Looked at in isolation, a metropolitan area’s unemployment rate can only tell you so much. The same goes for new jobs over a single time frame, or growth in high-wage jobs. But when these and other data points are combined, you begin to get a more complete, balanced picture of a metro’s labor market.
There are four main labor market performance indicators that factored into the assessment of 150 of the nation’s metropolitan areas.
- Overall employment change over four time periods (2001-2014, 2010-2014, 2013-2014, 2014-2020), with the two most recent time periods weighted more heavily in the index.
- Quality employment change over the same four periods; this category includes growth in driver industries and in growing occupations that pay at or above each metro’s living wage for two adults, one child.
- The change in unique (or de-duplicated) job postings from May 2014 to October 2014.
- Each metro’s unemployment rate.
With the 11 metrics weighted individually, Provo-Orem, Utah, a metro of 600,000 people with a well-established high-tech cluster and an expanding construction sector, is ranked as the clear No. 1 in the inaugural Labor Market 150 Index. Provo-Orem stands far above its peers with an overall score of 78.8 out of 100, well above second-ranked Houston’s score of 64.6. Among the top 150 MSAs, it is No. 1 in overall employment change, quality employment change, and unemployment rate (tied in November with Minneapolis-St. Paul and Omaha, Nebraska).
Established standouts and a few surprises populate the top of the index. Provo-Orem has been a fast-rising metro for some time. Houston has performed better than any large metro post-recession. The next two in the rankings—Raleigh and Salt Lake City—are strong tech centers. More surprising is No. 5 (Fayetteville-Springdale-Rogers, Arkansas) and a few others in the top 15: Port St. Lucie, Florida (No. 7), Myrtle Beach, South Carolina (No. 8), and Stockton-Lodi, California (No. 12).
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The bottom three metros in the index are Palm Bay-Melbourne-Titusville, Florida, Hickory-Lenoir-Morganton, North Carolina, and Tallahassee, Florida. These and other low-ranking metros were hit hard by the recession and did not recover quickly. In many cases, each metro’s driver industries continued to shed jobs after 2009, particularly in manufacturing, real estate, and government.
Major Story Lines
Here are a few things that stand out from the first edition of the Labor Market 150 Index:
Energy, Manufacturing MSAs Have Highest Share of Solid-Paying New Jobs
One component of the quality employment rank is the share of news jobs from 2010 to 2014 in growing occupations that pay above the living wage. Beaumont-Port Arthur, Texas, ranked first in this category, with 71% of new jobs in growing occupations whose median hourly earnings are above the living wage. The energy-driven metro, not far off of the Gulf of Mexico, saw sizable growth among welders, industrial machinery mechanics, chemical plant operators, and other skilled occupations that pay above the metro’s living wage of $16.64 for two adults, one child.
The rest of the top five in this category are strongly concentrated in manufacturing:
- Reading, Pennsylvania (66.2%)
- Detroit (64.6%)
- Peoria, Illinois (63.6%)
- Rockford, Illinois (63.0%)
Most Florida Metros Rank Near Top … or Bottom
Four of the top 22 metros are in Florida, led by Port St. Lucie—a metro that ranks No. 7 in quality employment thanks to growth in well-paying, concentrated industries like offices of physicians and new car dealers. However, Florida also has three of the bottom 10 metros among the largest 150: Palm Bay-Melbourne-Titusville (last at No. 150), Tallahassee (No. 148), and Pensacola-Ferry Pass-Brent (No. 143).
Other low-tier Florida metros include Ocala (No. 130), Lakeland-Winter Haven (No. 127), Jacksonville (No. 103), and Deltona-Daytona Beach-Ormand Beach (No. 100).
Florida’s largest metros—Miami, Orlando, and Tampa—fall in the middle of the ranking, between Nos. 70 and 84.
Some High-Unemployment Metros Still Have Pockets of Growth
Most of the top-performing metros have low unemployment (the average jobless for the top 30 was 5.4% in November). But a high unemployment rate doesn’t automatically equal a poor labor market. Stockton-Lodi and Bakersfield, two agriculture-dominated metros in California, rank in the top 20 despite unemployment rates near or above 10%.
Stockton’s agriculture, wine, and transportation industries have grown quickly, and it experienced a 10% uptick in job postings. Bakersfield ranked sixth from 2010 to 2014 in percentage job growth (15.2%), due largely to oil & gas and agriculture.
McAllen-Edinburg-Mission, Texas, with a similarly high unemployment rate (8.2%), has grown at a solid clip since 2013 after very strong 2001-2014 and 2010-2014 growth. Job postings were also up 5.6% in McAllen.
STEM and Knowledge Economies Fare Well
A general rule: Metros with a large share of STEM or knowledge jobs can typically be found in the top section of the index. We’ve already talked about tech-oriented Provo, Raleigh, and Salt Lake, three-fifths of the top five. But Austin (No. 6), San Francisco-Oakland (No. 14), San Jose-Sunnyvale (No. 15), and Seattle (No. 16) also have robust knowledge economies. Des Moines (No. 20) has grown due in part to its major insurance cluster, while Denver (No. 21) has experienced high-wage job growth in corporate and regional managing offices, engineering services, and computer programming and design services.
All of these metros rank highly because the index emphasizes quality employment growth, especially since 2010, in each metro’s driver industries (in addition to new jobs in growing occupations that pay at or above the living wage).
Most of the Largest Metros Are in Bottom Half of Index
After Houston at No. 2, it takes a while to find the largest metros in the rankings. Dallas-Forth Worth ranks No. 33, Boston No. 34—and after those two, Los Angeles sits at No. 87 and the New York City metro at No. 90. Chicago ranks the lowest among the large metros, at No. 120.
Data for the Labor Market 150 Index comes from EMSI Analyst. For more on the index and EMSI’s employment data, email Josh Wright. Follow EMSI on Twitter (@DesktopEcon) or check us out on LinkedIn and Facebook.