Last year, while Phoenix’s official unemployment rate sat at 3.5%, a study by the Ludwig Institute for Shared Economic Prosperity (LISEP) revealed a different story. Their research uncovered a true unemployment rate of 21.9% for the region. This matters because it shows that despite appearances, many people in Phoenix struggle to find jobs that pay enough to live on.
LISEP has a unique way of measuring unemployment called the True Rate of Unemployment. They look at how many people are seeking full-time jobs that pay at least $25,000 per year but can’t find them. This method often reveals higher unemployment rates compared to the numbers reported by the U.S. Bureau of Labor Statistics (BLS).
The BLS doesn’t count people who earn less than $25,000 per year as unemployed, nor does it include those who have given up looking for work due to discouragement or other reasons. This means that the BLS rate might not show the full picture of joblessness in a region like Phoenix.
When we zoom out, we see that Phoenix’s true unemployment rate is higher than the national average and higher than many other big cities like Denver, San Jose, Washington, and Minneapolis.
Recently, Arizona’s job market saw an increase in layoffs, with nearly 2,000 jobs lost in just one month. This trend reflects broader issues of inequality within the U.S. A dataset from LISEP highlights the contrast between booming cities with low unemployment rates and areas with lots of low-paying jobs, such as El Paso, Fresno, and New Orleans.
LISEP’s True Rate of Unemployment reveals a nationwide rate of 24.2%, significantly higher than what the BLS reports. This is because LISEP includes people earning less than $25,000 per year and those who have given up on finding work.
While some wealthy towns have low unemployment rates, others, especially those reliant on low-wage jobs, suffer from high unemployment. In Laredo, Texas, for example, over half of the population is unemployed according to LISEP’s measure.
According to Gene Ludwig, the founder of LISEP, communities that invest in infrastructure, housing, and industries with future prospects tend to have lower unemployment rates.
In conclusion, the disparity in unemployment rates across different regions highlights the uneven distribution of good jobs in America. Understanding the true unemployment rate provides valuable insights for policymakers and communities seeking to address economic challenges.
