Despite overall improvements, black workers experience lower wages and a higher rate of functional unemployment. Washington, October 22 (Reuters/ PR Newswire ) – According to Ludwig Institute for Shared Economic Prosperity ( LISEP ), the rate of functional unemployment fell slightly for the second consecutive month in September, and the actual median weekly wage also improved slightly in the third quarter. However, black workers' wages decreased, and the rate of functional unemployment rose.

LISEP released the reports for September True Rate, of, Unemployment ( TRU ), and the third quarter of 2026 True Weekly Earnings ( TWE ). TRU measures the population of "functional unemployment" – that is, unemployed individuals, those working part-time involuntarily, or those receiving poverty-level wages (defined as an annual income of less than $26,000 in 2025 dollars). TWE measures the inflation-adjusted median weekly wage of the entire labor force, including part-time workers as well as unemployed individuals who are actively looking for work.

Overall, after adjusting for inflation, TWE rose by 0.6% from the second quarter to the third quarter, from $1,035 to $1,041, but the change is not significant compared to a year ago. In contrast, the median income indicator from the U.S. Bureau of Labor Statistics ( BLS ) – which only includes full-time workers – shows a weekly wage of $1,232, which is 1.5% lower than the $1,251 reported a year ago. This difference mainly reflects the income trend of part-time workers; such trends may differ from those of full-time workers, but they are not reflected in the headline indicators of BLS.

TWE has shown improvement both on a month-over-month and year-over-year basis among the low-income group (the 25th percentile), rising by 1.3% to $643 in the third quarter, which is a 1% increase from a year ago. The incomes of the 75th and 90th percentiles have decreased. The weekly salary of the 75th percentile fell by 0.5% month-over-month and by 2.1% year-over-year to $1,735. The weekly salary of the 90th percentile decreased by 1.9% year-over-year to $2,723.

Divided by demographic groups, the median weekly salary of black workers increased by 0.5% year-over-year, but decreased by 0.6% to $866 compared to the previous quarter. Hispanic workers saw a strong wage increase in the third quarter, rising by 1.7% to $868, with a year-over-year increase of 3.4%. The incomes of white and Asian workers both declined over the past year. Asian workers' weekly salaries decreased by 1.8% month-over-month and by 2.2% year-over-year to $1,352. White workers' weekly salaries rose by 0.7% to $1,177 in the third quarter, but were still 0.9% lower than the same period last year.

In the third quarter, the gender pay gap narrowed somewhat, with men's TWE dropping by 0.7% to $1,175, while women's income increased by 1.5% to $934. Currently, for every $1 that women earn, men earn 80 cents.

LISEP Chairman Gene Ludwig stated: "The wage increases we have seen this quarter may help some workers return to levels roughly comparable to those of a year ago, but that doesn't necessarily mean their situation has improved. Of course, the cost of living has not stopped rising, and for too many Americans, making ends meet remains a real challenge. What we need to see is not just an improvement over one or two quarters; what we need are wages that allow more Americans to move forward, rather than just barely keeping up."

In September, the measure of structural unemployment also showed signs of improvement, declining for the second consecutive month after several months of pressure on the labor market. TRU It dropped by 0.3 percentage points to 24%, reversing most of the increase seen earlier this year, but it is still higher than the 23.6% rate in March.

Divided by demographic groups, the TRU of black workers increased significantly by 2.9 percentage points to 30.1%, reaching the highest level since July 2021. This increase is also reflected in the headline unemployment rate of BLS, which rose by a full percentage point from 6% to 7%. Meanwhile, the TRU of Hispanic workers decreased by 1.7 percentage points to 25.5%, falling 3.4 percentage points from the peak of 28.9% in May 2026. The TRU of white workers decreased by 0.9 percentage points to 23.1%, marking the first decline after four consecutive months of increase from May to August.

The female functional unemployment rate decreased by 0.7 percentage points to 28.8%, while the male rate increased by 0.2 percentage points to 19.8%.

Gene Ludwig said, "What these numbers remind us of is that there is no single experience in the U.S. labor market. We see improvements in both the overall unemployment rate and wages, but the situation can vary greatly depending on one's position within the workforce. The income trends of full-time and part-time workers are a good example of this. This is also why it's important to go beyond the headline figures to understand the real situation of different groups of workers."

About TWE

LISEP releases the TWE on a quarterly basis after the release of the mid-week salary report in BLS. The full white paper "Understanding the Situation of American Workers through Analysis of Current Population Data" can be viewed here. TWE ratios and supporting data can be obtained at the LISEP website https :// www.lisep.org / twe.

About LISEP

Ludwig Institute for Shared Economic Prosperity ( LISEP ) was founded in 2019 by Ludwig and his wife, Dr. Carol Ludwig. The mission of LISEP is to improve the economic well-being of low- and middle-income individuals in the United States through research and education. LISEP's original economic research includes new indicators for unemployment, income, and living costs. These indicators are designed to provide policymakers and the public with a more transparent view of the economic situation of all Americans, especially low- and middle-income families, which is often obscured by misleading headline statistics. X account: @LISEP_org.

About Gene Ludwig

In addition to serving as the chairman of LISEP, Gene Ludwig is also the managing partner of Canapi LLC, a fintech venture capital fund. He is also the founder and CEO of Ludwig Advisors, providing critical advisory services to financial institutions. Ludwig is also the founder of the Promontory series of companies. He has previously served as the vice chairman and senior control officer of Bankers Trust New York Corp, and from 1993 to 1998, he held the position of Chairman of the Federal Reserve Board of Governors. He is also the author of the book The Vanishing American Dream, which examines the economic challenges faced by low- and middle-income Americans. His new book, The Mismeasurement of America, was published in September 2025 and is currently available for purchase online or at major bookstores. X account: @geneludwig.