Research Shows 1 In 4 Workers Is ‘Functionally Unemployed’ — ‘Far Too Many Americans Are Still Struggling To Make Ends Meet’
Simply having a job doesn't mean what it used to.
PeopleImages.com - Yuri A | Shutterstock The unemployment rate has been consistently low for so long relative to historical precedent that it can be hard to understand why so many people are struggling. Exorbitant and rising prices on everything certainly don't help, but new research shows there's a far bigger problem.
Being employed simply doesn't mean what it used to, and it's putting ever more people in financial desperation. In a nutshell, people who are working are struggling so much to simply get by that they are effectively unemployed because their paychecks cannot sustain them.
Research shows 1 in 4 workers is 'functionally unemployed.'
In April, the most recently available data showed that the U.S. unemployment rate was just 4.2%, among the lowest ever recorded in the past 50 years. Which is odd, right? Does the American economy appear to be doing THAT well? Do YOU know anyone outside the millionaire class who isn't struggling to make ends meet, if they even have a job at all?
Meanwhile, other economic measures, like America's plummeting consumer confidence, bear out this rather dismal situation. So, what gives? Well, in a word, a little thing called "underemployment." That is, nearly all of us have a job, or maybe even several. But, they aren't remotely providing us enough to live on.
The official unemployment rate doesn't account for underemployment or poverty wages.
The problem with our government's employment rate statistics, which are compiled by the Bureau of Labor Statistics, is with the way it defines "employed." If you have a job, you are considered employed, and hence reflective of the unemployment rate.
But that is, of course, not how things work anymore, and it hasn't been for ages. Do you do DoorDash deliveries 5 hours a week for a pittance? The BLS counts you as employed. Work four part-time jobs trying to scrape together a living? You're counted as employed. Are you homeless but hold down a part-time job at a fast-food place? The BLS counts you as employed. Yes, literally.
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Independent economic organizations like the Ludwig Institute for Shared Economic Prosperity measure employment differently, taking into account pesky nuances like "Does your employment actually sustain your costs of living?"
They take into account people who are employed part-time because they're unable to find full-time work, or those who are employed full-time in poverty-wage jobs. Their results will probably shock no one trying to get by these days.
The data shows the true unemployment rate is actually at Depression-era levels, and has been for quite some time.
Yes, you read that right. LISEP's measures found that the number of Americans who are "functionally unemployed" — holding down at least one job but unable to survive — is staggering, and that when employment is measured in this more realistic way, the actual unemployment rate is a shocking 24.3%, up .3% from March 2025. That's just .6% away from the all-time high of 24.9% in 1933, the height of the Great Depression.
And this is actually nothing new. In February, it was reported that LISEP's unemployment rate in November of 2024 — the month of the presidential election — was actually 23.7%. Meanwhile, the Biden Administration and then the Harris campaign spent the better part of two years basically telling voters "The economy is good, actually!" while the media bloviated about how delusional Americans were to be angry about it.
That presidential election was, according to polling, lost by Harris largely on the basis of voters' economic anger, a fact that still to this day sparks consternation among liberals. But, it turns out, that the voters were right, and taking a gaslighting approach is a really bad presidential campaign strategy. Who knew?
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But those who would cite all this as vindication for electing Donald Trump should rapidly pump their brakes. This catastrophic functional unemployment rate has only risen since he took office, which experts attribute partly to the economic chaos his policies have created. And not only do many Republicans say Trump's so-called "Big Beautiful Bill" is likely to worsen the economy, but many on Wall Street seem convinced it will, over time, collapse it.
Regardless, it's a damning view of an economy that politicians of both parties seem to take turns taking credit and blaming each other for, leaving the struggling American people feeling gaslit about the fact that a $50 bag of groceries five years ago now costs $100, and the average rent has soared nearly 66% in the past 10 years and nearly 35% since 2020. Or even worse, feeling like it's their own fault they can't get a job.
The simple fact is we are, in all the ways that matter, in a depression, let alone a recession. And LISEP chairman Gene Ludwig said this disparity is likely to only make things worse. "If you say there's 4.2% unemployment, which makes political folks happy because it's a low number, it causes all kinds of poor policy decisions and assumes we are better off than we are," he told CBS News.
There's a very real political opportunity here to face reality and do something to fix it. The problem is, with extremely few exceptions, nobody in Washington seems interested in doing so.
John Sundholm is a writer, editor, and video personality with 20 years of experience in media and entertainment. He covers culture, mental health, and human interest topics.
