‘Functional unemployment’ for Blacks reaches six-month high
The percentage of Black Americans unable to find a living-wage job climbed to its highest level in six months, even while other segments of the population enjoyed marginal improvement, according to an analysis released today by the Ludwig Institute for Shared Economic Prosperity (LISEP).
In its monthly True Rate of Unemployment (TRU) report, LISEP determined that for the month of March, 31.8% of Black workers are “functionally unemployed,” defined as seeking but unable to find full-time employment that lifts them over the federal poverty line. This is a 1.7 percentage point increase over February, and the highest Black TRU rate since the 32.7% reported in September 2020.
This is in stark contrast to the official unemployment report issued by the Bureau of Labor Statistics (BLS), which pegged the March Black unemployment rate at 9.6%, a 0.3 percentage point improvement over February. One possible explanation for the disparity between the LISEP TRU and the BLS-reported unemployment rate is that while more Black workers are finding employment, these new jobs are largely low-wage positions that fail to raise workers above the federal poverty level, according to LISEP.
“We continue to see a huge disconnect between the reported economic numbers, and the reality for the majority of Americans,” said LISEP Chairman Gene Ludwig. “Policymakers shouldn’t be fooled by a bullish stock market or what appears to be plummeting unemployment rates. The economic crisis continues for so many American families.”
The overall TRU improved from February to March, dropping from 25.1% to 24.4%, while the BLS rate also showed improvement, dropping from 6.2% to 6.0%. LISEP reports an improving TRU for other demographics: Whites (22.8%, down from 23.0%); Hispanics (from 30.9% to 28.5%); men (20.8% to 20.3%); and women (30.0% to 29.3%).
“What these numbers show is a troubling trend toward an unequal economic recovery, with one-fourth of the workforce still unable to secure a job that will feed a family,” Ludwig said. “The jobs package under consideration by Congress is a step in the right direction, as a lasting recovery needs more than jobs – it needs quality jobs.”
About TRU
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.
About LISEP
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 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
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