Amidst declining faith in mainstream economic indicators, alarming insights emerge about the “true rate” of unemployment—that 1 in 4 Americans is functionally unemployed.
See the tweet below!
This reality paints a grim picture far removed from official statistics and underscores a failing allegiance to American workers.
With traditional descriptors of unemployment leaning on optimism, a deeper crisis of economic disparity looms.
Researchers from the Ludwig Institute for Shared Economic Prosperity (LISEP) have raised the alarm about the labor market’s troubling state.
While government statistics show an unemployment rate of 4.2% in April, the institute’s findings indicate a startling true unemployment rate of 24.3%.
The discrepancy suggests severely underreported challenges facing millions of Americans.
The traditional method by which unemployment is measured may contribute to these discrepancies.
Official data counts individuals as employed if they worked at least one hour within two weeks.
This metric glosses over the struggles of Americans reliant on poverty-level wages, as well as those unable to secure full-time employment.
The harsh reality revealed by LISEP indicates that 25% of the American workforce remains functionally unemployed, unable to secure living-wage jobs.
Gene Ludwig, chair of LISEP, highlights this as a dire warning for the nation and calls for changes in economic policy.
He notes that absent systemic reform, the economic opportunity gap will continue to widen.
“Amid an already uncertain economic outlook, the rise in functional unemployment is a concerning development. This uncertainty comes at a price, and unfortunately, the low- and middle-income wage earners ultimately end up paying the bill,” Ludwig said, cited by ABC 6.
Racial disparities further complicate the challenge. While the True Rate of Unemployment (TRU) among white workers slightly decreased to 23%, it increased for black and Hispanic workers to 26.7% and 28.2%, respectively.
Gender differences also remain, with men’s TRU rising slightly to 20%, while for women, it decreased to 28.6%.
The economic narrative must shift from celebrating low unemployment rates to addressing these underlying realities.
With average earnings stagnating around $38,000, significantly below the $67,000 needed for basic life upkeep, many Americans face economic despair unnoticed by standard metrics.
These revelations should prompt policymakers to reevaluate employment statistics and adopt metrics that reflect the labor market’s true state.
The aim should be inclusivity in policy-making, ensuring that working-class Americans are not left behind. Addressing these economic divides is essential for fostering genuine prosperity.
New research shows 1 in 4 Americans are 'functionally unemployed': https://t.co/fGmQ6yw16x pic.twitter.com/OR8F9QikXF
— Local 12/WKRC-TV (@Local12) May 26, 2025
