In a listing of the economic vitality of 206 large U.S. metropolitan areas, the Memphis MSA economic vitality is next to last at #205, according to the highly-respected Best-Performing Cities Index by the Milken Institute.

When the Milken Institute ranks Memphis near the bottom in economic vitality among large metros, it is not simply saying the city has a poverty problem or a crime problem. It is saying something more fundamental and more troubling: Memphis is underperforming economically compared to its peers across multiple indicators that determine whether a metropolitan area is creating broad-based prosperity.

It is a reason for alarm.  It is also reason for an honest conversation about our region’s troubling economic performance.

Last year, the Memphis MSA ranked #196 and in 2024, it was ranked #175. We hoped things could not get worse.  They have.

Just four years ago, Memphis MSA was ranked #128.  That was the best it had ranked in 10 years.  Back in 2012, the region broke into the top 100 at #99, but there has been little good news since then. 

Hitting Bottom

Milken Institute considers the Memphis MSA as a Tier 5 region, which means it ranks in the bottom 20% of all large cities in the country.

Here are the yearly rankings since 2011:

#205 – 2026
#196 – 2025                                    #175 – 2024                                    #135 – 2023
#128 – 2022                                    #166 – 2021                                    #152 – 2020
#145 – 2018                                    #148 – 2017                                    #149 – 2016
#182 – 2015                                    #145 – 2014                                    #150 – 2013
#99 – 2012                                       #191 – 2011

Unlike many other rankings that heavily weigh subjective “quality-of-life” surveys, the Milken Institute uses a quantitative, outcomes-based methodology.   The Milken Institute is a well-known, nonpartisan economic think tank, making its reports a standard benchmarking tool for economists, policymakers, and business leaders.

Mayors and city planners use the index to diagnose their local economy’s strengths and weaknesses, often celebrating high ranks to attract new businesses or addressing vulnerabilities highlighted by a drop in the list.

What is especially disturbing here is that Memphis is the worst performing MSA in Tennessee.  Nashville is #19, Knoxville is #33, Clarksville is #67, Chattanooga is #62, and Jackson is #113.

Breaking It Down

Because the index focuses strictly on economic and labor market metrics, it is designed to measure economic vitality, not necessarily overall happiness or lifestyle.  It does not factor in metrics like climate, culture, and recreational opportunities.

The Milken rankings are based on 13 measures, including:

  • job growth
  • wage growth
  • high-tech industry growth
  • access to economic opportunity
  • housing affordability
  • broadband access
  • income inequality
  • community resilience

In addition to the overall ranking, the Milken Index also provides rankings for the individual components of the index, offering meaningful insights for city officials seeking to examine the underlying factors driving their metropolitan areas’ performance.  

Here are the MSA’s rankings in the components:

#156 – job growth 2019-24

#187 – job growth 2023-24

#125 – wage growth 2019-24

#163 – wage growth 2023-24

#187 – short-term job growth

#83 – high-tech GDP 2019-24

#133 – high-tech GDP 2023-24

#185 – high-tech concentration rate

# 152 – LQ Count

#158 – broadband access

#147 – housing affordability

#191 – resilient households

#196 – Gini Index

Explaining the Calculations

The ranking is frustrating, considering that the Memphis MSA falls below #205 in every category. 

Here’s Milken’s explanation: It does not take the mathematical average of a city’s 13 component ranks to find the final score. Instead, they score a city’s absolute raw performance in each metric (e.g., actual percentage points of wage growth), multiply that raw score by the category weight, and then rank the final aggregated scores. Even if Memphis’s raw economic growth remains stagnant or drops slightly, its rank will plummet if dozens of other cities experience sudden surges in high-tech GDP or wage growth.

The ranking is entirely relative, so a city can decline in standing even if its local metrics haven’t materially worsened in a vacuum. Memphis frequently underperforms in high-tech concentration and income equality. Because Milken heavily weights job growth and technology output, a severe deficit in the tech sector pulls the composite score down significantly, outweighing moderate or high scores in factors like housing affordability.

In other words, the index is trying to answer a core question: Is this metro building an economy that is dynamic, innovative, resilient, and capable of improving living standards over time?

If Memphis is near the bottom, the warning is not about one bad year. It suggests structural weakness.

Stuck in Time

One of the clearest implications is that the region is not producing enough jobs in industries that drive modern metropolitan growth – sectors like advanced technology, engineering, research, biosciences, finance, and high-end professional services.

Memphis has world-class logistics assets because of FedEx, the river, railroads, and interstate connections. But logistics-heavy economies can create a ceiling problem. Warehousing and distribution create jobs, but many are lower-wage and vulnerable to automation.

Cities rising in the Milken rankings tend to have diversified economies with strong innovation sectors. They combine job growth with research institutions, engineering talent, technology ecosystems, and higher wages.

Memphis has not yet built enough of that kind of economy.

A low ranking also suggests that many workers are not seeing substantial income gains.

This matters because stagnant wages create cascading problems – population loss, brain drain, lower tax revenues, weaker neighborhoods, declining confidence, and difficulty attracting talent.

If Memphis cannot compete on economic opportunity, it risks becoming a place that exports talent rather than attracts it.  That is already part of the civic anxiety in Memphis. Too many college graduates leave because they perceive limited upward mobility.

The Danger of Normalizing Underperformance

Memphis has long struggled with concentrated poverty and geographic disparities. Parts of the metro function like a prosperous Sunbelt city, while others experience conditions closer to persistent rural poverty.

A city can have pockets of success and still rank poorly overall if prosperity is not widely shared.

That distinction matters because Memphis often points to billion-dollar projects, tourism investments, logistics expansions, and corporate announcements but rankings like this ask a tougher question: Are those investments transforming the overall economic trajectory of the metro?

Apparently, the answer is not enough.

One danger in Memphis civic culture is normalization of underperformance. Rankings showing weak economic performance often produce shrugs rather than urgency.

Waiting for Leaders

Some skepticism about rankings is fair. No index captures everything. Even online discussions about Milken rankings often debate about methodology and weighting systems.

But when multiple national measures repeatedly show weak economic performance, population loss, low incomes, and limited upward mobility and access to opportunity, the larger pattern becomes hard to dismiss.

The issue is not whether Memphis is doomed. The issue is whether leadership fully grasps the scale of the challenge.

The real danger is not the ranking itself.  The real danger would be if Memphis sees a near-bottom ranking in economic vitality and still decides incrementalism is good enough.

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