24.9% of Americans 'Functionally Unemployed': Study

Everything we see tells us most (meaning over half) of all American workers are financially squeezed, and that squeeze is one reason why bev/al sales are far lower that any bev/al marketer would like. Not the only reason, to be sure, but one reason.

When we ran across a study claiming the true rate of functional unemployment in July was 24.9% – not the official 4.1% – we had to learn more.

That 24.9% number comes from the Ludwig Institute for Shared Economic Prosperity (LISEP) and is the "True Rate of Unemployment (TRU) — a combination of the traditional unemployed and the “functionally unemployed,” defined as the jobless, involuntarily part-time, and those earning a poverty wage," or less than $25,000. 

Supporters, led by LISEP chair Gene Ludwig, argue that official statistics mask financial distress by counting low-paying, marginal, or involuntary part-time work as equal to a secure career. They believe TRU provides a more realistic view of middle- and lower-income financial security, explaining why consumer dissatisfaction persists despite low headline unemployment.

Mainstream economists aren't convinced. They say TRU overstates distress because blending joblessness with low wages confounds distinct economic problems. They also say an effective unemployment rate of 24.9% doesn't correlate with broader macroeconomic indicators, spending data, or general market behavior across the U.S. economy.

The Ludwig Institute also says the True Living Cost of basic necessities for low- and middle-income Americans rose 4.4%, not the government's CPI of 3%, and the true weekly earnings of the median American worker is $1,033, not the government's official $1,251.

Is this a numbeer we should pay attention to? I don't know. But it may help explain why bev/al sales remain unusually week in what we are told is the best of all possible worlds.