The Real U.S. Unemployment Rate was 24% in March

Unemployment in March was reported by the U.S. government at just 4.2%. But the Ludwig Institute for Shared Economic Prosperity (LISEP) publishes a common sense economic statistics that measures the “functionally unemployed” rate that LISEP calculated was 24% in March.

Gene Ludwig served as the 27^th U.S. Controller of the Currency from 1993 to 1998. As an economist and a Yale trained lawyer, Ludwig was the editor of ‘The Vanishing American Dream’, a book that examined how traditional U.S. economic statistics have been revised to mask the crisis faced by millions of middle-income and lower families.

The basic U.S. Bureau of Labor Statistics (BLS) definition of unemployment has remained the same since the 1940s as “individuals who don't have a job, actively seek work in the past four weeks, and are currently available for work.”

Ludwig criticized the monthly survey question: “What percent of the people that are currently seeking jobs are unsuccessful?” He lobbied for the BLS to include discouraged workers who have given up looking for jobs, and part-time workers that want full-time employment. But such a massive increase would have been political suicide for Washington legislators on both the Left and the Right.

Ludwig since 2019 has produced the True Rate of Unemployment (TRU) that adds back the measures of discouraged workers and involuntary part-time workers. But he also adds individuals working for poverty wages, which he estimates at $25,000 or less.

When the Ludwig Institute for Shared Economic Prosperity (LISEP) graphed the BLS Headline rate and TRU rate, the difference has been consistent for the last 30 years.