US 'Functional Unemployment' Hits Post-Pandemic High at 25.2%
A growing segment of the American workforce faces employment conditions that fall short of providing economic stability, according to new research highlighting structural challenges in the world's largest economy.The Ludwig Institute for Shared Economic Prosperity (LISEP) reports that 25.2% of US workers are now classified as "functionally unemployed," marking the highest level since June 2021. This category encompasses individuals who are jobless, seeking but unable to secure full-time employment, or earning poverty-level wages despite being employed.The figure represents an increase from 24.8% in November, suggesting deteriorating conditions in what LISEP terms the "True Rate of Unemployment" (TRU) - an alternative metric that accounts for underemployment and wage adequacy."The share of workers who are functionally unemployed has risen over the past year and returned to post-pandemic highs, pointing to ongoing challenges in access to full-time, living-wage employment," said LISEP Chair Gene Ludwig.This assessment contrasts sharply with official Bureau of Labor Statistics data, which shows unemployment at 4.4% following the addition of 50,000 jobs in December. The disparity underscores ongoing debates about measuring economic health in an era of gig work and wage stagnation.Demographic analysis reveals persistent inequalities within the labor market. Functional unemployment rates reached 29.6% for Black workers and 28.5% for Hispanic workers in December, compared to 23.2% for white workers. Women face higher rates at 30.3% versus 20.5% for men.The research methodology, while disputed by some economists, raises questions about employment quality versus quantity - a distinction with significant implications for economic policy and social stability in the United States.Labor market forecasters anticipate continued challenges through 2026, with sluggish hiring and elevated job cut announcements expected to persist, potentially affecting broader economic growth and consumer spending patterns.Source: Newsweek analysis of LISEP employment data
