Dr. Michael Shires and Joel Kotkin on Cities Creating the Most High-Wage Jobs | Forbes
The Cities Creating the Most High-Wage Jobs
By Michael Shires & Joel Kotkin | June 26, 2017 | Forbes
As the country moves toward full employment, at least as economists define it, the quality of jobs has replaced joblessness as the primary concern. With wages still stagnant, rising an anemic 2.5% in the year to May, the biggest challenge for most parts of the U.S. is not getting more people into the workforce but rather driving the creation of the types of jobs that can sustain a middle-class quality of life.
To that end, the key sector to watch is business and professional services. By far the nation’s largest high-wage sector -- including such fields as law, accounting, architecture, advertising, engineering, scientific research and development, and computer systems design – it employs 20.5 million Americans, roughly the same as the finance and manufacturing industries combined. Over the past decade, the number of people working in business and professional services has expanded by nearly 2.5 million, including an increase of more than half a million jobs in the last year.
We decided to take a look at which metropolitan areas are gaining the most professional and business services jobs and the trends that are driving some to pull ahead while others fade. Our rankings look at employment in the sector over time— assessing short, medium and long-term job trends and adding in variables for persistence and momentum as well. The results of these trends, based on three-month averages, are normalized and each metropolitan statistical area is assigned a score based on its relative position in each area. The rankings this year produced some surprising results, as well as some familiar stories.
The shift to affordable places
Looking at the 70 largest labor markets in the country, the clear winners are affordable, business-friendly locales – and their momentum is growing. These span an array of regions, from the Midwest heartland to the Deep South, Texas and the Intermountain West.
Our number one metro area for professional and business service jobs, Nashville, Tenn., epitomizes many of the characteristics that drive high-end employment today. Since 2011, Nashville’s job count in professional and business services has expanded a remarkable 42.6% to 160,300, easily the highest growth rate of any major metropolitan area. Management and technical consulting, architecture and related services have led this growth.
The very forces that lead companies to Nashville -- low taxes and a pro-business regulatory environment -- also apply to several of our other top 10 places. These include No. 2 Kansas City, Mo., which has logged 28.4% growth since 2011. KC, better known in the rest of the country for barbecue and its music scene (though not quite Nashville), has grown a vibrant economy based in good part on service businesses in architecture and innovative administrative support models (especially for health care providers), accounting for some 100,000 jobs in professional and business services.