We took a deep dive into management occupations—including top executives and managers of all types of employees—to get a sense of where these higher-wage jobs (paying $43 an hour, $4 above computer and math-related jobs) are heading. The picture shows considerable change. Taking the pulse since 2010 shows San Francisco and San Jose ranking first and third, respectively, in growth. But if we look at 2016-2017, the picture changes, with again the momentum weakening, particularly in San Francisco, which dropped from first in growth to a still-respectable 12th.
Who’s gaining? For the most part, it’s smaller, less-costly Sun Belt locations. Nashville and Las Vegas topped our list, but Phoenix, Atlanta, Salt Lake City and Jacksonville all made the top 10. Tech region standbys like Portland and Seattle are also increasingly outperforming other elite economies such as New York, Los Angeles and Boston by a wide margin.
These patterns are, if anything, more pronounced when we turn to financial management and general business operations services, as opposed to top management. Here it’s Orlando in fourth place since 2010, in first last year, with other Sun Belt cities, including Jacksonville, Raleigh, Las Vegas, Austin and Charlotte, in the top 10. Although it placed second, Silicon Valley retained an impressive five percent growth. San Francisco fell from fifth to 22nd, while most other superstars are actually falling below the national average.
The Blue-Collar Boom
Whether due, at least partially, to President Trump’s policies, blue-collar America faces its most enviable situation in years. Wages are rising for lower-income workers for the first time in decades. Manufacturing employment, which flattened in the last year of President Obama’s term, has picked up, adding 1.2 million jobs since 2010 and 400,000 since November 2016, enjoying its best growth since the mid-1990s. Even retail, a big employer of blue-collar workers, has expanded. Critically, incomes are up for the lower deciles of the labor force, including youth.
One sign of a blue-collar resurgence: the most serious labor shortages tend to be in fields that suffered heavily in the recession, such as personal service, transportation, production and construction. We zeroed in on production workers like welders, machinists, fabricators and plant managers. This part of the economy has been traditionally concentrated in the “Rust Belt” along the Great Lakes but is now spreading to other parts of the country. Grand Rapids, the leader in this category since 2010, still held a respectable 11th place. Detroit, the epicenter of industrial America, did better, securing a strong sixth-place finish, adding 2.3 percent to its already large manufacturing work force.
The biggest growth, however, is now largely in the Sun Belt, as evidenced by the presence of No. 1-ranked Nashville, which added 3.9 percent to its industrial workforce last year. Other Sun Belt cities in the top 10 include Las Vegas, Jacksonville, Orlando and San Antonio, all emerging industrial powers. In contrast, many Northeast and West Coast areas saw a loss of jobs for production workers in the last year, including Seattle, Chicago, Los Angeles, San Diego, Philadelphia, New York and Boston.
Rust Belt cities may benefit from these trends. Although many places are declining, some are seeing millennial migration, as well as the greatest growth in seniors. Since 2010, notes demographer Wendell Cox, Indianapolis, Des Moines, Kansas City and Columbus have all enjoyed higher rates of millennial population growth than New York, Chicago, Boston, San Jose, San Francisco or Los Angeles.
What the Future Portends
Given uncertainty around interest rates, the stock market, high-tech regulation and trade policy, it is not easy to predict the exact shape of the future. But the data seems to indicate a shift in the basic economic structure. Places like Silicon Valley, Seattle and Portland will continue to dominate in the high tech and some business service fields, but their growth rates appear to be slowing while new players emerge in both the less costly Sun Belt and a select Midwestern markets like Columbus, Kansas City and Cleveland.
At the same time, there are big increases in fields that pay wages that will allow a middle-class lifestyle in a less expensive areas but would leave a family near poverty levels in New York, Los Angeles or the Bay Area. After adjusting for cost-of-living using the C2ER index, places like Minneapolis, Kansas City, Detroit, Columbus, Raleigh and Cleveland move into the top 10 for median wage.
Ultimately, this pattern is being reflected in migration out of California and the Northeast towards the Sun Belt and a few Midwestern cities. These are also the areas that are showing the slowest decline in fertility, an issue that impacts both family migration and, in the long-term, the future of the job market.
The talent challenge may be shifting from luring workers from elite colleges toward developing local resources that emphasize the kind of specialized technical training needed locally. In many places, these programs—both in the high schools and community colleges—were scrapped in favor of a concentration on four-year degrees. But some areas are now taking steps to correct these deficiencies by linking local high schools and technical colleges using a career academy model. Close to 30 percent of all computer-oriented jobs, what could be called “new-collar” jobs, do not require a four-year degree, notes a recent Brookings study.