About 1 in 4 Americans are "functionally unemployed," researcher says
While the unemployment rate remains near a 50-year low, another measure of worker well-being indicates there may be bigger cracks in the labor market.
The low unemployment rate, which stood at 4.2% in April, has signaled to economists and investors alike that the U.S. economy remains relatively healthy. Employers are also continuing to hire despite headwinds like tariffs and plunging consumer confidence.
But another indicator suggests those pieces of government data may be painting an overly rosy picture of the economy, with a recent report from the Ludwig Institute for Shared Economic Prosperity (LISEP) finding the "true rate" of unemployment stood at 24.3% in April, up slightly from 24% in March, while the official Bureau of Labor Statistics rate remained unchanged at 4.2% over the same period.
LISEP's measure encompasses not only unemployed workers, but also people who are looking for work but can't find full-time employment, as well as those stuck in poverty-wage jobs. By tracking functionally unemployed workers, the measure seeks to capture labor market nuances that other economic indicators miss, such as Americans who are left behind during periods of economic expansion.
"The unemployment data, as it's put out, has some flaws," LISEP chairman Gene Ludwig told CBS MoneyWatch. "For example, it counts you as employed if you've worked as little as one hour over the prior two weeks. So you can be homeless and in a tent community and have worked one hour and be counted, irrespective of how poorly-paid that hour may be."
LISEP, in a working paper on the gauge, says the measure prevents part-time jobs or poorly paid work from being counted as equal to full-time and better-paid work. LISEP also argues that the unemployment rate "presents a very incomplete and, in many ways, misleading picture."
In other words, people who lack steady work and don't earn living wages shouldn't be counted as functionally employed. Its True Rate of Unemployment (TRU), which began tracking the measure in 2020, encapsulates workers whose earnings don't allow them to make ends meet, and are struggling just to get by, according to LISEP.
"If you're part time and can't get a full-time job, then we count you as functionally unemployed," Ludwig noted. "We also count as functionally unemployed people who don't earn above a poverty wage."
"Survival mode"
In so doing, it counts workers who can't afford to put roofs over their heads, can't procure nuturious meals and don't have the ability to save as being functionally unemployed.
"You don't have anything that gets you to the first rung of the American dream ladder. You're in survival mode," Ludwig said.
When broken down by race and gender, TRU shows Hispanic, Black and women workers faring worse than White workers, as well as men.
More than 28% of Hispanic workers, and nearly 27% of Black workers are functionally unemployed, compared to 23% of White workers. And more female workers — 28.6% — are functionally unemployed than male workers, whose true rate of unemployment stands at 20%, according to LISEP.
Millions of households are currently struggling to maintain a "minimal quality of life," according to another recent analysis from LISEP.
Its research found that the lowest-earning Americans around the U.S. are falling well short of what they need to maintain a decent standard of living. These households earned an average of $38,000 per year in 2023, but would need to make $67,000 to afford the items the group tracks as part of its index, which also includes the cost of professional clothing and basic leisure activities.
The wide chasm between the the BLS's measure of unemployment and its true rate of unemployment is also concerning, according to Ludwig.
"If you say there's 4.2% unemployment, which makes political folks happy because it's a low number, it causes all kinds of poor policy decisions and assumes we are better off than we are," Ludwig said. "There's less energy and less of a push to improve employment, and the people who get hurt at middle- and low-income Americans."
Delta Air Lines' 100th year takes flight
9 young siblings killed in Israeli airstrike in Gaza
Full interview: Jack McCain on "Face the Nation"
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Chicago Tribune
an hour ago
- Chicago Tribune
Steel industry experts react to Nippon Steel, U.S. Steel deal
One Pittsburgh-based industry expert said he can't think of any concerns people should have about a deal between U.S. Steel and Japan-based Nippon Steel. 'It's a massive investment,' said Josh Spoores, head of Steel Americas Analysis at CRU Group. 'If we as a country want to restore manufacturing, we need to have competitively priced and plentiful inputs, such as labor, energy, materials, and this allows more steel to be ready for future manufacturing growth.' The United Steelworkers Union still remains concerned about what Nippon's involvement in U.S. Steel means, saying much is still up in the air. 'Our core concerns about Nippon Steel — a foreign-owned corporation with a documented history of violating U.S. trade laws — remain as strong and valid today as ever,' said a May 28 union statement, 'and that is so whether U.S. Steel and Nippon adhere to the same deal that they have pursued since December 2023 or whether they tweak the terms to satisfy concerns in Washington.' On May 23, President Donald Trump announced that he would approve an investment from the Japanese company to U.S. Steel. A 'planned partnership' would add $14 billion to the U.S. economy, but details of what it entails are still unclear. If the deal is accepted, the U.S. government would receive 'a golden share,' Bloomberg reported this week. With the 'golden share,' the government would have de facto veto rights on company decisions and appointments. The 'golden share' seemingly fixes concerns related to national security, which the Committee on Foreign Investment in the United States cited as its reasoning for not supporting the deal. Former President Joe Biden also cited national security concerns in December when he did not approve the deal. During his campaign, Trump vowed to block the acquisition of U.S. Steel. In February, Trump began to try to undo Biden's actions, saying Nippon would drop its $14.1 billion acquisition of U.S. to make an 'investment, rather than a purchase,' according to Post-Tribune archives. In a May 23 statement, U.S. Steel supported Trump's moves to finalize a deal with Nippon Steel. 'U.S. Steel will remain American, and we will grow bigger and stronger through a partnership with Nippon Steel that brings massive investment, new technologies and thousands of jobs over the next four years,' the statement said. 'U.S. Steel greatly appreciates President Trump's leadership and personal attention to the futures of steelworkers and our iconic company.' A U.S. Steel spokesperson declined to provide additional comment about the potential deal, including about USW concerns. Trump held a rally at the Mon Valley Works–Irvin Plant in West Mifflin, Pennsylvania, outside Pittsburgh, Friday night to laud the deal. 'We're here today to celebrate a blockbuster agreement that will ensure this storied American company stays an American company,' Trump said as he opened an event at one of U.S. Steel's warehouses. 'You're going to stay an American company, you know that, right?' Trump also made news, saying that he was doubling the tariff on steel imports to 50% to protect their industry, a dramatic increase that could further push up prices for a metal used to make housing, autos and other goods. In a social media post later, he added that aluminum tariffs would also be doubled to 50%. He said both tariff hikes would go into effect Wednesday. 'I have to approve the final deal with Nippon and we haven't seen that final deal yet, but they've made a very big commitment and it's a very big investment,' he told reporters after arriving back in Washington. In USW's May 28 statement, the union said closed-door discussions have been had about the deal, but the union has not been included. Spoores believes union workers will be the biggest winners if the deal between the two steel companies is finalized. Billions of dollars have been promised to union-represented facilities, Spoores said. 'The union is not only keeping jobs, but they should be adding jobs,' he added. 'If the union wasn't involved in this, it was likely that some facilities would have been shut down, so they would have likely lost jobs. The impact of the government's involvement with the steel companies is unknown, Spoores said. 'The impact might take a handful of years,' he added. 'Maybe in four, maybe in six years, the market in the U.S. for flat rolled steel sheet is potentially moving from a net-importer market to one where we no longer need imports because we built enough capacity in the U.S.' Micah Pollak, associate professor of economics at Indiana University Northwest, said effects of the potential partnership on Northwest Indiana are still unknown. 'Unfortunately, I do think a lot of the concerns of the deal, especially for Northwest Indiana, have to do with what happens with the contracts that the labor unions have negotiated,' Pollak said. 'Will those be preserved? Will they have to renegotiate them? And then, will we see reduced employment in Northwest Indiana?' Gary Mayor Eddie Melton has been supportive of a deal between Nippon and U.S. Steel for months, citing how it would benefit Gary Works. In August, it was announced that Nippon Steel would invest $300 million into the local facility. A Nippon executive later said the company would invest $1 billion into Gary Works. On May 23, Melton said in a statement that he was 'extremely pleased' to hear Trump's announcement confirming a partnership between the two companies. 'As mayor, I facilitated conversations with Nippon Steel and talks with mayors in steelmaking cities and towns from around the country,' Melton said. 'I spent months conducting due diligence and listening to the concerns of steelworkers, union leadership and members of the Congressional Black Caucus around the country. I stuck to my guns even when others opposed this deal because I knew it was good for our citizens.' Although Spoores believes the deal is a win for local unions, Pollak believes they should still be worried because details of the partnership are still unknown and are likely to be for a while. 'If part of the deal is building a new furnace in Pennsylvania, does that mean we will see scaled-down employment in Northwest Indiana as a result?' Pollak asked. 'As a result, overall production might stay the same, but maybe we'll see some shifting.' Pollak believes the steel deal could be beneficial, but the benefits aren't black and white. 'There could be a lot of investment in Gary Works, but I also think it could also be a real problem,' Pollak said. 'Hopefully some of the details of the deal help with that. Maybe there are some commitments at plants that are in the works that we don't know about yet.'
Yahoo
an hour ago
- Yahoo
Community members, politicians react to approval of Central Park renovation designs
JOHNSTOWN, Pa. (WTAJ)– If you've been to any recent Johnstown City Council meetings or spoken with community members it's clear that there is a divide on where people stand regarding the Central Park renovation project. 'If they're going to listen to the people directly, then I'm for it, but if it's just wham bam thank you ma'am just out the air, then no,' Johnstown resident Tereah Henderson said. Several people took advantage of the good weather on Friday morning to check out the farmer's market around Central Park. Some say that they hope a revitalized park will help create new events like it in the future. Johnstown companies awarded $256 million in military defense contracts 'I mean there's businesses down here and if they're still going to do a lot of these events close by, I don't see why it would hurt,' Johnstown Resident Vicky Cobaugh said. The City Council voted on Wednesday to approve the final plans for the project. The project uses funds from the American Rescue Plan Act to cover the cost of the $6 to $8 million renovation. More than one and a half million has already been spent in the design phase, and as for the rest of the money designated for the project, the city either has to use it or lose it. Using funds from the American rescue Plan Act has come under scrutiny throughout the discussions of the project, even from State Representative Frank Burns. 'We have a police station that is falling apart, and it needs attention quickly,' Burns said. Now whether that's a new police station, or building, building a new one, renovating the one that's already there, all that matters is that we have a suitable place for our police officers to work out of and protect the public. They could have used that money to hire more police officers. I've been touting that for 3 years now. That they should use this money to hire more officers but they chose the park as their top priority. ' 'Truthfully, I told them on Wednesday night to give the money back,' Republican Candidate for Mayor John Debartola said. Debartola said that he believes the project will devastate downtown businesses and is upset that it will remove some landmarks like the Pasquerilla Fountain. The plans also call for a new and expanded gazebo and a new Walk of Honor. Instead, Debartola said he would rather see repairs to the current design. 'Take a look at this park when you do a video pan, it needs improvements, it doesn't need eight million dollars,' Debartola said. 'It doesn't need two million spent on plans to friends and family.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
an hour ago
- Yahoo
Wes Moore dives into 2028 race in South Carolina
COLUMBIA, SOUTH CAROLINA — Wes Moore made an early and urgent appeal Friday to one of the nation's most important Democratic constituencies. The first-term governor of Maryland said Democrats must adapt and change to counter President Donald Trump and improve life for the middle class if they have any hope of returning to power. 'Gone are the days when we are the party of bureaucracy, multi-year studies, panels, and college debate club rules,' Moore said in a speech before party insiders at the South Carolina Democrats Blue Palmetto Dinner. 'We must be the party of action.' South Carolina has a track record of vaulting Democratic primary winners to the White House, and Moore's premium speaking slot before the state's well-connected party leaders does little to tamp down speculation he's kicking the tires on an upcoming presidential bid. In a state where Donald Trump cruised to an 18-point victory nearly seven months ago, Moore said Democrats must also take cues from an unlikely instructor: the president himself. 'Urgency is the instrument of change. And do you know who understands that really well? Donald Trump,' Moore said. 'I want to be clear: We can — and we must — condemn Donald Trump's reckless actions. But we would also be foolish not to learn from his impatience.' Moore talked about his roots in Charleston, where his grandfather was born, his Army service and record on crime and job creation in Maryland. He also spoke about the perilous times the country faces, and told the crowd that he is on a 'mission' to help deliver adequate health care and livable wages for those who need them. It's a vision Moore sought to contrast with the 'reckless actions' of Trump. Moore, 46, is seen as one of the party's most promising young stars and has caught the attention of Hollywood icon and Democratic megadonor George Clooney. While many Democrats are eager to turn the page after difficult electoral losses last cycle, the governor told the party faithful that mustering up the courage to fight can't wait until the next presidential cycle. 'Anyone who is talking about 2028 does not understand the urgency of 2025,' Moore said. Earlier on Friday, Moore toured the Scout Motors Production Facility in nearby Blythewood and planned to attend a campaign-style fish fry after the dinner — making his visit seem even more like a tryout for 2028. Moore, Maryland's first — and currently the nation's only — Black governor has drawn the ire of a handful of Democrats back home and in South Carolina over his veto of a reparations bill passed by the state legislature. The measure called for the study of historic race-based inequality in the state. At least one South Carolina lawmaker, state Rep. John King, called for Moore to be disinvited from the gala. 'The governor's veto doesn't just affect Maryland,' said King, who boycotted the dinner. 'It echoes in every state where Black lawmakers are already working uphill. It makes our jobs harder, and that's something we can't afford to ignore.' The issue of reparations remains politically divisive, with a 2022 Pew Research Center survey showing that 77 percent of African Americans supported them, while less than 20 percent of white respondents did. In the governor's veto letter he suggested that with economic headwinds facing his state, it is an inopportune time to fund 'another study.' Moore has also followed other Democrats thought to be eyeing White House runs by sitting for more podcast interviews. This includes a recent appearance on 'The Breakfast Club' co-hosted by Charlamagne tha God and Kara Swisher's podcast to talk about DOGE cuts and impact to his state. He recently traveled to Georgia, a key swing state, to record an episode of a podcast hosted by Atlanta Mayor Andre Dickens and taped a hoops workout with basketball shooting coach and influencer Chris Matthews. A person familiar with Moore's schedule said he's limiting the number of out-of-state invites he is accepting to focus on his role in Maryland. But the person stressed he plans to hit the campaign trail in Virginia and New Jersey — both of which hold statewide elections this fall.
