'Functional Unemployment' inches upward in April, Says Ludwig Institute

WASHINGTON, May 15, 2025 -- Even though the official government jobless rate shows unemployment has remained steady, the latest report from the Ludwig Institute for Shared Economic Prosperity (LISEP) indicates an increase in functional unemployment, with a rate that has topped 24% for three consecutive months.

LISEP's April True Rate of Unemployment (TRU) report—a measure of the functionally unemployed, defined as the jobless plus those seeking, but unable to find, full-time employment, and those in poverty-wage jobs—increased from 24% to 24.3%, while the official Bureau of Labor Statistics rate remained unchanged at 4.2%. The functional unemployment rate has remained at 24% or higher since February.

"We are facing a job market where nearly one-in-four workers are functionally unemployed, and current trends show little sign of improvement," said LISEP Chair Gene Ludwig. "The harsh reality is that far too many Americans are still struggling to make ends meet, and absent an influx of dependable, good-paying jobs, the economic opportunity gap will widen."

The TRU for Black workers rose 1.4 percentage points to 26.7%, while the rate for White workers decreased slightly, from 23.1% to 23%. The rate for Hispanic workers also rose slightly, from 28.1% to 28.2%.

By gender, the TRU for men increased 1.2 percentage points, to 20%, while the rate for women declined 0.8 percentage points, to 28.6%. This resulted in a slight narrowing of the three-month gender gap, from 9.6% to 9.5%.

"Amid an already uncertain economic outlook, the rise in functional unemployment is a concerning development," Ludwig said. "This uncertainty comes at a price, and unfortunately, the low- and middle-income wage earners ultimately end up paying the bill. The public would be well served by a commitment from economic policymakers to adopt a stable course of action, based on real-world metrics, that better serves the interests of working Americans."

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 most recent TRU and supporting data are available on the LISEP website at https://www.lisep.org/tru.

About LISEP

The Ludwig Institute for Shared Economic Prosperity (LISEP) was created in 2019 by 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 a managing partner of 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 also the founder of the Promontory family of companies. He 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. His forthcoming book, The Mismeasurement of America, will be published in September 2025 and is available for pre-order wherever books are sold. On X: @geneludwig.

SOURCE Ludwig Institute for Shared Economic Prosperity