Lower-income workers experienced worsening conditions both quarter-over-quarter and year-over-year, while the gender gap for jobs earning above poverty wages continues to widen, according to a new report from the Ludwig Institute for Shared Economic Prosperity (LISEP).

LISEP issued its monthly True Rate of Unemployment (TRU) for March in conjunction with the Q1 2025 True Weekly Earnings (TWE) report. TRU is a measure of the "functionally unemployed" —defined as the jobless plus those seeking, but unable to find, full-time employment paying above poverty wages ($25,000 a year in 2024 dollars). TWE is a measure of median weekly earnings (adjusted for inflation) for all members of the workforce, including part-time workers and the unemployed seeking work. By comparison, the Bureau of Labor Statistics (BLS) headline numbers only include those employed at full-time jobs.

Despite an annual increase of 2.4%, the first quarter saw TWE decline by 1.4%, from $1,014 to $1,000 a week (in contrast, the BLS median wage for full-time workers fell only 0.8%, from $1,203 to $1,194). However, the picture is starkly different when analyzed by income distribution. The top earners saw gains in Q1, with the 75th percentile up 0.5% ($8/week to $1,676) and the 90th percentile rising significantly by 2.8% ($73 to $2,675). In contrast, the 25th percentile experienced a 1.5% drop, falling from $619 to $610 per week.

This divergence is further emphasized year-over-year: The lowest earners (25th percentile) saw a 0.3% decline, while the 75th and 90th percentiles enjoyed increases of 2.2% and 3.6%, respectively. This trend marks a continuation of the reversal of wage gains for low-income earners observed after the tighter labor market of 2022.

By demographic, Black workers saw a 2.2% decline in Q1, to $859 a week, while Hispanic workers saw a 0.7% decline, to $797. White workers saw a decline of 1.4%, to $1,121, with Asian workers seeing a 4% increase, to $1,276. Men saw a 2.5% drop in weekly earnings, to $1,129, while women saw a 0.7% decline, to $894. Median wages for all demographic groups increased year-over-year.

"Despite a modest annual wage increase, growing income inequality remains a serious concern—particularly as wage growth continues to lag behind the rising cost of living," said LISEP Chair Gene Ludwig. "This widening gap not only signals limited improvement for lower-income earners, but also threatens the stability of the middle class, whose economic position is increasingly at risk."

LISEP's March TRU report shows functional unemployment improving by 0.6 percentage points to 24%, a partial recovery from the 1.3 percentage point spike in February. The TRU for Black workers fell 0.7 percentage points to 25.3%, although a drop in workforce participation contributed to the decrease. The rate for Hispanic workers remained unchanged at 28.1%, while the rate for White workers fell 0.1 percentage points, to 23.1%.

The TRU for men rebounded from February, improving 1.4 percentage points to 18.8%, while the rate for women rose 0.2 percentage points, to 29.5%. Consequently, the three-month average gender gap now stands at 9.6 percentage points—up 1 percentage point from December.

"Even when top-line metrics look positive, a closer look at the data reveal ongoing challenges for many Americans," said Ludwig. "Significant segments of the population are still being left behind, and in some cases, losing ground. These numbers should serve as a call for thoughtful, inclusive policymaking that ensures economic progress is broadly shared."