Latest news with #LudwigInstituteforSharedEconomicProsperity
Yahoo
6 days ago
- Business
- Yahoo
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"
Yahoo
15-05-2025
- Business
- Yahoo
New Study Says Most Americans Can't Afford a Basic Life
A new study paints a grim picture of American economic life: Most households aren't making enough to cover the basic costs of living, even when working full time. According to the Ludwig Institute for Shared Economic Prosperity (LISEP), the majority of Americans are falling short of what the organization calls a 'Minimal Quality of Life.' The report defines that standard not just by food and shelter, but also by access to education, healthcare, professional clothing, child care, and basic leisure—essentials for stability, not luxury. The analysis zeroes in on the bottom 60% of U.S. income earners, who brought in an average of $38,000 in 2023. To meet the threshold for a minimal standard of living, they'd need to earn about $67,000, which is almost double their current income. 'The middle class has been declining — we just haven't recognized it fully,' LISEP Chairman Gene Ludwig told CBS News. 'The American dream isn't supposed to mean living in a tent or stealing to survive. It's about having a shot at a decent life through hard work.'From 2001 to 2023, the cost of this 'American dream basket' doubled. In-state public college tuition jumped 122%. Health care and housing spiked. Meanwhile, median wages for the bottom 60% fell by 4% after adjusting for those same costs. While top earners have seen faster income growth, the rest are barely treading water. And unless something changes, the divide is only going to widen. LISEP says the goods and services that define a basic standard of living are inflating faster than wages can keep up with. In other words, the American economy may be growing, but for most U.S. households, it's not growing in a way that feels like progress.
Yahoo
13-05-2025
- Business
- Yahoo
Most Americans don't earn enough to afford costs of living, study finds
The gap between what Americans earn and how much they need to bring in to achieve a basic standard of living is growing, according to a new report. The analysis, from the Ludwig Institute for Shared Economic Prosperity (LISEP), looks beyond whether people can afford daily necessities like food and shelter to consider whether they have the means to pay for things like the technology tools necessary for work, higher education, and health and child care costs. In tracking costs associated with what the group calls a "basket of American dream essentials," LISEP says its Minimal Quality of Life index provides a truer picture of how Americans are faring than standard economic data, such as the nation's gross domestic product and jobless rate. The findings? For the bottom 60% of U.S. households, a "minimal quality of life" is out of reach, according to the group, a research organization focused on improving lower earners' economic well-being. "The middle class has been declining — we just haven't recognized it fully," LISEP Chairman Gene Ludwig told CBS MoneyWatch. "It's really dangerous because it's the kind of thing that leads to social unrest, and it's not fair. The American dream is not that it's given to you — it's that if you work hard, you have a chance to get ahead and achieve the things in life that you want to achieve. It's not living in a tent, not having to steal." Peering beneath the surface By those standards, the lowest-earning Americans around the U.S. are falling well short, according to LISEP. These households, which in 2023 earned an average of $38,000 per year, would need to make $67,000 to afford the items the group tracks as part of its index, which also includes professional clothing and basic leisure activities. "Traditional headline economic indicators like GDP and unemployment tell us the economy is thriving, but they don't reflect the lived reality of most Americans," Ludwig said in a statement. "Americans are working harder than ever, fueling our economic growth, but the benefits of that hard work are not being distributed in a way that supports upward mobility for too many middle- and low-income Americans." From 2021 to 2023, the cost of affording what amounts to a basic level of economic security doubled, according to LISEP's analysis. Housing and health care costs surged, while the amount of savings required to attend an in-state, public university soared 122%. Meanwhile, median earnings for the bottom 60% of income earners fell 4% over that span when adjusting for the cost of goods tracked by the group's index, according to LISEP. Income growth for these households has also lagged, rising 0.37% per year during the same period — less than half as much as for the top 40% of earners, the group found. The gap between how much low-income families earn and how much they need to afford a minimum cost of living is expected to keep widening, Ludwig told CBS MoneyWatch. "Unfortunately, it is growing because the items that go into the basket of goods and services that make the minimal quality of life are inflating at a higher rate than wages are inflating," he said. MLB makes Pete Rose, "Shoeless" Joe Jackson and others eligible for Hall of Fame Bipartisan concern over Trump's plans to accept jumbo jet from Qatar New Orleans drinking water under threat from Mississippi River saltwater intrusion
