WE always seeing the figures put out by the government on employment, jobs created, and so forth…..but are those numbers just a mask for what is really happening?
A low unemployment rate typically signals that an economy is generally healthy. The unemployment rate in the U.S. remained near a 50-year-low in April 2025 at 4.2% — plus, American employers added 177,000 jobs in April despite the uncertainty of Trump’s tariffs and trade wars.
This all sounds good, right? Not so fast.
The “true” rate of unemployment in April, according to the Ludwig Institute for Shared Economic Prosperity (LISEP), was 24.3%, up 0.03% from the previous month. LISEP’s True Rate of Unemployment (TRU) includes the unemployed, as well as workers who are employed but still struggling.
“We are facing a job market where nearly one-in-four workers are functionally unemployed, and current trends show little sign of improvement,” said LISEP Chair Gene Ludwig in a statement published on PR Newswire.
“The harsh reality is that far too many Americans are still struggling to make ends meet, and absent an influx of dependable, good-paying jobs, the economic opportunity gap will widen.”
That could help explain why, despite the supposedly healthy employment rate, consumer confidence in the American economy has been plunging.
So, why is there a 20-point difference between the LISEP and Bureau of Labor Statistics (BLS) unemployment numbers? The BLS collects a massive amount of data on unemployment, but some of that data is excluded from the official unemployment rate.
For example, BLS found that 5.7 million people who aren’t employed do, in fact, want a job — but they weren’t counted as unemployed because “they were not actively looking for work during the four weeks preceding the survey or were unavailable to take a job,” according to BLS.
LISEP uses data compiled by BLS, but instead of simply measuring unemployment, LISEP measures what it calls the “functionally unemployed.” This is defined as the portion of the U.S. labor force that “does not have a full-time job (35+ hours a week) but wants one, has no job, or does not earn a living wage, conservatively pegged at $25,000 annually before taxes.”
Its metrics capture not only unemployed workers, but also those stuck in poverty-wage jobs and those working part-time but can’t get full-time work. LISEP’s measurements aim to include these functionally unemployed Americans to provide a more complete picture of unemployment across the country, including the nuances that other economic indicators miss.
This, in turn, can help “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,” according to LISEP.
“Amid an already uncertain economic outlook, the rise in functional unemployment is a concerning development,” Ludwig said. “This uncertainty comes at a price, and unfortunately, the low- and middle-income wage earners ultimately end up paying the bill.”
Ludwig says the public would be “well served by a commitment from economic policymakers to adopt a stable course of action” based on real-world metrics.
(moneywise.com)
We also are hearing how well the economy is doing….but all that is smoke and mirrors as well….as any person can tell you that has to shop that their wallet does not see this ‘bright’ economy.
Just thought you might like to know….
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“lego ergo scribo”
The issue I have with stating ‘good’ employment figures (whether US or UK) is that so many of the jobs are in the ‘Black Economy’ or ‘Gig Economy’. Delivering food for App companies, driving cabs for Uber, working for yourself delivering parcels for Amazon and other courier companies, so many of these jobs have zero-hours contracts, no rights or benefits to the employee, and no sick pay or holiday pay. That means a large employment sector that is completely fragile, and could easily collapse.
Best wishes, Pete.
Yeah that is why here they use what they call “contract labor”…no benefits….and this state is a right to work state and that means low pay…..it is indeed fragile. chuq
that’s a very good thing to point out. A lot of people overlook the fact that a lot of these positions aren’t really jobs at all in the traditional sense. The “employee” is considered to be self employed, a contractor, not an employee of the company they actually work for. That means that here in the US they get no medical insurance, no workman’s compensation if they get injured on the job, no sick leave, no employer contributions to their social security retirement fund accounts, no overtime protections… I used to have my own business back in the day, a one person consulting service. Technically I was employed as far as the government was concerned but there were a lot of weeks when I was between clients and had no income at all.. My annual cash flow didn’t look horrible but in reality I wasn’t making even close to minimum wage.
Nothing is looking right in this failing democracy and nothing will ever look right again as power nerds manipulate facts and figures to fit their own agendas.
So true….but the rosy picture the news paints is not a reality for a normal person. chuq