A recent report from the Ludwig Institute for Shared Economic Prosperity (LISEP) has revealed that approximately 24.8 percent of the American workforce is classified as 'functionally unemployed' as of November. This category includes individuals who are jobless, those seeking but unable to find full-time employment, and workers earning 'poverty wages,' defined as an annual income of $26,000 or less. The report notes a slight decrease of 0.1 percent in the 'True Rate of Employment' (TRU) since September, but an increase of 0.7 percent over the past year.

The LISEP argues that its measurement of functional unemployment provides a more comprehensive view of employment conditions compared to government figures, which they describe as potentially misleading. The latest employment report from the Bureau of Labor Statistics (BLS) indicated that the U.S. economy added 64,000 jobs in November, with the unemployment rate rising to 4.6 percent, the highest since September 2021. LISEP's findings suggest a significant discrepancy between the official unemployment rate and their functional unemployment rate, which accounts for those unable to secure full-time work and those earning below the poverty threshold.

Demographically, the TRU is notably higher among Black and Hispanic workers, at 28.1 percent and 27 percent, respectively, compared to 23.3 percent for White workers. Additionally, the TRU for women has increased to 30.1 percent, while it has slightly decreased for men to 20.2 percent.

Experts have raised questions about the methodology used by LISEP, with some suggesting that the BLS provides a more nuanced understanding of labor market conditions through various metrics. However, LISEP Chair Gene Ludwig emphasized that both their figures and those from the BLS highlight a labor market that has become increasingly challenging for many households, particularly in light of stagnant wages and rising costs of living.

The employment landscape has shown sluggish growth, with a significant number of layoffs reported. According to the outplacement firm Challenger, Gray & Christmas, U.S. employers announced 71,321 job cuts in November, marking a 24 percent increase year-over-year and bringing the total for 2025 to nearly 1.2 million, the highest since 2020. The Department of Labor is expected to release its employment report for December on January 9, with predictions indicating another slow month for hiring and a potential rise in the unemployment rate to 4.7 percent.