May 19, 2024 - Business

"True" unemployment for Twin Cities is around 19%: Report

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 Twin Cities residents struggled last year to land a job paying a living wage, a new think-tank report estimates.

Why it matters: Unemployment in the metro has steadily recovered since the pandemic, but a more nuanced look at our workforce data shows a larger share of individuals who can't find a good 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.

By the numbers: The institute's latest analysis, released in early May, put the 2023 "true" unemployment rate in the Twin Cities at 19%.

Yes, but: The metro's "true" jobless rate is better than the national average of 23% and good enough to rank our region among the best in the country for livable jobs.

What they're saying: The Twin Cities' performance "confirms what we already know: that Minnesota has a strong economy [with] lots and lots of opportunities available for people in living-wage jobs," Cameron Macht, a labor market information manager with the state Department of Employment and Economic Development (DEED), told Axios.

Driving the data: Minnesota is home to a diverse economy with plenty of opportunities in sectors that experienced post-pandemic growth, such as health care, manufacturing and construction, he said.

  • A high concentration of corporate headquarters and companies that fall into the "professional and technical services" category — both typically high-paying sectors — also helps.

Between the lines: The "true" unemployment rate tends to track — but also be much higher than — the headline BLS jobless rate.

  • That's because the BLS rate excludes people who might be earning only a few dollars a week; Ludwig Institute, by contrast, counts as unemployed anybody earning less than $25,000 per year.
  • BLS, unlike LISEP, also excludes anyone who has stopped looking for work.

Keep reading: Where the living-wage jobs are (and aren't)

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