Madison Ranked as Best Metro Area for ‘Functional Employment’ by Ludwig Institute

Functional unemployment rates for McAllen, El Paso, TX, among the nation’s highest

June 25, 2025

For Immediate Release

WASHINGTON, D.C. — The Madison, WI, metro area has been ranked as the nation's leader in functional employment, according to a new analysis from the Ludwig Institute for Shared Economic Prosperity (LISEP). Driven by robust job growth, higher wages, and the ability to secure desired hours, Madison's performance contrasts sharply with two Texas markets that recorded among the highest "functional unemployment" rates in the nation.

LISEP today released its 2024 True Rate of Unemployment (TRU) by Metropolitan Statistical Area (MSA) analysis — an in-depth study of the TRU for the nation’s 100 most populous MSAs. TRU tracks the “functionally unemployed,” defined by LISEP as the jobless, those seeking but unable to find full-time employment, or those earning poverty-level wages (pegged at $25,000 a year after adjusting for inflation). LISEP’s MSA analysis considers both the TRU, which looks at the labor force, and the more-comprehensive TRU Out of the Population (TRU OOP), which assesses the entire working-age (16+) population to indicate overall labor-market strength.

With the nation’s second-lowest TRU at 16.1% — a 7.8 percentage point improvement over last year and the best among all metros — the Madison, WI MSA featured growth in higher-paying education and health-services jobs and serves as a biotech hub. Professional, scientific, and technical services jobs grew 2.4% in 2024 and have increased 18.5% since 2019. The region also had the nation’s lowest TRU OOP (36.3%), reflecting Madison’s high labor force participation rate and ultimately earning the top ranking.

Other MSAs leading the nation with low functional unemployment rates are Nashville-Davidson-Murfreesboro-Franklin, TN ranking second, followed by Washington-Arlington-Alexandria, DC-VA-MD-WV; San Jose-Sunnyvale-Santa Clara, CA; Raleigh-Cary, NC; Des Moines-West Des Moines, IA; Seattle-Tacoma-Bellevue, WA; Boston-Cambridge-Newton, MA-NH; Denver-Aurora-Lakewood, CO; and Phoenix-Mesa-Chandler, AZ.

In spite of a 2.1 percentage improvement over last year’s survey, the McAllen-Edinburg-Mission, TX, MSA remains at the bottom of the list with the nation’s highest TRU at 45.9%. LISEP’s analysis notes that hourly wages in the McAllen region are lower than the national average in every major occupational group, with a high jobless rate and high involuntary part-time employment. McAllen's TRU, at 45.9%—90% more than the 24.2% national TRU average — highlights the prevalence of poverty-wage jobs.

The El Paso MSA posted the second-highest functional unemployment rate among the 100 largest metro regions at 33.4%, a 1.4 percentage point increase over last year. Combined with the 13th highest TRU OOP (57.6%), El Paso ranked among the lowest for its share of jobs held paying above poverty-level wages. Among wage and salaried workers, El Paso recorded the second-highest share of full-time workers earning poverty wages across all studied metro areas, just behind the McAllen MSA. The region’s average hourly wage in December 2024 was more than 30% less than the state’s average hourly wage.

The remaining MSAs with the nation’s top ten highest functional unemployment rates include Tucson, AZ; Bakersfield, CA; New Orleans-Metairie, LA; Lakeland-Winter Haven, FL; Deltona-Daytona Beach-Ormond Beach, FL; Oxnard-Thousand Oaks-Ventura, CA; Spokane-Spokane Valley, WA; and Syracuse, NY.

"The TRU by MSA analysis is vital for understanding regional economic distinctions," said LISEP Chairman Gene Ludwig. "It provides an unvarnished look at the realities for low- and middle-income families across localities, moving beyond anecdotal impressions to highlight exactly where regions are thriving or struggling."

A full breakdown of the True Rate of Unemployment by Metropolitan Statistical Area is available at www.lisep.org/local.

Madison Ranked as Best Metro Area for ‘Functional Employment’ by Ludwig Institute

Functional unemployment rates for McAllen, El Paso, TX, among the nation’s highest

‍Jim Gardner

June 25, 2025

For Immediate Release

Additional Resources

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A full breakdown of the True Rate of Unemployment by Metropolitan Statistical Area is available at www.lisep.org/local.

Press Contact:

‍Jim Gardner

press@lisep.org

(573) 680-1822

Additional Resources:

TRU White Paper

TRU & TWE Methodology

TRU & TWE Source Data

TRU Local Source Data

About TRU

LISEP issued the white paper Measuring Better: Development of “True Rate of Unemployment” Data as the Basis for Social and Economic Policy upon announcing the new statistical measure in October 2020. The paper and methodology can be viewed here. LISEP issues TRU one to two weeks following the release of the BLS unemployment report, which occurs on the first Friday of each month. The TRU rate and supporting data are available on the LISEP website at lisep.org/tru.

About LISEP

The Ludwig Institute for Shared Economic Prosperity (LISEP) was created in 2019 by Gene Ludwig and his wife, Dr. Carol Ludwig. The mission of LISEP is to improve the economic well-being of middle- and lower-income Americans through research and education. LISEP’s original economic research includes new indicators for unemployment, earnings, and cost of living. These metrics aim to provide policymakers and the public with a more transparent view of the economic situation of all Americans, particularly low- and middle-income households, compared with misleading headline statistics. On X: @LISEP_org.

About Gene Ludwig

In addition to his role as LISEP chair, Gene Ludwig is the founder of the Promontory family of companies and Canapi LLC, a financial technology venture fund. He is the founder and CEO of Ludwig Advisors, which counsels financial firms on critical matters. Ludwig is the former vice chairman and senior control officer of Bankers Trust New York Corp. and served as the U.S. Comptroller of the Currency from 1993 to 1998. He is also the author of the book The Vanishing American Dream, which investigates the economic challenges facing low- and middle-income Americans. His forthcoming book, The Mismeasurement of America, will be published in September 2025 and is available for pre-order wherever books are sold. On X: @geneludwig

Please Note:

The Ludwig Institute for Shared Economic Prosperity continuously revises and updates its data. As a result, data presented in this release may no longer reflect the latest estimates. Find the most current data at lisep.org.