Nearly 25% of American workers are now considered functionally unemployed, according to the May True Rate of Unemployment (TRU) report from the Ludwig Institute for Shared Economic Prosperity. The rate rose to 24.3%, up from 24.2% in April, marking a continued start on full-time, living-wage employment.
However, the official Bureau of Labor Statistics unemployment rate remained flat at 4.2%, underscoring the growing gap between traditional job metrics and actual workforce conditions. LISEP’s TRU metric includes the unemployed, underemployed, and those working full-time in poverty-wage positions.
“Wages aren’t keeping up with the rising cost of living, and the shrinking availability of living-wage jobs is compounding the strain. The consequences for working families are becoming increasingly severe,” said LISEP Chair Gene Ludwig.
The report noted mixed outcomes across demographics. Black and Hispanic workers saw modest improvements, with TRU falling to 26% and 27%, respectively. However, white workers experienced an increase to 23.6% and women saw their TRU jump 1.3 points to 29.9%, widening the gender gap once again to 10 percentage points. In contrast, the rate for men dropped 19.3%
The TRU has remained above 24% since February, a level not seen consistently since the pandemic’s economic fallout. Analysts say this trend signals growing inequality in the labor market and deeper structural issues affecting low-and middle-income workers.
“Identifying trends is key in determining the direction of the economy, and unfortunately, for low and middle-income workers, the trends are not encouraging,” said Ludwig.
For Funds Society, Madrid