One in five Indy residents don't earn a living wage
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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%.
- Boiler Country can add the accolade to other community wins it has collected in recent years, including being named a top emerging housing market in 2023 and a top city for remote workers in 2022.
- Low unemployment and strong job creation were also among the reasons Lafayette was honored as community of the year by the Indiana Chamber of Commerce in 2021.
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.