Percentage of Living-Wage Jobs Rises in February, But Gender Gap Grows

‘Functional unemployment’ increases for Latino workers, women

March 22, 2023

For Immediate Release

WASHINGTON, D.C. — The overall percentage of workers with living-wage jobs improved for the month of February, but the gap between men and women grew by two full percentage points, according to the monthly True Rate of Unemployment (TRU) report issued by the Ludwig Institute for Shared Economic Prosperity (LISEP).

LISEP’s overall TRU dropped from 23.1% to 22.9% from January to February, an indication that more workers are finding full-time, living-wage jobs. TRU tracks the “functionally unemployed,” defined by LISEP as the jobless, plus those seeking, but unable to find, full-time employment paying above the poverty line after adjusting for inflation. By contrast, the U.S. Bureau of Labor Statistics (BLS) reported an increase in the official jobless rate, from 3.4% to 3.6%.

Black workers saw a significant improvement in living-wage employment, with the TRU dropping from 26.1% to 24.6%, while the TRU for White workers improved marginally, from 21.7% to 21.6%. The rate for Latino workers, however, jumped 1.8 percentage points — from 26.8% to 28.6%.

Meanwhile, the significant disparity between men and women in the workforce continues to grow, with the TRU for men dropping 1.1 percentage points (from 18.6% to 17.5%), while the TRU for women jumped nearly a full percentage point, from 28.0% to 28.9%. This could be due, in part, to strong growth in construction — a male dominated industry – while the share of women in the retail and leisure industries declined.

“It is certainly encouraging to see that overall, middle- and lower-income workers are holding their own even in the face of inflationary pressures, yet the growing inability of certain groups to keep up — particularly a widening gender gap – indicates that not everyone is sharing equally,” said LISEP Chairman Gene Ludwig. “Becoming aware of these inequalities, and implementing measures to address them, should be a top priority for policymakers.”

Historically, systemic barriers have disproportionately hampered Black farmers’ ability to retain land ownership.

Despite this tragic history, there is still time and economic incentive to set some of the inequities right.

In 2021, working mothers with children under 18 earned just 61.7 cents for every dollar a father made. Much wider than the overall gender wage gap, this difference highlights both the motherhood penalty and the fatherhood premium.

Female-dominated, low-paying, part-time occupations are overrepresented among informal workers who also have a formal job.

We need to create an economic environment where companies can hire these workers as employees and pay them a living wage. There are steps policymakers can take to change the gig economy dynamic.

Dependency on tips over base pay is growing because of actions taken by gig companies to institute tipping.

Even for those lucky enough to be making what amounts in many states to the poverty wage of $15 per hour, many will get nothing but a week’s notice before being out on the street.

One study shows that consistent involvement in extracurricular activities increased a child’s likelihood of attending college by a whopping 400% compared to not being involved at all.

Studies have found that both men and women are paid less if they work in “nurturant” occupations.

Since 2015, the correlation between LISEP’s functional employment to population ratio and the inflation rate was more than four times as strong as the BLS’s employment to population ratio, which is depicted in the graph below.

The employment to population ratio settles the discrepancy between what we see around us and what the data says.

The NBER paper defines employment using the traditional BLS U-3 rate. However, the often-used U-3 number fails to capture the quality of jobs.

Among states with stricter COVID-19 policies, reducing unemployment benefits had little to no effect. The average effect of increased employment seems to have occurred only in those states with looser COVID protocols.

Press Contact:

‍Jim Gardner

press@lisep.org

(573) 680-1822

Additional Resources:

TRU Summary

TRU White Paper

TRU & TWE Methodology

TRU & TWE Source Data

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 lisep.org/tru.

About LISEP

The Ludwig Institute for Shared Economic Prosperity (LISEP) was created in 2019 by Gene 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. On X: @LISEP_org.

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 the founder and CEO of Ludwig Advisors, which counsels financial firms on critical matters. 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. On Twitter: @geneludwig.

Please Note:

The Ludwig Institute for Shared Economic Prosperity continuously revises and updates its data. As a result, data presented in this release may no longer reflect the latest estimates. Find the most current data at lisep.org.