Number of the Day Shows Different Take on Unemployment
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That's the 'true’ U.S. unemployment rate if the unemployed, part-time workers, and those making less than a living wage are factored in, according to a new methodology from one economic think tank.
This measure, released this week by the Ludwig Institute for Shared Economic Prosperity, is more than three times the official 7.9% unemployment rate released by the U.S. Bureau of Labor Statistics. That commonly reported number, the “U3 unemployment rate,” measures people who are looking for work but don’t have jobs.
“While this measure may be elegant in its simplicity, it presents a very incomplete and, in many ways, misleading picture,” said a white paper by the LISEP, which was founded by economist Gene Ludwig. “This concept of true employment – the number of Americans with full-time jobs with earnings above the poverty level – gives us a better understanding of the economic circumstances relevant to the majority of Americans.”
The LISEP statistic was calculated using the same survey data that the BLS uses to report the U-3 rate, but includes workers who have no job, those who do not earn a living wage (pegged at $20,000 a year) or who are working part-time but want a full-time job.
Ludwig Institute for Shared Economic Prosperity. "Measuring Better: Development of ‘True Rate of Unemployment’ Data as the Basis for Social and Economic Policy." Accessed Oct. 14, 2020.