Ludwig Institute for Shared Economic Prosperity

Why do official economic numbers often feel so out of touch with reality? LISEP chair Gene Ludwig recently tackled this question during his conversation with NPR’s Scott Simon, explaining how traditional metrics fail to capture the challenges faced by low- and middle-income Americans. He points out that while headlines celebrate low unemployment and easing inflation, these figures don't tell the whole story. Gene stressed that real economic health is about more than just statistics. It's about whether Americans can afford the essentials and have a chance to prosper. Listen to the full conversation to understand how some government statistics get the economy wrong and why it’s critical to have metrics that reflect real-world conditions.

LISEP Chair Gene Ludwig recently sat down with Anna Helhoski to discuss why traditional economic data may not accurately reflect the financial struggles of middle- and low-income Americans. In their conversation, the two reflected on how the consequences of headline unemployment statistics overlook underemployment, why inflation feels worse for lower-income earners, and the need for better economic measurement tools. Listen to the full podcast here: https://lnkd.in/gUMSqNGk

The February edition of The Ludwig Report explores the disconnect between public sentiment and official economic statistics. We delve into issues like misleading election-year data and the latest True Rate of Unemployment metric, offering insights into how we measure economic health.

LISEP’s latest True Rate of Unemployment (TRU) report shows a slight improvement in "functional unemployment" in January, dropping from 23.7% to 23.3%—while the official rate from the U.S. Bureau of Labor Statistics remains low at 4.0%. More on TRU: https://www.lisep.org/tru

The official unemployment rate hides a harsh reality: millions of Americans are working but still functionally unemployed. LISEP's True Rate of Unemployment (TRU) offers a clearer picture, counting those who want full-time work but can't get it—or earn less than $25,000 a year. When accounting for this, the overall TRU was 23.7% in December, meaning that a fifth of workers are functionally unemployed despite having a job. The TRU also reveals striking disparities in employment outcomes across demographic groups. For example, the TRU for men was 18.9%, while for women, it was 29.3%. More on the True Rate of Unemployment: lisep.org/tru

Has strong GDP growth since the 1990s translated into a better life for most Americans? The data suggests otherwise. As reported by David Leonhardt, the U.S. economy has grown faster than any other high-income country since the 1990s, yet ranks at the bottom for life expectancy, youth mental health, and trust in government. LISEP's "Unmasking GDP" white paper explores why GDP growth alone is an insufficient measure of economic success. Learn more about LISEP’s work: https://lnkd.in/gJENj2RP

Are traditional economic indicators telling the full story? Ahead of the 2024 election, many believed the economy was thriving—but the data may not have reflected reality for most Americans. In POLITICO, LISEP chair Gene Ludwig explains how official employment, wages, and inflation metrics often present an overly-optimistic view—overlooking the economic struggles facing most Americans. Accurate data is essential for sound policy. Read more to understand why rethinking these measures is crucial for policymakers and the public. https://lnkd.in/g9-8qq62

New data reported by the The Washington Post shows that 5.3% of U.S. workers now hold more than one job, a level not seen since the Great Recession. LISEP research confirms the informal economy primarily serves as an outlet for the struggling working- and middle classes unable to secure well-paying jobs in the formal job market. Many are turning to informal work to stay afloat, sacrificing sleep, family time, and even their health. This is not solely a matter of a "strong labor market"—wages are not keeping up with the true cost of living. Workers find themselves taking a second, or even third, job when full-time jobs don’t pay enough to cover basic necessities. More on the Informal Economy: https://lnkd.in/ezzttc_h More from the Washington Post: https://lnkd.in/g7K_xeFb

The "No Buy 2025" movement, as reported by The Wall Street Journal is more than a financial challenge—it’s a response to rising living costs and economic uncertainty. Participants are cutting nonessential spending to manage debt and build financial security. LISEP’s True Living Cost (TLC) Index reported a 9.4% increase in the cost of basic needs in 2023—more than double the 4.1% rise reported by the Consumer Price Index. Unlike the CPI, the TLC tracks the change in prices for the goods and services essential for low- and moderate-income Americans. This stark difference underscores the very real pressures forcing individuals to make difficult choices about their spending, highlighting the disconnect between official inflation figures and the lived experiences of many Americans. Read more: lisep.org/tlc https://lnkd.in/gTsswih8

The Q4 2024 True Weekly Earnings report shows wages are up overall, but not for everyone. While median earnings grew 1.6% to $1,005 in Q4, this gain masked a loss for those below the median. Weekly wages for workers at the 25th percentile saw a 0.7% decline to $613. The 75th percentile saw a 0.3% improvement, from $1,648 to $1,652, but those at the top (90th percentile) experienced a 2.1% drop, to $2,577. Wage growth was also uneven across demographic groups, with gains for Black (+4.9%) and White (+1.6%) workers contrasted by near-stagnant wages for Hispanic workers (-0.1%). This uneven growth contributes to the persistent wage gap: Black workers earn 77￠ and Hispanic workers 71￠ on the dollar compared to White workers. Read the latest on TWE: www.lisep.org/twe