Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a university professor in the University of Toronto’s School of Cities and Rotman School of Management, and a distinguished fellow at New York University’s Schack Institute of Real Estate.
Last year was a decent one for employment growth in large metros.
Austin and San Jose led the United States in job growth last year, according to an analysis of the latest data from the Bureau of Labor Statistics by Aaron Renn, who blogs as The Urbanophile. Houston, Charlotte, and Nashville round out the top five. And both hard-hit Detroit and Pittsburgh make the top 10, along with Salt Lake City, Dallas, and Raleigh.
The analysis covers the 51 U.S. metros with populations of one million people or more and covers the year 2010-2011, the latest period for which full data is available.
Cities and metro areas are increasingly recognized as engines of the economy and of job creation. That is certainly the case with these job creation numbers. As Renn points out: "On the whole it was a much better year for metros than we've seen in the recent past. The national economy added jobs and all but two large metros did as well." Over the same time period, the national unemployment rate dropped from 9.1 percent to 8.3 percent and 329 of the 372 metropolitan areas had lower unemployment rates in December than one year earlier.
(Click the map for a larger image)
The map above by the Martin Prosperity Institute's Zara Matheson charts the pattern for all 51 of the large metros.
The biggest gainers are a mix of knowledge-driven and creative regions (Austin, San Jose, and Raleigh); metros with substantial natural resource economies which have done especially well over the course of the economic crisis (Houston and Oklahoma City); older but transitioning industrial regions like Detroit and Pittsburgh, and America's number one center for popular music, Nashville. Renn notes that the relatively high rate of job growth in Detroit reflects the "pro-cyclical" nature of manufacturing.
For all the talk of their resilience, greater Washington, D.C., ranked just 29th while greater New York ranked 25th.
Sacramento, Birmingham, Cleveland, Virginia Beach, and Providence had the slowest rates of job creation. Las Vegas, Los Angeles, Boston, and San Francisco also had relatively low rates of job creation last year.
With the help of my colleague Charlotta Mellander, I took a quick look at some of the factors that might help explain the metro job recovery. As usual I point out that correlation does not imply causation, and additionally that we are working with a relatively small sample of metros, for which these data are available. The results could differ across all metros.
Our findings turned up only a few factors that were associated with job creation across America's largest metros.
Economists concur that two key factors drive regional economic growth – human capital or skills and technology. We found no relationship between the level of education (college grads) and job growth. But we did find a reasonable correlate between job growth and the level of analytical skills in a metro (.39).
Job growth was higher in more productive metros (with a correlation of .31 between it and economic output per capita).
Despite the rebound in jobs in Detroit and Pittsburgh, overall, job growth appears to be occurring in metros with lower levels of unionization. The correlation between job growth and unionization was the highest of any in out analysis (-.49).
Both the economic crisis and recovery have been uneven, falling most heavily on the least skilled and least advantaged. Economists argue that wage inequality has been growing across the United States as the labor market splits between highly paid, high-skill knowledge jobs and much more lower paid and lower skill service jobs. We find a substantial correlation between job growth and wage inequality (.30), meaning job growth across large metros appears to both reflect and reinforce this pattern.