The best job markets are not in the biggest cities

America’s hottest job markets are located in five different states, but they have a lot in common. They’re in mid-sized cities, all of which have a population of less than 2.3 million. They are in states with relatively low income taxes, or no taxes at all. Its climate allows for outdoor activities all year round.

They are: Austin, Texas; Nashville, Tenn; Raleigh, NC; Salt Lake City; and Jacksonville, Florida.

To find areas with the strongest labor markets, the Wall Street Journal, which works with Moody’s Analytics, evaluated 300 metro areas. The rankings measured five factors: the unemployment rate, workforce participation rate, job growth, workforce growth, and wage growth in 2021. The average of these rankings was used to determine the hottest labor market in larger regions of the United States, with more than a million more Inhabitants, they are classified separately from the smallest.

All of the top five cities are home to large universities, state capitals, or high-tech employers. Florida, Texas, and Tennessee do not tax personal income, while North Carolina and Utah have income tax and corporate tax rates of 5% or less. Here are some of the other trends featured in the magazine’s fourth annual survey of the labor market.

Austin—a tech hub with a burgeoning restaurant and music—had the highest share of people working or looking for jobs and the highest employment growth on the payroll. It also saw strong wage growth. A number of companies, including software giant Oracle corp.

And Tesla, the electric car maker, moved its headquarters to Austin during the pandemic. The Internal Revenue Service is also hiring more workers there.

medium strength

Most of the job markets in the hottest large cities in 2021 were metro areas closer to the population of one million between the large and small city classifications.

Where metro areas are rated as medium-sized

Metro areas between 1 million and 2.5 million people

metro areas between 1 million

And 2.5 million in population

metro areas between 1 million

And 2.5 million in population

Strong labor demand is good for workers, but it is a challenge for employers to find employees in a range of sectors. Paige Ellis, a member of the Austin City Council, warned against public swimming pools May not be able to open This summer, if the city can’t recruit hundreds of lifeguards, it gave students free pizza to lure them at job fairs last month.

It’s a similar situation in Nashville. Waste Pro USA Inc. , a garbage transportation company operating in the Southeast, is currently offering a $2,500 retention bonus to drivers in Nashville. “We are now competing with delivery drivers, concrete drivers, dump truck drivers and roofers” because of the construction boom in Nashville, said Keith Panacek, chief operating officer.

Jacksonville jumped into the rankings in 2021, when it became the fifth hottest job market after being ranked 15th in 2020 and 27th in 2019.

During the pandemic, Albert Law, professor of economics at the University of North Florida, said the area has benefited from its position as a logistics hub with a seaport, two major interstate highways, railroads and airlines. It has also attracted jobs in healthcare, technology and financial services — “relatively high-paying jobs and this type of job has a very strong multiplier effect,” Dr. Luo said, helping to add jobs across the local economy. Data company Dun & Bradstreet Inc. said. Last year it will move its headquarters to Jacksonville, New Jersey.

The largest cities remained at the bottom of the rankings this year. New York ranked 41, Chicago ranked 40, and Los Angeles ranked 26.

Many workers have left major cities during the pandemic, looking for jobs they can perform remotely in smaller, more affordable areas in the South and West. This could be reversed, if more employers require in-person attendance and workers return to downtown job offices and sites.

big city fight

Big cities have seen a sharp rise in labor markets this year, but they are still low on the rankings.

Where it occupied the largest metro areas

Metro areas with a population of more than 6 million

Metro areas with a population of more than 6 million

Metro areas with a population of more than 6 million

Highly populated metro areas

from 6 million

Highly populated metro areas

from 6 million

Booming demand for recreational vehicles during the pandemic has made Elkhart, Ind. 1 job market among metro areas with a population of less than one million. The city considers itself the RV capital of the world, with Keystone RV company

, Jayco Inc. and Newmar Corp. Located in the area.

Provo, Utah, an emerging tech hot spot, ranked second in the ranking of smaller metro areas, followed by Fayetteville, Ark.which is located in an area that has promoted itself as a remote work hub with tax and cash incentive programs for expatriate workers.

Tourist hotspots rose significantly in the rankings in 2021, as domestic travel rebounded after the pandemic-related shutdown that decimated the leisure and hospitality industry in 2020. Miami ranked 18th, Las Vegas 30th and Orlando 37th. In 2020, they all ranked among the worst 5 market workers, based on revised 2020 data.

Metro areas with large tourism industries have seen wider job fluctuations in both service jobs and at scale during the pandemic.

Change in payroll from the previous year

For leisure and hospitality jobs

For leisure and hospitality jobs

For leisure and hospitality jobs

For leisure and

Hospitality Jobs

For leisure and

Hospitality Jobs

The wage recovery in tourism jobs contributed to wage growth in those cities by the end of 2021.

Change in average weekly earnings from the same quarter of the previous year

For leisure and hospitality jobs

For leisure and hospitality jobs

For leisure and hospitality jobs

For leisure and

Hospitality Jobs

For leisure and

Hospitality Jobs

Sean Snaith, an economist at the University of Central Florida, said “travel is back in force” since the spring 2020 recession. While millions of Americans lost their jobs early in the pandemic, the economy has rebounded quickly, with government stimulus and a rapid drop in unemployment bolstering consumer demand, including Including travel spending.

Several parks, concert venues and sports stadiums have lifted Covid-19 restrictions and capacity restrictions over the past year, encouraging Americans to travel. Earlier this month, Delta Airlines company

CEO Ed Bastian said the carrier is seeing high levels of sales activity and booking volume.

West Coast wages

California’s tech and entertainment centers dominate the rankings in one area: the fastest growing salaries. Of the 10 largest cities with the fastest wage growth in 2021, six were on the West Coast: San Jose, California, San Francisco, Seattle, Fresno, California, San Diego and Los Angeles.

Change in the first half of 2021 from the year prior to …

… CPI, by region

…Average weekly wages by metro area

Nationwide, prices have gone up 3.4%

… CPI, by region

…Average weekly wages by metro area

Nationwide, prices have gone up 3.4%

… CPI,

by region

… average weekly wages,

By metro area

Prices soared 3.4% nationally

… CPI, by region

Nationwide, prices have gone up 3.4%

…Average weekly wages by metro area

… CPI, by region

Nationwide, prices have gone up 3.4%

…Average weekly wages by metro area

Adam Cummins, director of regional economics at Moody’s Analytics, said that while rising wages is generally good news for workers, sharp increases in some West Coast cities reflect workers migrating to lower-cost areas. And in cities like San Francisco, the downturn in labor supply has prompted companies to make more generous offers to retain remaining workers, he said. This contrasts with developing cities like Austin, where wages are rising rapidly because businesses are moving there and creating new demand for jobs.

“I don’t think it’s necessarily a good thing for those economies,” he said. But from a strictly wage growth perspective, relatively few workers available would “help drive large wage increases”.

Brian Mina contributed to this article.

write to Harriet Tory at harriet.torry@wsj.com and Danny Dougherty at Danny.Dougherty@wsj.com

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