Overall median weekly earnings increase, but more workers are without living-wage jobs
WASHINGTON, Jan. 18, 2024 /PRNewswire/ — American workers saw an increase in median earnings for Q4 2023, which was somewhat tempered by an increase in the percentage of workers unable to secure full-time, living-wage jobs, according to a report by Ludwig Institute for Shared Economic Prosperity (LISEP).
LISEP issued its monthly True Rate of Unemployment (TRU) for December in conjunction with the fourth quarter 2023 True Weekly Earnings (TWE) report. TRU is a measure of the “functionally unemployed” — the jobless, plus those seeking but unable to secure full-time employment paying above the poverty line. TWE is a measure of median weekly earnings after adjusting for inflation for all members of the workforce, including the part time and jobless who are seeking work. By comparison, the BLS headline numbers only include those who are employed at full-time jobs.
American workers saw an increase in median earnings for Q4 2023, which was tempered by a decrease in living-wage jobs.
The overall TWE increased $5 a week, from $960 to $965. This is the fourth consecutive quarter of increases in median earnings, with the TWE up 1.8% since Q1 2023. According to LISEP, the Q4 increase in TWE is likely due to a strong October and November. December’s level of functional unemployment, as measured by the TRU, jumped 0.5 percentage points, from 22.4% to 22.9%.
“At first glance, it is encouraging to see an overall increase in median earnings, but a closer look reveals that wages for the lowest paid workers are actually falling. This, combined with the reduction in living-wage jobs, is a troubling trend,” said LISEP Chairman Gene Ludwig, noting that when analyzing workers by income levels, low-income earners (25th percentile) saw a decrease from $605 to $598 a week. “Even among those with slightly-higher wages, this means little when you are struggling to get above the poverty line. When you’re 20 feet underwater, a glimmer of light isn’t the same as breaking the surface.”
Among racial and ethnic demographics, Black workers saw a 3% TWE increase (from $797 to $821 a week), with White workers posting a 1.2% increase ($1,061 to $1,074). The TWE for Hispanic workers decreased 0.8%, from $773 to $766.
From the jobs perspective, the percentage of living-wage jobs was down for December, with LISEP’s TRU rising half a percentage point, from 22.4% to 22.9%. All racial and ethnic demographic groups saw increases in functional unemployment, with the TRU for Hispanic workers rising slower than other groups, increasing from 26.4% to 26.5%. The TRU for Black workers increased from 25.2% to 26%, while the TRU for White workers rose 0.4 percentage points, from 21.1% to 21.5%. The TRU for women in the workforce climbed from 26.8% to 28%, while men saw a notable improvement, dropping from 18.4% to 17.7%.
“This month’s numbers certainly tell a story, which very well may be a tale of two economies,” Ludwig said. “A deep dive into the numbers show that even when headline statistics are seemingly rosy, lower income families still struggle to make ends meet. Add to this a lack of growth in living-wage jobs, and it is understandable that a large swath of the population is skeptical regarding the strength of the economy.”
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 TRU rate and supporting data are available on the LISEP website at https://www.lisep.org/tru.
About TWE
LISEP issues the TWE quarterly following the release of the BLS Median Weekly Earnings report. The full white paper, “Understanding the Status of American Workers Through Analysis of Current Population Data,” can be viewed here. The TWE rate and supporting data are available on the LISEP website at https://www.lisep.org/twe.
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.
About Gene Ludwig
In addition to his role as LISEP chair, Gene Ludwig is founder of the Promontory family of companies and 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 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. On Twitter: @geneludwig.
SOURCE Ludwig Institute for Shared Economic Prosperity
