But prospects are much brighter in some cities than others, most notably Des Moines, Iowa, which ranks No. 1 on our list of Best Cities For Young Professionals.
The Iowa state capital has a higher concentration of big businesses (1 for every 568 residents) than any other city we assessed, which equals more job opportunities. Financial services and insurance companies like Principal Financial Group and EMC Insurance Companies have long made their home in the corn-belt city, earning it the nickname “Hartford of the West.” {C}
With business costs 16 percent below the national average, Des Moines has been attracting startups and companies relocating from the coasts, and a number of established companies in the area are expanding, like DuPont’s bioscience unit Pioneer Hi-Bred, which plans to hire an additional 500 employees over the next few years. As a result, Des Moines boasts a low 5.8 percent unemployment rate (sixth lowest of the 100 cities we studied) and healthy projected job growth rates of 0.97 percent in 2011 and 2.86 percent in 2012.
In Pictures: The 15 Best Cities For Young Professionals
“We’re encountering a lot of young individuals moving here from larger cities where it would take five or 10 years to ascend into positions, where here they are having opportunities given to them to move more quickly into their career paths.” says Mary Bontrager, vice president of workforce for the Greater Des Moines Partnership, a regional economic development organization.
The median salary for employed college graduates between the ages of 24 and 34 in the city is $47,200. That ranks only 42nd out of the 100 cities we screened for the list, but that salary goes further in Des Moines, where living costs are 8 percent lower than the national average, making it the 22nd least expensive city.
Behind the Numbers
To determine the best cities for young professionals, which we define as adults aged from 24 to 34 who hold a Bachelor’s degree or higher, we started with the 100 largest U.S. Metropolitan Statistical Areas (cities and the suburbs surrounding them) as defined by the U.S. Office of Management and Budget. We assessed these cities based on seven factors, weighting them evenly: local unemployment rates and 2010 to 2012 job growth projections provided by Moody’s Economy.com; Census Bureau data on the number of small businesses (defined as less than 500 employees) per capita, as well as the number of large businesses; the median salaries for 24- to 34-year-old employed college graduates, provided by PayScale.com; Moody’s cost-of living index, to gauge how far those paychecks will go; and the percentage of the population aged 25 and older with college degrees in the area.
In second place on our list: Raleigh, N.C. The college town turned boom town, which tops our Best Places for Business and Careers list this year, has the fourth best job growth outlook of the cities we studied (2 percent a year for 2010-12) and a 7.9% unemployment rate that’s well below the national average. With an abundance of colleges and universities in the area such as University of North Carolina and Duke University, and Research Triangle, a major center for high-tech and biotech research, more than 42 percent of the local population touts BA degrees, making it the most educated of the cities we looked at.
In Pictures: The 15 Best Cities For Young Professionals
Midwestern cities eclipsed many glitzier coastal competitors for top spots on our list. In addition to Des Moines, Madison, Wis., ranks third; billionaire Warren’s Buffett’s hometown of Omaha, Neb., is No. 5; and Minneapolis-St. Paul, Minn., is No. 10. All three tout low unemployment rates and a large college-educated demographic. The cost of living in each of these areas is around or below the national average, ensuring their young residents’ relatively high salaries go even farther. Healthy job growth is projected in all of these heartland hubs as well.
A few northeast metropolises cracked the top 15: hedge fund heavy Fairfield County, Conn. (No. 15); Portland, Maine (No. 6), which boasts the highest number of small businesses per capita of the cities we screened; government-town Washington, D.C. (No. 9); and the education and tech hub of Boston, Mass. (No. 12). No West Coast cities made the cut.