEP

Founded in 2019 by Gene Ludwig and Dr. Carol Ludwig, LISEP is dedicated to enhancing the economic conditions of middle- and lower-income Americans through extensive research and educational endeavors. LISEP aims to redefine unemployment and earning metrics to present a clearer picture of the economic landscape for low- and middle-income households.

With reports like these, LISEP continues to shed light on the diverse experiences and challenges within the labor market, advocating for more effective policies to support those who are most impacted.

About Gene Ludwig

Gene Ludwig is not only the chair of LISEP but also plays a crucial role in the financial technology sector and has authored significant works examining economic disparities in the U.S. His insights are crucial for understanding the broader implications of employment statistics and economic policies affecting vulnerable populations.