Racial gap narrows to one-year low
WASHINGTON, May 16, 2024 /PRNewswire/ -- While the national
"functional unemployment" rate remained unchanged from March to
April, the share of Black workers in poverty-wage jobs declined,
narrowing the racial employment gap, according to the monthly True
Rate of Unemployment (TRU) report by the Ludwig Institute for
Shared Economic Prosperity (LISEP).
The TRU measures the "functionally unemployed," defined as the
jobless plus those seeking, but unable to find, full-time
employment paying above poverty wages (pegged at $25,000 a year in 2024
dollars) after adjusting for inflation. While the April TRU
remained unchanged at 24.2% — meaning nearly one-fourth of the
workforce is either unemployed, working for poverty wages, or
involuntarily part-time — Black workers saw substantial gains, with
functional unemployment dropping 2.3 percentage points, from 28% to
25.7%.
These gains, when combined with a slight uptick in functional
unemployment among White workers (0.2 percentage points, from 22.7%
to 22.9%), have narrowed the racial functional employment gap to
2.8 percentage points, the narrowest gap since April 2023 (2.4 percentage points; Black TRU
24.8%; White TRU 22.4%).
"The April report offers some encouraging signs, despite the
lack of overall improvement in functional unemployment," said LISEP
Chairman Gene Ludwig. "A level TRU
indicates that employment and wages are at least keeping up with
inflation. While progress has been made, we must continue working
to close the inequality gap."
The April report presents a complex picture for Hispanic
workers. The Hispanic labor force participation rate rose by 0.5
percentage points, indicating more Hispanics are entering the
workforce. However, the TRU for Hispanic workers also increased
(0.4 percentage points, from 28.3% to 28.7%). This suggests
Hispanic workers joining the workforce were largely unsuccessful in
finding functional employment or displaced other
functionally-employed workers within the demographic.
The TRU for men showed positive signs, decreasing by a full
percentage point, from 20.1% to 19.1%, while the TRU for women rose
0.6 percentage points, from 28.8% to 29.5%. This increase, when
combined with the decline for men, further contributed to a
widening gender gap — currently at 10.4 percentage points.
"The persistence of a high functional unemployment rate and the
stagnant progress toward a more equitable economy is alarming,
particularly for certain demographics," Ludwig said. "If we are to
close the inequality gap for middle- and low-income families, we
must prioritize opportunity creation and work toward shared
prosperity."
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 2020.
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 https://www.lisep.org/tru.
About LISEP
The Ludwig Institute for Shared Economic
Prosperity (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. LISEP's
original economic research includes new indicators for
unemployment, earnings, and cost of living. These metrics aim to
provide policymakers and the public with a more transparent view of
the economic situation of all Americans, particularly low- and
middle-income households, compared with misleading headline
statistics.
About Gene Ludwig
In
addition to his role as LISEP chair, Gene
Ludwig is a managing partner of Canapi LLC, a financial
technology venture fund. He is the founder and CEO of Ludwig
Advisors, which counsels financial firms on critical matters.
Ludwig is also the founder of the Promontory family of companies.
He 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. On
X (formerlyTwitter): @geneludwig.
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SOURCE Ludwig Institute for Shared Economic Prosperity