Share of New Jobs in the High-Wage Category, 2009–13
Energy production and knowledge economies. These are the two pillars of America’s post-crisis economic recovery, Richard Florida argues in a new, in-depth magazine piece that features comprehensive metro labor market data and analysis from EMSI.
Writing in the October issue of The Atlantic, Florida hones in on three measures — the composition of job growth (high-wage, mid-wage, and low-wage), productivity growth, and venture-capital funding — to pinpoint America’s new boom towns, as well as those that are lagging behind. The metros that have performed the best in those metrics fall in two camps — centers of knowledge and ideas, and clusters of energy production.
Cities that combine both strengths, like Houston, are in a position to flourish. Using EMSI data, Florida points out that Houston has more than a third of the nation’s petroleum engineers (nearly 13,700 out of 40,800) and the largest concentration of geoscientists (more than nine times the national average). But it also has a bustling IT sector, as we hit on last week.
From 2009 to 2012, Houston added 30,000 jobs in a mix of industries related to oil and gas extraction and scientific and technical consulting services. These pay an average salary of $124,000. Houston has also seen rapid growth in software-development jobs (16 percent) and information-technology jobs (12 percent), along with consistent growth in its medicine-and-health-care sector.
Opinions vary on just how long the shale boom will last—especially in specific localities. And while energy metros have generated jobs, my analysis of all U.S. metros finds that in general, energy economies are not notable for high-wage-job growth. Nonetheless, the fracking boom illustrates how energy and technology are combining. Unlike some oil booms of the past, which turned on the discovery of new oil fields, we’ve known about these shale deposits for a long time. It was new technology that made exploiting them possible. Much has been made of the so-called resource curse—the syndrome whereby countries that are endowed with an abundance of natural resources get lazy, rest on their inherited riches, and fail to invest in the kinds of research, education, and innovation that are key to long-run development. That’s not what has happened in the United States. America’s leading energy hubs prosper not just because of the stuff they pump out of the ground, but because of their ability to combine resources with technology and knowledge.
Not all job growth is created equal, so Florida used EMSI data to find the winners and losers in the high-wage category ($21 per hour and above). As the above map shows and Florida mentions, San Jose has had the largest share of new high-wage jobs since 2009 (63%), followed by Washington, D.C. (59%) and San Francisco (44%).
Outside knowledge and energy hubs, “the economy remains troubled and weak,” Florida writes. He looked at metros with the largest share of low-wage job growth and found that they are centered in the Rust Belt and Sun Belt:
- St. Louis (90% of all new jobs are low-wage),
- Riverside-San Bernardino Ontario (74%),
- New Orleans (59%),
- Rochester (59%), and
- Tampa-St. Petersburg (56%).
Share of New Jobs in the Low-Wage Category, 2009–13