Where Americans Are Getting Richer
by Lauren Sherman
Monday, November 29, 2010
Greensboro, N.C., might not be the best place to find a steady job. But if you've already got one, chances are you're doing better than you were a couple of years ago.
The city's unemployment rate is 9.8%, nearly a point above the still-high national average. But those with college degrees who have managed to keep their jobs during the recession have seen their median income jump to $53,400 in 2010 from $48,900 in 2007.
Sarasota, Fla., tells a similar story. The city carries a frightening unemployment rate of 12.6%. Yet its median income has increased to $51,100 from $47,400.
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Depressed. Struggling. Discouraged. These are the cities where Americans are getting richer?Compared with the rest of the country, yes. "We're not talking gangbuster wages here," says Al Lee, director of quantitative analysis at PayScale.com, a Seattle, Wash.-based provider of employee compensation data. "Raise increases have been generally flat nationally over the last couple of years, so a few points make a big difference."
To determine the places where Americans are getting richer, PayScale studied the compensation of college graduates for which it had data--about 1.5 million people--in the 100 most populous Metropolitan Statistical Areas in the country, ranking each city by compounded income growth between 2007 and 2010.
Why are these middle-of-the-road cities succeeding? Rochester and Poughkeepsie, N.Y., didn't have a housing boom, so they didn't have a bust, either. "Slow and steady cities benefited," says Lee. Same with places like Pittsburgh, Penn., where the big business is in medicine and education. In Thousand Oaks, Calif., biotech reins. "These are industries that weren't as affected by the recession," says Lee.
Cities like New York, San Francisco, and Chicago may garner higher median incomes, but their major industries are more cyclical. Publishing, finance and media are all in flux at the moment. Education, government and medicine are more stable--and the cities that rely on those industries are as well.
Greensboro, for instance, has a low 2010 median income--$53,400--compared with the national median income of college graduates, which is over $58,000. But it has something most cities with higher median incomes or reliance on construction don't: an economic backbone supported by businesses in the insurance field, manufacturing and education. These industries might not be growing rapidly, but they aren't disappearing either--so for now, a steady income is better than a high income.
Of course, some cities on our list are lucky enough to boast both climbing incomes and lots of jobs. Honolulu, Hawaii, continues see an increase in income while maintaining a low unemployment rate of 5.3%. (Most economists would agree that the natural of unemployment lies between 4% and 7%.)
"Honolulu wasn't as affected by the housing boom/bust as, say, Las Vegas," says Lee. "And tourism is finally starting to pick up a bit."
In most places, the amount of money people make is tied closely to their level of education. And in places like Sacramento, Calif., (where the median pay for college graduates is fairly high at $64,900, and compounded growth is over 6%), the uneducated suffer most.
"Sacramento is a government town," says Cynthia Kroll, senior regional economist and executive director of staff research at the Fisher Center of Real Estate and Urban Economics at the Haas School of Business, University of California Berkeley. "Within the government, higher-paid workers are more protected. They have more seniority. Even though there have been plenty of layoffs on the lower end, the median income [for college-educated workers] might still be going up."
1. Greensboro, N.C.
Median Pay, 2007: $48,900
Median Pay, 2010: $53,400
Median Pay Trend: 9.2%
Unemployment Rate: 9.8%
2. Thousand Oaks, Calif.
Median Pay, 2007: $62,900
Median Pay, 2010: $68,600
Median Pay Trend: 9.1%
Unemployment Rate: 11.1%
3. Rochester, N.Y.
Median Pay, 2007: $52,900
Median Pay, 2010: $57,300
Median Pay Trend: 8.3%
Unemployment Rate: 7.4%
4. Poughkeepsie, N.Y.
Median Pay, 2007: $56,700
Median Pay, 2010: $61,200
Median Pay Trend: 7.9%
Unemployment Rate: 7.5%
5. Sarasota, Fla.
Median Pay, 2007: $47,400
Median Pay, 2010: $51,100
Median Pay Trend: 7.8%
Unemployment Rate: 12.6%
6. Pittsburgh, Pa.
Median Pay, 2007: $51,600
Median Pay, 2010: $55,500
Median Pay Trend: 7.6%
Unemployment Rate: 7.4%
7. Baton Rouge, La.
Median Pay, 2007: $46,900
Median Pay, 2010: $50,400
Median Pay Trend: 7.6%
Unemployment Rate: 7.8%
8. Madison, Wis.
Median Pay, 2007: $53,000
Median Pay, 2010: $56,900
Median Pay Trend: 7.4%
Unemployment Rate: 5.1%
