A worker at Martin Guitar in Nazareth.

About 85% of the Lehigh Valley labor force is “functionally employed,” ranking the region ninth best in the nation, according to a new analysis.

The Ludwig Institute for Shared Economic Prosperity, which developed the metric to provide policy makers with deeper insight into the economy, defines functionally employed as workers earning at least $20,000 annually and working full-time unless they choose to work part-time.

The finding supports the vision of the Lehigh Valley Economic Development Corp. (LVEDC) to build partnerships that provide opportunity for people of all skill and education levels.

“The Lehigh Valley’s manufacturing renaissance is creating more opportunities for family-sustaining employment,” said Don Cunningham, President and CEO of LVEDC. “The region’s prime location, located within a day’s drive of one-third of the U.S. population, and its skilled workforce are attractive to employers in many sectors including life sciences research and food and beverage production.”

The analysis, which was published April 26, aims to tell a more complete story than standard government unemployment data provides.

Those who are working only part-time while they are searching for a full-time job, or are earning less than $20,000, aren’t functionally employed, the Ludwig Institute for Shared Economic Prosperity says, because they still are looking for a better position or are at a job that is not financially supporting.

Lehigh Valley’s functional unemployment rate in 2022 using that metric was 15.3%. Pennsylvania’s rate was 22.4%. New Jersey was 21.3% and New York 23.6%. The U.S. rate was 22.5% at the end of the year.

It’s not surprising the Lehigh Valley scored well, considering how well it has performed recently in other data.

The area is a growth spot for Pennsylvania, adding 7,316 people between 2020 and 2022. And the economy has been humming. At 362,000, the Lehigh Valley’s labor force has grown at a rate nine times faster than Pennsylvania’s as a whole over the last five years.

The Lehigh Valley produced a record $47 billion Gross Domestic Product in 2021. Manufacturing leads the way in the region’s diverse, balanced economy. With an output of $8.4 billion, the region ranks in the top 15% of regional markets in the United States. Manufacturing jobs, which are rising at a rate five times faster than the nation as a whole, are fueled by programs at the Lehigh Valley’s colleges and universities and three career and technical schools.

LVEDC collaborates with educational institutions to develop curriculum and expand opportunities such as internships. It partners with corporations on talent retention strategies, helping to produce the skilled workforce companies need to succeed.

The mission of the Ludwig Institute for Shared Economic Prosperity is to improve the economic well-being of middle- and lower-income Americans through research and education. It was founded in 2019 by Gene Ludwig, who served as Comptroller of the Currency under President Bill Clinton.

The institute calculates the “true rate of unemployment”  for the nation, states, and the 100 most-populous regions. To do so, it analyzes micro-level census data.

The lowest true rate of unemployment in the nation last year was in the Palm Bay-Melbourne-Titusville region on Florida’s Space Coast, at 11.1%. The highest was the McAllen-Edinburg-Mission region in south Texas, at 46.8%

“The huge disparity among these regional statistics — where 90 percent of workers are in living wage jobs in one region, and another where nearly half are functionally unemployed — tells a strong, compelling story,” Ludwig said. “We are not a single, national economy where a one-size-fits-all economic policy will have uniform, positive results. It is important for policymakers to be aware of these disparities and take a deeper dive into these data to understand what is working – and perhaps more importantly, what is not – when making decisions that may disproportionately impact one region over another.”

The analysis uses Census Bureau definitions of metro regions, so the data for the Lehigh Valley include Carbon County and Warren County, N.J.