Study: Young adults like Houston as income, employment hot spot
Houston Business Journal – by G. Scott Thomas Special to Houston Business Journal
The Southwest has become the new frontier for young Americans.
According to a new Portfolio.com/
bizjournals study, men and women in their 20s and 30s say that part of the county offers the best sanctuary in a recessionary economy. And Houston figures prominently in that thinking.
The study of 67 metro areas nationwide shows that five Southwestern metropolitan areas, led by No. 1 Austin, rank among the nation’s eight best places for young adults (see accompanying chart).
Austin has two key qualities that make it stand out from the pack, the study shows.
Two-thirds of the nation’s major markets have fewer jobs now than five years ago, but Austin added 99,200 jobs during that span. Its annual employment-growth rate of 2.8 percent is the fastest in America.
What’s more, Austin has the strongest concentration of young people among the metros studied, with 28 percent of its residents between the ages of 18 and 34. The median for the study group is 23.1 percent.
Washington, Raleigh and Boston are the three runners-up in the study’s rankings of the best places for young adults. They’re followed by four Southwestern metros — Houston, Oklahoma City, Dallas-Fort Worth and Tulsa — that occupy fifth through eighth place.
Portfolio.com/bizjournals analyzed the 67 U.S. metros with populations above 750,000, searching for qualities that would appeal to workers in their 20s and early 30s. The study’s 10-part formula gave the highest marks to places with strong growth rates, moderate costs of living and substantial pools of young adults who are college-educated and employed.
Here’s a quick look at the Top 5 metros for young adults, as well as the other major Texas metros in the Top 10.
1. Austin: The Texas capital’s two dominant qualities were noted above. But its attractiveness to young adults is broadly based. Austin ranks among the 10 leading markets in five of 10 categories that were analyzed.
2. Washington, D.C.: Educated young adults flock to Washington, where 35.8 percent of all 18-34-year-olds hold bachelor’s degrees. The study group’s median is 23.2 percent. Per capita income ($56,510) is well above average.
3. Raleigh, N.C.: This is the fastest-growing major metro in the nation. The population of the Raleigh area is increasing by 3.9 percent per year. That’s more than triple the pace for the typical market, 1.2 percent.
4. Boston: Elite universities such as Harvard University and Massachusetts Institute of Technology give Boston its intellectual cachet. The local share of young adults with college degrees (37.6 percent) is the highest in the country.
5. Houston: Employment opportunities abound in Houston. Its job-growth rate (1.7 percent per year) ranks among the five best in the nation. And so does its annual upswing in per capita income (6.6 percent).
6. Oklahoma City: The unemployment rate for young adults is lower here than anywhere but Salt Lake City and Tulsa. Oklahoma City also enjoys the nation’s third-best pace for annual income growth, a rapid 7.2 percent.
7. Dallas-Fort Worth: The recession caused some backsliding in 2009, but Dallas-Fort Worth still has 206,000 more jobs than it did five years ago. Local population is zipping higher by 2.4 percent per year.
8. Tulsa, Okla.: Here’s an area that’s a true bargain. Median rent is $508 per month in Tulsa, the third-lowest figure in the study group. Compare that to such budget-breakers as San Jose (median rent of $1,334) or Honolulu ($1,227).
9. Seattle: This high-tech metro offers a wide range of good-paying jobs. Seattle ranks among the 10 markets with the largest per capita incomes ($50,471) and smallest unemployment rates for young adults.
10. Baton Rouge, La.: Louisiana is on its way back from the wrath of Hurricane Katrina, and this is one of its success stories. Baton Rouge boasts a high concentration of young adults (26.1 percent) and a strong rate of income growth.
The least desirable market for young adults, according to the Portfolio.com/bizjournals study, is Detroit, which shares the pain of the major automotive corporations based there.
Methodology for the study
Portfolio.com/bizjournals set out to find the U.S. markets that are best for young job-seekers.
The study’s objective was to identify markets that offer the best opportunities for workers in their 20s and early 30s. It gave the highest marks to communities that have strong growth rates, moderate costs of living and substantial pools of young adults with jobs and college degrees.
The study covered all 67 metropolitan areas with at least 750,000 residents as of mid-2008, using data from the U.S. Census Bureau’s American Community Survey; employment figures from the U.S. Bureau of Labor Statistics and income figures from the U.S. Bureau of Economic Analysis. Growth rates were calculated by bizjournals, based on data from all three agencies. All statistics were the latest available when the study was prepared.
A 10-part formula was used to rate each market’s receptivity to young job-seekers. The first five factors dealt with each area’s growth rate and potential. The next four categories assessed conditions for young adults. The final indicator focused on a key component of the cost of living.
Each area’s statistics were compared against the averages for the study group in all 10 categories. Above-average performances received positive scores, while below-average results were given negative scores. Each area’s 10 category scores were totaled to determine its overall rank. Opportunity scores ranged from 10.08 points for Austin to minus-12.53 points for Detroit. – G. Scott Thomas