May 21, 2024 - News

One in five Indy residents don't earn a living wage

A bar chart showing the U.S. metro areas with the highest and lowest True Rate of Unemployment in 2023. The measure shows the share of the U.S. labor force that is functionally unemployed (seeking but unable to find a full-time job, is unemployed or is employed in a position earning less than a living wage).
Note: Share of the U.S. labor force that is functionally unemployed (seeking but unable to find a full-time job, is unemployed or is employed in a position earning less than a living wage); Data: Ludwig Institute for Shared Economic Prosperity; Chart: Axios Visuals

One in five Indianapolis residents spent last year struggling to earn a living wage, a new think-tank report estimates.

Why it matters: The unemployment picture in Indianapolis has improved since the pandemic, but a more nuanced look at Central Indiana's workforce data reveals a larger chunk of individuals who can't find a living wage job.

The big picture: The Ludwig Institute for Shared Economic Prosperity's True Rate of Unemployment measures the proportion of workers seeking, but unable to find, a full-time job paying not just any wage, but a living wage.

Between the lines: The true unemployment rate tends to track — but also be much higher than — the headline Bureau of Labor Statistics unemployment rate, which excludes anybody who has stopped looking for work and those discouraged by a lack of jobs or the demands of child care.

  • The BLS rate also excludes people who might be earning only a few dollars a week; LISEP, by contrast, counts anybody earning less than $25,000 per year as unemployed.

By the numbers: Indianapolis' true unemployment rate last year was 20%, compared with its official rate of just 3%, according to the analysis.

  • Indy's true unemployment rate is 3 percentage points lower than the national rate of 23%.
  • But it is higher than that of many major metros, including the Twin Cities (19%), San Jose (18%) and Denver (16%), which ranked as the national leader for living-wage jobs.

The intrigue: Lafayette had the third lowest true unemployment rate (14%) among all the U.S. metros tracked by the institute, compared with its official rate of 2.9%.

Reality check: Even $25,000 is hardly enough to be considered a living wage.

  • The living wage in Lafayette for an adult with no children is $19.61 per hour — or about $41,000 a year if working 40 hours a week — according to MIT's living wage calculator. For two working adults with two children, it's $24.25 per hour or about $50,000.

State of play: The most recent BLS data shows workers in the Lafayette-West Lafayette metro had an average hourly wage of $26.73, or nearly $56,000, as of May 2023.

What they're saying: "Local communities investing in infrastructure, housing and future-oriented industries consistently outperform those more reliant on low-wage jobs," says LISEP founder Gene Ludwig.

The bottom line: There are plenty of good jobs in America — but they're not evenly distributed.

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