by Morgan Brennan
With the unemployment rate stuck above 9%, recent college graduates are facing fierce competition for white-collar work: More than 2 million college-educated workers 25 and older are unemployed, according to the Bureau of Labor Statistics.
But prospects are much brighter in some cities than others, most notably Des Moines, Iowa, which ranks No. 1 on our list of Best Cities For Young Professionals.
The Iowa state capital has a higher concentration of big businesses (1 for every 568 residents) than any other city we assessed, which equals more job opportunities. Financial services and insurance companies like Principal Financial Group and EMC Insurance Companies have long made their home in the corn-belt city, earning it the nickname "Hartford of the West."
With business costs 16% below the national average, Des Moines has been attracting startups and companies relocating from the coasts, and a number of established companies in the area are expanding, like DuPont's bioscience unit Pioneer Hi-Bred, which plans to hire an additional 500 employees over the next few years. As a result, Des Moines boasts a low 5.8% unemployment rate (sixth lowest of the 100 cities we studied) and healthy projected job growth rates of 0.97% in 2011 and 2.86% in 2012.
"We're encountering a lot of young individuals moving here from larger cities where it would take five or 10 years to ascend into positions, where here they are having opportunities given to them to move more quickly into their career paths." says Mary Bontrager, vice president of workforce for the Greater Des Moines Partnership, a regional economic development organization.
The median salary for employed college graduates between the ages of 24 and 34 in the city is $47,200. That ranks only 42nd out of the 100 cities we screened for the list, but that salary goes further in Des Moines, where living costs are 8% lower than the national average, making it the 22nd least expensive city.
Behind the Numbers
To determine the best cities for young professionals, which we define as adults aged from 24 to 34 who hold a Bachelor's degree or higher, we started with the 100 largest U.S. Metropolitan Statistical Areas (cities and the suburbs surrounding them) as defined by the U.S. Office of Management and Budget. We assessed these cities based on seven factors, weighting them evenly: local unemployment rates and 2010 to 2012 job growth projections provided by Moody's Economy.com; Census Bureau data on the number of small businesses (defined as less than 500 employees) per capita, as well as the number of large businesses; the median salaries for 24- to 34-year-old employed college graduates, provided by PayScale.com; Moody's cost-of living index, to gauge how far those paychecks will go; and the percentage of the population aged 25 and older with college degrees in the area.
In second place on our list: Raleigh, N.C. The college town turned boom town, which tops our Best Places for Business and Careers list this year, has the fourth best job growth outlook of the cities we studied (2% a year for 2010-12) and a 7.9% unemployment rate that's well below the national average. With an abundance of colleges and universities in the area such as University of North Carolina and Duke University, and Research Triangle, a major center for high-tech and biotech research, more than 42% of the local population touts BA degrees, making it the most educated of the cities we looked at.
Midwestern cities eclipsed many glitzier coastal competitors for top spots on our list. In addition to Des Moines, Madison, Wis., ranks third; billionaire Warren's Buffett's hometown of Omaha, Neb., is No. 5; and Minneapolis-St. Paul, Minn., is No. 10. All three tout low unemployment rates and a large college-educated demographic. The cost of living in each of these areas is around or below the national average, ensuring their young residents' relatively high salaries go even farther. Healthy job growth is projected in all of these heartland hubs as well.
A few northeast metropolises cracked the top 15: hedge fund heavy Fairfield County, Conn. (No. 15); Portland, Maine (No. 6), which boasts the highest number of small businesses per capita of the cities we screened; government-town Washington, D.C. (No. 9); and the education and tech hub of Boston, Mass. (No. 12). No West Coast cities made the cut.
We ranked the 100 largest U.S. Metropolitan Statistical Areas based on projected job growth rates for 2010 to 2012 and cost of living data, provided by Moody's Economy.com; median salaries for 24 to 34 year old employed college graduates, provided by Payscale.com; unemployment rates; Census Bureau data on the number of small businesses and large businesses per capita; and the percentage of college graduates in the local population.
1. Des Moines, Iowa
M.S.A.: Des Moines-West Des Moines, Iowa
Average Annual Job Growth (2010-2012): 0.99%
Median salary: $47,200
Cost-of-living index (U.S. average is 100): 92
Percent of pop. with college degrees: 33.8%
1 small business for every 50 residents
1 large business for every 568 residents
Unemployment rate: 5.8%
The corn-belt city has the most big businesses per capita, a brag-worthy unemployment rate, low cost of living and a flourishing number of young professionals residing in the area.
2. Raleigh, N.C.
M.S.A.: Raleigh-Cary, N.C.
Average Annual Job Growth (2010-2012): 2%
Median salary: $51,500
Cost-of-living index (U.S. average is 100): 104.4
Percent of pop. with college degrees: 42.2%
1 small business for every 49 residents
1 large business for every 770 residents
Unemployment rate: 7.9%
The college town has one of the best job growth projections of any city we assessed and the 16th best average salary for young professionals, exceeded only by markedly more expensive cities.
3. Madison, Wis.
M.S.A.: Madison, Wis.
Average Annual Job Growth (2010-2012): 0.89%
Median salary: $4 7,100 Cost-of-living index (U.S. average is 100): 102.6
Percent of pop. with college degrees: 41%
1 small business for every 48 residents
1 large business for every 689 residents
Unemployment rate: 5.3%
Wisconsin's capital city boasts a low unemployment rate thanks to governmental jobs and the University of Wisconsin-Madison, and a growing number of biotech and advertising companies.
4. Salt Lake City, Utah
M.S.A.: Salt Lake City, Utah
Average Annual Job Growth (2010-2012): 1.32%
Median salary: $51,200
Cost-of-living index (U.S. average is 100): 103.9
Percent of pop. with college degrees: 29.7%
1 small business for every 43 residents
1 large business for every 764 residents
Unemployment rate: 7.2%
A large number of small businesses per capita, a high concentration of banks and good paychecks mean the "Crossroads of the West" offers opportunity to young professionals.
5. Omaha, Neb.
M.S.A.: Omaha-Council Bluffs, NE-IA Average
Annual Job Growth (2010-2012): 0.82%
Median salary: $45,400
Cost-of-living index (U.S. average is 100): 91.8
Percent of pop. with college degrees: 31.7%
1 small business for every 50 residents
1 large business for every 754 residents
Unemployment rate: 4.6%
Warren Buffett's hometown has the lowest unemployment rate on our list, low cost of living and a significant number of large businesses.
6. Portland, Maine
M.S.A.: Portland-South Portland-Biddeford, Maine
Average Annual Job Growth (2010-2012): 0.9%
Median salary: $41,000
Cost-of-living index (U.S. average is 100): 101.9
Percent of pop. with college degrees: 34.4%
1 small business for every 35 residents
1 large business for every 696 residents
Unemployment rate: 6.2%
The New England port town has the highest number of small businesses per capita, a relatively high proportion of large businesses and a low unemployment rate.
7. Denver, Colo.
M.S.A.: Denver-Aurora-Broomfield, Colo.
Average Annual Job Growth (2010-2012): 1%
Median salary: $51,000
Cost-of-living index (U.S. average is 100): 102.8
Percent of pop. with college degrees: 37.6%
1 small business for every 43 residents
1 large business for every 1,020 residents
Unemployment rate: 8.5%
The Mile High City boasts a significant college-educated population, a note-worthy number of small businesses and a healthy job growth rate that's bolstered by the presence of companies like Lockheed Martin and IBM.
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