The American economy has pumped out more than 200,000 jobs a month for six months running, as of the latest (July) numbers. Still, more than 2 million college-educated workers age 25 or older are unemployed, according to the U.S. Bureau of Labor Statistics. Workers age 25 to 34 face a 6.6% unemployment rate—the highest of any group other than the one encompassing new grads (ages 20-24).
But in Omaha, Neb., the situation is considerably better. Nebraska’s most populous city has an overall unemployment rate of just 4.1% (projected 2014, by Moody's Moody's), helping it to land the No. 3 spot on our list of America’s Best Cities for Young Professionals. It boasts a strong presence of large businesses (1 for every 810 residents) as well as small-to-medium ones (1 for every 52 residents). Warren Buffett’s hometown is headquarters to the Fab Five, a group of Fortune 500 companies that includes Berkshire Hathaway Berkshire Hathaway, Union Pacific Union Pacific Corp., ConAgra Foods ConAgra Foods, Kiewit Corporation and Mutual of Omaha. San Jose-based PayPal chose to put its operations center there. And of course, it’s home to Omaha Steaks. But the city also has a lively startup scene, including its own Midwestern-focused tech news blog, Silicon Prairie News, and regional start-up conference, Big Omaha. Thanks to the combination of companies large and small, Omaha jobs are projected to grow at an average annual rate of 2.8% through 2016. Given that the greater metropolitan area, which includes nearby Council Bluffs, Iowa, is less than 1 million people, that’s manageable opportunity.
“We’re big enough that there’s a sizable tech community and entrepreneur community, but not so big that it’s overwhelming and you get lost,” says Randy Thelen, Senior Vice President at the Greater Omaha Economic Development Partnership. “There’s also sort of a Berkshire Hathaway legacy … a tremendous amount of wealth in the community that’s pretty active in the angel world.”
Salaries here aren’t bad either. The median pay for college-educated workers ages 24 to 34 is a respectable $51,400. While that’s about the middle of the pack among the cities we assessed, those dollars go considerably farther in Omaha, where living costs about 6.5% less than the national average, making it the 20th least expensive city. Thanks to this combination of factors, the Midwestern city has moved up two spots since 2011, when we last ranked America’s Best Cities For Young Professionals.
“People here want to see young professionals succeed,” says Sarah Wernimont, manager of talent and workforce for the Greater Omaha Chamber. “Because the market is smaller you can have those opportunities, but I think the perception is that you lose, maybe the the livability or cool factor you get on the coasts. But that’s not the case at all.” She points to non-work-related factors, like Omaha’s music and arts scene (not considered in our ranking), as making the metro area a great place to build a career.
Behind the Numbers
To find out which cities offer the best prospects for professionals aged 24 to 34 who hold a bachelor’s degree or higher, we analyzed the 100 largest Metropolitan Statistical Areas (cities and their surrounding suburbs) as defined by the U.S. Office of Management and Budget, ranking them on seven factors with an equal weight on each. We considered local unemployment rates (projected 2014 annual) and 2014-2016 job growth projections, provided by Moody’s and the Bureau of Labor Statistics. We assessed the number of small businesses less than 500 employees) per capita as well as large ones, using the latest data available from the U.S. Census Bureau. We also factored in median salaries for 24- to 34-year-old employed college graduates, using data provided by Payscale.com. And we rated how far these salaries might go with the help of Moody’s cost-of-living index. Finally, we considered Census data on the percentage of the local population aged 25 and older with bachelor’s degrees or higher.
The cities capturing the No. 1 and No. 2 spots on this year’s lists are Des Moines, Iowa, and Raleigh, N.C., respectively—the same cities that landed these slots when we first published a Best Cities for Young Professionals list three years ago. Both cities are home to plenty of companies as well as a well-educated labor force: the greater Des Moines and West Des Moines metro boasts an impressive 1 large (500+ employee) company for every 612 people, and 41.7% of Raleigh’s population has at least a bachelor’s degree. Not surprisingly, these cities also top our most recent list of Best Places for Business and Careers.
Raleigh has been the recipient of many FORBES honors this year, including, the No. 2 slot on our list of America’s Fastest-Growing Cities in February. Its close proximity to the Research Triangle Park, where more than 170 companies—including IBM, GlaxoSmithKline, Syngenta, Credit Suisse, and Cisco—have outposts makes it a hotbed of job opportunities. The area is a natural greenhouse for the well-educated, thanks to the presence of North Carolina State University in Raleigh, Duke University in nearby Durham, and the University of North Carolina at Chapel Hill.
While this year’s list features many places that graced the list last time, there are also several newcomers. One is the greater Boise-Nampa metropolitan area of Idaho, with a cost of living 7% below the national average and a lot of large companies (1 for every 728 people, the 9th-best among the cities we analyzed), which clocks onto the list for the first time at No. 7. Utah’s Provo-Orem takes its newcomer slot at No. 8, thanks in part to its low 3.8% unemployment rate, the best of any city we assessed. (Provo also ranks No. 3 on our Best Places for Business and Careers).
Smaller, non-coastal cities tend to shine on this list, thanks to their strong economies, reasonable salaries, and low costs of living. A few coastal cities did make the cut thanks to high salaries and the twin engines of a strong business presence and a pool of educated worker. However, their high costs of living push them lower down the list. Silicon Valley (the greater San Jose, Calif., metro area) ranks No. 1 in terms of median pay ($89,600), but only makes No. 11 on our list overall, in large part due to its status as the third-most-expensive metro to live in. Connecticut’s hedge-fund-heavy Fairfield County moves up a few slots to No. 12 thanks to its heavy population of workers with bachelor’s degrees (44.6%, the third-highest) and high number of small companies (1 for every 42 workers, second place). And San Francisco may have an exciting tech scene with many small companies (1 for every 46 residents) offering high pay ($71,500 median salary), but its cost of living rates the absolute worst among the bunch.