The Top US Cities for Job Seekers in 2020

With the national unemployment rate in January 2020 at 3.6% and 225,000 jobs being added in just that month, you might be asking, "Where are all these jobs?" If you're seeking employment, it could make sense to look in cities where jobs are on the rise.

MoneyGeek compared over 50 cities with labor forces of at least 500,000 and analyzed five key economic factors for each one, including wage and job growth, unemployment rate, the size of the labor force and housing affordability to rank the top cities in the United States for job seekers.

The best cities for jobs have a wide variety of industries, with tech and health care sectors leading the way. "The cities that do well and continue to do well tend to have a more diversified economy," says Annika Hinze, director of urban studies and associate professor of political science at Fordham University in New York City. "Multi-industry cities are much more resilient against collapse because their fortunes do not ride on one industry alone."

Job Growth Ranking for Major Cities

When you look at how the top cities rank, it's essential to see how the lower cities rank and why. Several cities that were once manufacturing meccas but experienced industrial decline starting in the 1980s are at the bottom of the rankings, including Chicago, Pittsburgh, Indianapolis, Buffalo, Rochester and Milwaukee. High-rent places like New York City and cities in California also fall toward the bottom.

Detailed Findings on Best and Worst Cities for Jobs

It's hard to imagine that places like Los Angeles and New York City would be at the bottom of the rankings for top U.S. cities for job growth in 2020, but they landed in those spots because they rank lower on employment growth, competition and housing affordability. There is a large workforce in California, and many companies are headquartered there. Still, the wage-to-rent ratios in some of California's most booming cities such as Los Angeles, San Francisco, Riverside and San Diego have made these cities unaffordable to live in for the majority of Americans.

Individual Job Growth Indicator Rankings

"City growth is essentially driven by exports that bring 'new' money into the city's economy," says John Downen, senior research analyst at the University of Utah's David Eccles School of Business in Salt Lake City, one of the cities in our top 15.

"So cities with companies that produce goods and services that people elsewhere want — think Amazon in Seattle — are more likely to experience economic growth."

But you need more than big-beyond-belief companies like Amazon, Downen adds.

"To support this growth, it's important to have a workforce with the skills those exporting industries need and a regulatory environment that does not greatly increase the cost of doing business, whether through high taxes or restrictive regulations."

More Jobs and Top Employers Strengthen a City’s Appeal

There are many reasons that cities grow fast, and one of the biggest factors is when a city attracts a large employer.

"Research has shown that most of the growth we've seen in income inequality in the last 40 years in America has occurred between, not within, firms," says Jon Thompson, an assistant professor of economics at Willamette University in Oregon.

"Working for Microsoft, Boeing, Alphabet or other large, nearly monopolistic enterprises is typically great for workers compared to working for enterprises in more competitive industries," Thompson says.

Seattle, of course, has two of those three companies Thompson mentions, and some of the biggest companies in the world reside in the cities on our list. "These are coveted positions, and the cities that host major work sites for these enterprises grow much more rapidly than those that don't," Thompson says.

So even if you don't have designs on landing a job with a multi-billion or trillion-dollar company, Thompson suggests moving to the cities that house them. A city that works well for an international powerhouse will generally mean more work for everyone.

Rising Wages Lift Cities Up

Grand Rapids, Michigan saw its wages climb 6.6%, and Denver was close behind (6.5%). At the bottom was Miami, Florida, where wages went down -2.5%. Nobody can know the future, and maybe Miami will be offering pay raises and company cars to everybody in the next year, but for now, it isn't a good sign when a city's wages are dropping.

Low Unemployment Boosts a City's Outlook

It seems to bode well for current and future job seekers when a city has a lower unemployment rate than others. Salt Lake City currently has a 1.9% unemployment rate, followed by Boston at 2.1%, and New Orleans is at the very bottom with 4.4% and Pittsburgh close behind with 4.3%.

Affordable Housing Helps Workers Live Well

This ratio translates to housing affordability. The more money you spend on rent and housing, the less money you have for everything else. On our list, Detroit and St. Louis fare very well (4.8 and 4.5 respectively). Birmingham gets a 4.1, Cleveland, 4.0 and Hartford, Connecticut, 4.0.

That means if you live in Detroit, your monthly income is typically going to be 4.8 times your monthly rent. San Francisco is at the bottom with 1.3. Los Angeles is barely better at 1.6.

Methodology

To rank the best cities for jobs, MoneyGeek calculated three factors from the Bureau of Labor Statistics and Zillow representing how good a city is for someone seeking jobs. The first factor is job growth and incorporates the trend in jobs created and the trend in wages. The next consideration is job competition and includes the unemployment rate as well as the overall size of the employment numbers reflecting greater absolute availability of jobs. The final factor is housing affordability, and it captures the ratio of wages over rents to indicate an area's cost of living.

Metrics Used:

Growth in Employment, Last 12 Months: 20% weight
Growth in Employment, Last 3 years: 10% weight
Growth in Hourly Wages, Last 12 months:15% Weight
Unemployment Rate, Current: 35% Weight
Size of Labor Force: 10% weight
Monthly Wages Over Monthly Rents Ratio: 10% weight

Factors:

Overall Growth: Growth in employment last 12 months (44%), growth in employment last 36 months (22%), hourly wage growth 33%. In the overall ranking, this is 45% of the overall weight.

Job Competition: Unemployment rate 78% weight, size of labor force 22% weight. In the overall ranking, this is 45% of the overall ranking.

Housing Affordability: Wages over rents ratio, 100%. This is 10% of the overall ranking composition.

For purposes of this analysis, only metropolitan statistical areas with labor forces larger than 500,000 were considered in building the ranking.

Geoff Williams has been a freelance journalist since the 1990s, mostly specializing in personal finance and small business issues. Over the years, his articles have appeared in CNNMoney.com, Consumer Reports, The Washington Post, Entrepreneur Magazine, LIFE, Ladies’ Home Journal, Forbes.com and with American Express Business Trends and Insights. Williams is also the author of several books, including "Washed Away: How the Great Flood of 1913, America's Most Widespread Natural Disaster, Terrorized a Nation and Changed It Forever" and "C.C. Pyle's Amazing Foot Race: The True Story of the 1928 Coast-to-Coast Run Across America."

Born in Columbus, Ohio, Williams lives in Loveland, Ohio, with his two teenage daughters and is a graduate of Indiana University. To learn more about Geoff Williams, you can connect with him on LinkedIn or follow his rarely used Twitter page.

Sources

U.S. Bureau of Labor Statistics. “Civilian labor force and unemployment by state and metropolitan area.” Accessed February 1, 2020.

U.S. Bureau of Labor Statistics. “State and Area Employment, Hours, and Earnings — Seasonal.” Accessed Feb 1, 2020.

Zillow. “Housing Data.” Accessed February 1, 2020

Last Updated: February 27, 2020