These Are the Cities That Can Show Us How to Create Jobs

America's most competitive large metros for job growth.

Image
Shutterstock

FOCUS: Renewal  bug
Stories of Urban Reinvention See full coverage

As a newly re-elected President Obama reminded Americans early Wednesday morning, creating jobs and getting the economy back on track are the nation's top priorities. To better understand what actually works to get the economy moving again, the administration should look at the nation's most successful cities and metro areas. As TIME's Rana Foroohar predicted in September, with the election behind us, we may start to see a shift away from the stale "tax cut" versus "stimulus" debate to a new economic policy paradigm where cities in effect "become the petri dishes in which we do different growth experiments."

recent analysis of competitiveness and job growth across U.S. metros conducted by Economic Modeling Specialists could not be more timely. It provides a detailed assessment of the metros that have generated the most robust job growth based on "unique regional factors rather than national trends." To do so, it conducted a shift-share analysis of employment trends for the 100 largest U.S. metros for the period 2010 to 2012. Shift-share analysis, the study notes, helps "distinguish between growth that is primarily based on big national forces (the proverbial 'rising tide lifts all boats' analogy) vs. local competitive advantages." Its regional competitiveness assessment is based on subtracting the the number of jobs expected for each metro (or MSA) based on national economic trends from the region's total jobs, adding that:

The difference between the total and expected is the competitive effect. If the competitive effect is positive, then the MSA has exceeded expectations and created more jobs than national trends would have suggested. It is therefore gaining a greater share of the total jobs being created. If the competitive effect is negative, then the MSA is below what we would expect given national trends. In this case the MSA is losing a greater share of the total jobs being created.

It's important to remember that the analysis is not based on total job growth, but rather the portion of it that is attributable to unique local factors, controlling for the expected effect of national conditions.
 
The chart below, from the report, lists the top 20 most competitive large metros across the United States. The percentages in the chart detail the share of jobs from this year that are related to competitiveness between 2010 and 2012.
 

Top 20 Competitive Metros

Excerpt of chart courtesy of EMSI (click here to view complete chart for all metros)

San Jose, home to Silicon Valley, not surprisingly ranks first and Austin, Texas, another leading high-tech metro, is second. But after this is where the list gets very interesting. In addition to high-tech knowledge economy metros like these and Raleigh-Cary, North Carolina, Seattle, and Columbus, Ohio, it includes resource-based metros like Houston and Oklahoma City, as well recovering Sun Belt metros like Phoenix and older Rust Belt metros, including Detroit, whose economies are improving after being so hard hit by the economic crisis.

But, not all Sun Belt or all Rust Belt metros fit this profile. When it comes to job creation, the pattern does not conform to such simple labels — it is considerably more nuanced and variegated.

As the chart below shows, the 20 least competitive metros include a mix of Sun Belt metros like Las Vegas and Tucson, hard-hit Rust Belt metros like Cleveland, Milwaukee, and St. Louis and resort metros in Florida and elsewhere that remain devastated in the wake of the housing crash, as well as some state capitals like Harrisburg, Pennsylvania, Sacramento, California, Little Rock, Arkansas, Providence, Rhode Island, and Madison, Wisconsin likely sent reeling from cutbacks and austerity measures.

Bottom 20 Competitive Metros

Excerpt of chart courtesy of EMSI (click here to view complete chart for all metros)

If we are serious about creating jobs, these cities and metros can show the way.

Top image (clockwise from top left): GSPhotography/Shutterstock.com, Jennie Book/Shutterstock.com, Mariusz S. Jurgielewicz/Shutterstock.comRandy Judkins/Shutterstock.com

About the Author

  • Richard Florida is Co-founder and Editor at Large of CityLab.com and Senior Editor at The Atlantic. He is director of the Martin Prosperity Institute at the University of Toronto and Global Research Professor at NYU. More
    Florida is author of The Rise of the Creative ClassWho's Your City?, and The Great Reset. He's also the founder of the Creative Class Group, and a list of his current clients can be found here