Statement From LISEP Chair Gene Ludwig on Funding for BLS

October 3, 2024

For Immediate Release

Sound economic policy, like a good weather forecast, relies on timely, comprehensive data. But unlike an errant weather forecast—which might lead to minor inconveniences like a wardrobe mismatch or getting caught in the rain without an umbrella—inaccurate economic data could result in policy that means the difference between prosperity and recession.

With this in mind, a group of 141 civil society organizations and businesses, along with two former U.S. Bureau of Labor Statistics (BLS) commissioners, recently signed a letter to the House and Senate Appropriations Committee chairs urging additional funding for the Current Population Survey (CPS), which is sponsored jointly by the BLS and U.S. Census Bureau. This additional $20.6 million in funding would support the modernization of data collection to measure the monthly unemployment rate and other labor market activity—action that is long overdue.

The importance of the accuracy and completeness of these data cannot be overstated. While the BLS excels at collecting reams of data from across the nation, data collection itself can be a challenge—as demonstrated last month, when monthly payroll figures overstated job growth by 818,000 for the 12 months ended in March. Drilling down to the granular level takes time and initially relies on preliminary estimates—which are subject to revision after the collection of the hard data. In this case, the downward revision of nearly 28% (68,000 jobs a month) could have had an impact on the formulation of appropriate economic policy in the interim. This delayed indicator of stagnating job growth may have very well postponed the recent interest rate reduction by the Federal Reserve.

At the Ludwig Institute for Shared Economic Prosperity, we advocate for the inclusion of more-responsive and real-world-reflective metrics as yardsticks for measuring economic performance, such as our True Rate of Unemployment (TRU), a measure of the “functionally unemployed”—defined as the jobless plus those seeking, but unable to find, full-time employment paying above poverty wages ($25,000 a year in 2024 dollars) after adjusting for inflation. During the period subject to the job-creation shortfall (March 2024), the TRU gradually ramped up following March 2023, from 23.4% to 24.2% a year later. This could have served as an early warning sign of a softening labor market.

Undoubtedly the BLS and Census Bureau need the tools and resources to continue the phenomenal work they have performed for decades, and that means the modernization of its data collection—and I would encourage this to include the adoption of alternative metrics, such as the TRU, as a complement to existing measures of the labor market. I join the 141 letter signatories in urging Congress to approve a funding increase for the Current Population Survey.

Statement From LISEP Chair Gene Ludwig on Funding for BLS

‍Jim Gardner

October 3, 2024

For Immediate Release

Additional Resources

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:

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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.