May 7, 2024 - News

Phoenix's true 2023 unemployment rate was about 22%

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

Phoenix's true unemployment rate last year was 21.9%, compared with its official rate of 3.5%, according to a study from the Ludwig Institute for Shared Economic Prosperity (LISEP).

Why it matters: Phoenix has enjoyed a rosy unemployment picture in the past few years, but a more nuanced look at the region's workforce data reveals a larger chunk of individuals who can't find a living wage job.

How it works: The think tank's proprietary system — its True Rate of Unemployment — measures the proportion of workers looking for and unable to find a full-time job that pays more than $25,000 per year.

Between the lines: The true rate tends to be much higher than the U.S. Bureau of Labor Statistics (BLS) rate.

  • That's because LISEP counts as unemployed anybody earning less than $25,000 per year, a group BLS excludes.
  • BLS, unlike LISEP, also excludes anybody who has stopped looking for work or is discouraged by a lack of jobs or the demands of child care.

Zoom out: Phoenix's true unemployment rate is about 1 percentage point lower than the national rate but is higher than that of many major metros, including Denver (16%), San Jose (18%), Washington (18%) and Minneapolis (19%).

What we're watching: Seven companies reported layoffs totaling 1,979 Arizona-based jobs last month, up from just 267 position cuts in April 2023, the Arizona Republic reported.

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