According to the U.S. Bureau of Labor Statistics, unemployment rates have not shifted much in recent years. The current unemployment rate is reported as being 4.2%just a slight increase from the 4% it hovered around between 2022 and 2024. But according to a new report, another measure of unemployment is much higher, and steadily growing.
The April report, which comes from the Ludwig Institute for Shared Economic Prosperity (LISEP), a nonprofit that produces original economic research, documents what it calls the “true rate” of unemployment. That rate refers to “functional unemployment,” which takes into account those who are job-seeking yet unable to find work, as well as those with full-time jobs but whose earnings put them below the poverty line (under $25,000/year).
The functional unemployment rate has risen for three consecutive months and is currently 24.4%. That means about one in four U.S. adults are considered functionally unemployed.
LISEP Chair Gene Ludwig said in a press release that the outlook on the trend shows “little signs of improvement” amid lack of an influx of dependable, good-paying jobs.” The report showed the functional unemployment rate rising 1.4% among Black workers to 26.7%. It decreased slightly for white workers, moving from 23.1% to 23%. While the rate for men increased (by 1.2%) bringing the total to 20%, women narrowed the gender gap. Women’s true unemployment rate dipped 0.8 percentage points to 28.6%.
While it’s no secret that the federal government has been steadily shedding jobs, there haven’t been major increases in the unemployment rate. However, the new findings paint a grim picture of how many U.S. workers are struggling to find employment and a livable income. Meanwhile, wage increases haven’t kept up with a rising cost of living, not to mention the cost to raise a child, which has ticked up 25% in the past two years alone.
Amid an already uncertain economic outlook, the rise in functional unemployment is a concerning development,” Ludwig explains. “This uncertainty comes at a price, and unfortunately, the low- and middle-income wage earners ultimately end up paying the bill.
