New quarterly index ranks the labor markets of the 150 largest U.S. metropolitan areas
Provo-Orem, Utah, a metro 40 miles south of Salt Lake City with about 600,000 residents, has one of the lowest unemployment rates in the country. Led by a booming tech sector, its employment has grown 16 percent since 2010, and a good percentage of its new jobs pay more than $16.60 an hour, the metro’s living wage. For these reasons and others, Provo-Orem is ranked as the No. 1 labor market in the inaugural Labor Market 150 Index, presented by CareerBuilder and Economic Modeling Specialists Intl.
The quarterly index is comprised of several historical and leading indicators that measure the overall dynamism and balance of the labor markets in the 150 largest U.S. metropolitan areas. Employment levels, unemployment rates, job listings growth, and the abundance of high-paying new jobs are all important factors.
Aided by a strong recovery from the recession and significant job growth from its energy and manufacturing sectors, the Houston, Texas metro area ranks second. STEM — Science, technology, engineering and math — and knowledge employment growth are key factors in state capitals Raleigh, North Carolina (No. 3) and Salt Lake City, Utah (No. 4) receiving high positions. The Fayetteville-Springdale, Arkansas metro area, home to both the University of Arkansas and headquarters of Wal-Mart, rounds out the top five with its low unemployment rate and robust post-recession recovery.
Labor Market 150 Index variables are weighted separately and arranged into four groups in the table below.
- Using EMSI’s proprietary data set, Employment Rank includes total-industry job growth rates pre-and-post-recession, as well as projected growth rates from 2014 to 2020.
- Quality Employment Rank includes job growth rates among each metro’s key driver industries over the same time frames, as well as the share of new jobs created since 2010 with median hourly earnings at or above the metro’s living wage for two adults and one child, as determined by the MIT Living Wage Calculator.
- Job Postings Growth captures the change in the number of unique online listings from May 2014 to October 2014, and along with each metro’s Unemployment Rate, provides the index’s best look at current market situations.
The presence of industries reliant on STEM and knowledge jobs is a running theme throughout the top section of the index. Tech hubs Austin, Texas (No. 6), San Francisco-Oakland, California (No. 14), San Jose-Sunnyvale, California (No. 15), and Seattle, Washington (No. 16) all finished inside the top 20. Des Moines, Iowa (No. 20) continues to grow its already large insurance sector and has maintained a low unemployment rate throughout the post-recession years.
The country’s largest markets posted mixed results. The New York City-Newark metro (No. 90) showed modest employment growth in recent years, but that story could be flipping, as its unique job postings growth rate is ranked No. 9 in the country. At 2 percent, Los Angeles, California (No. 87) posted above-average employment growth in 2014, but is held back by an unemployment rate above 7 percent. Chicago, Illinois (No. 120) – the nation’s third-largest market – has an improving unemployment rate, but job growth remains anemic. Dallas-Fort Worth, Texas (No. 33) – the nation’s fourth-largest market – is lifted by its 10th-place mark in the Employment Ranking category. Boston, Massachusetts (No. 34) is the highest-ranked major market on the Eastern Seaboard. Washington, D.C. is ranked 97.
Palm Bay-Melbourne-Titusville, Florida is ranked 150. Other notable metros in the back quarter of the index include New Orleans, Louisiana (No. 144), Albuquerque, New Mexico (No. 128), Milwaukee, Wisconsin (No. 121), and Memphis, Tennessee (No. 118).
The index aims to value balance as much as possible. For instance, Reading, Pennsylvania is ranked 129th in Employment Ranking, but fourth in Quality Employment Ranking, due in large part to the fact 66 percent of its new jobs pay at or above the area’s living wage. Combining that with its low unemployment rate, Reading is ranked 25th overall. Additionally, with the inclusion of Job Postings Growth, the index offers a look at potential future labor market conditions. Houston and Seattle, for instance, both have high overall rankings, but have seen a significant slowdown in new job listings recently. They are ranked 134th and 148th in that category, respectively.
Newhaven-Milford, Connecticut (No. 35) is ranked No. 1 in job listings growth, supported by high activity among several IT and health care occupations. Providence-Warwick, Rhode Island-Massachusetts (No. 62) falls into the No. 2 spot, with notable increases in certain management, finance, and sales occupations.