THE REST OF THE MAJOR CITIES
(FORTUNE Magazine) – ALBANY, NEW YORK -- Slow growth typical of older Northeastern cities, low unemployment, and the difficulty of getting anyone outside state government to move there may turn companies away from New York's capital. But excellent public schools -- test scores are well above average in both inner city and suburbs -- plus a highly rated state university and white-collar salaries among the lowest in the top 50 metro areas make the city worth a second look.
BALTIMORE -- Labor costs in Baltimore are near the national average but lower than in many Northeastern and Midwestern cities, making the area attractive if it's important to locate your business in the New York City-Washington corridor and gain access to a highly skilled labor force. Steady population growth is also a plus. Inner-city education continues to be a problem, with SAT scores trailing those in the suburbs by almost 200 points.
BIRMINGHAM, ALABAMA -- Steeped in the spirit of the Old South, Birmingham has high unemployment, low average salaries, and a low cost of living -- all potential attractions for an employer. But the population is among the least educated in the top 50 metro areas, with fewer than 70% possessing a high school diploma and only 16% with a college degree (vs. 20% for the nation). Slow population growth and poor marks for labor quality are other disadvantages.
BOSTON -- Full of the best and the brightest -- only Washington, D.C., has a greater percentage of highly skilled workers -- this remains an expensive place to live and do business, with white-collar salaries ranking fourth from the top. Weakness in the defense, high-tech, and real estate industries has loosened the tight labor market, but population growth is nil. The poor quality of inner-city education is another drawback for employers.
BUFFALO -- Despite a declining population and the highest net rate of out-migration from 1980 to 1988 of any of the 50 largest metro areas (8%), Buffalo is full of college students whose skills are waiting to be tapped. Above-average unemployment and many underemployed workers are other draws for prospective employers. Beware of higher-than-averag e manufacturing wages, though, and a work force that is almost one-third unionized.
CHARLOTTE, NORTH CAROLINA -- Developing into a financial services center and distribution hub in the Southeast, Charlotte has made a smooth transition from heavy dependence on textile manufacturing. Disadvantages: overall low unemployment and a tight market for hourly laborers, plus below-average school scores. But robust growth, low salaries, high quality of life, and a top-notch community college system should continue to attract companies.
CHICAGO -- Whose kind of town? Chicago is a slow-growing city that experienced net out-migration of nearly 4% from 1980 to 1988. Labor costs are high and so is union membership, giving companies seeking a Midwestern location reason to look elsewhere. The center city continues to struggle, as the low average test scores suggest. While unemployment is above average, companies surveyed rated labor availability lower than in other big cities.
CINCINNAI -- Breaking out of its industrial mold and building a service-oriented economy, Cincinnati offers low white-collar wages and a pleasant style of life. Although the proportion of highly skilled workers in the labor force is below the nation's average, employers say the prevailing work ethic is worth a lot. But don't disregard high manufacturing wages, relatively slow population growth, and discouraging inner-city test scores.
CLEVELAND -- The metro area's population is declining, and the number of 18- to 24-year- olds -- the labor force's seedlings -- is projected to dip more sharply here than in any other city but Pittsburgh by 1995. That's not surprising for a city with one of the highest net out-migration rates from 1980 to 1988. Test scores show the wide disparity between city and suburbs, but there's evidence of economic revival, and white-collar wages are low.
DAYTON -- A bustling blue-collar city where much of the work force is in automotive parts manufacturing, Dayton experienced net out-migration in the past decade but should have slow growth in the Nineties. While manufacturing wages are high, white-collar salaries are third lowest in the 50 largest cities. Schools are good, and as the economy shifts toward more service jobs, employers can draw on spouses at Wright-Patterson Air Force Base.
DENVER -- For business, Rocky Mountain high means a mixed bag of high salaries, high SAT scores, and lots of highly educated and skilled workers. The Denver economy hasn't fully recovered from the energy slump of the Eighties, unemployment is average, and labor quality received good marks in executive surveys. Despite slow growth, companies questioned rated the city tops in labor availability. A contender for the top ten.
DETROIT -- Like the auto industry that keeps its economy running, the city is in bad shape and a weak candidate as a place to start or relocate a business, despite sky-high unemployment. The inner city is a nightmare, with test scores far ) below those in the suburbs. A forecast of no population growth in the next five years offsets the low labor market stress index. Manufacturing wages are the nation's highest, fueled by the Big Three.
GREENSBORO, NORTH CAROLINA -- If you're looking for some of America's lowest labor costs, Greensboro might be the place. Students overwhelmingly go to public rather than private schools, but the education system is subpar, and a lower than average proportion of residents have high school and college diplomas. Employers rate their workers quite favorably. Unemployment is low, but strong population growth should replenish the labor force.
HARTFORD -- Smallest of the top 50 metropolitan areas, Hartford comes up short in benefits for business. Low unemployment and slow projected population growth mean the labor market is tight and likely to stay that way. The city has the smallest percentage of underemployed workers in the top 50. Wages are high, and 34% of the work force is unionized, compared with 24% on average for all 50 cities. Inner-city test scores are low.
HOUSTON -- The city continues to recover from the oil crunch of the 1980s, and the increase in jobs should greatly outpace labor force expansion as the revival progresses. That could produce a tight labor market; unemployment is above average and population growth slow. Despite the energy slump, wages have remained high in Houston, making the city attractive for workers who can take advantage of low housing costs.
INDIANAPOLIS -- This Midwestern capital is shifting smoothly from a manufacturing base to a more diversified, service-oriented economy. Labor in Indy is tight, with low unemployment, but moderate growth and the availability of workers from outside the metro area should ease the situation. A unified government helps narrow the gap between city and suburban education. The proportion of residents in college is lower than average.
KANSAS CITY, MISSOURI -- Employers like the Kansas City work ethic, and several regional and national companies have recently moved back-office operations there. K.C. also has a diverse manufacturing sector. Wages are about average, the population should grow steadily, and the cost of living is below the norm. The city is a rail transportation hub and has more than 200 flights daily. On the downside: City schools are far worse than those in the suburbs.
LOS ANGELES -- Bigger, in L.A.'s case, can mean better, if loads of available labor is what you need. America's largest metro area is one of the few where labor force growth is projected to exceed job increases. Continued strong growth in population, fueled by heavy immigration, plus layoffs in the defense and aerospace industries, makes for a loose labor market. But costs of living and labor are high, inner-city schools are weak, and air quality is poor.
LOUISVILLE, KENTUCKY -- A population that isn't increasing and a steep falloff in the number of 18- to 24-year-olds by 1995 could spell trouble even as Louisville sheds some of its blue-collar image and becomes more service oriented. Companies attract workers from outside the area. Attractions: low white-collar salaries and above-average suburban schools. But the proportion of high school and college graduates is below average, and manufacturing wages are high.
MEMPHIS -- Don't expect to find many highly skilled or highly educated workers here. But if you're looking for a city growing at a healthy clip with plenty of available labor and low manufacturing wages, this could be it. One of the largest wholesale and distribution centers in the South, Memphis is home to Federal Express. The cost of living is below the national average, and the proportion of workers who are unionized is small.
MIAMI, FLORIDA -- Not for everyone, Miami could be right for certain low-tech manufacturers or service providers. Only 32% of workers are employed in highly skilled jobs, the lowest proportion in all 50 areas, and manufacturing salaries are also the lowest of all 50. Heavy in-migration spurs population growth. Schools are a problem and crime rates high. The economy is increasingly dependent on foreign markets, especially Latin America.
MILWAUKEE -- Still thoroughly blue-collar, Milwaukee means making machinery and brewing beer. Manufacturing wages are above average, and the work force is highly unionized. As in other Midwestern areas with slow growth and low unemployment, the number of 18- to 24-year-olds will probably decline sharply. Mediocre test scores might benefit from a new state voucher program allowing students to select public or private schools.
NASHVILLE -- Country music fans may be drawn to the home of the Grand Ole Opry, but businesses face unpleasant music there: a tight labor market and an unemployment rate among the lowest of all 50 areas. Nashville's charms include low salaries, a below-average cost of living, and powerful population growth and in-migration. Competition for labor may intensify in the future, however, pushing up wages.
NEW ORLEANS -- Mardi Gras aside, New Orleans offers little to cheer about. The port city's economy has not fully healed from the energy slump. Unemployment is extreme and white-collar salaries are low; expect a sharp decline in new entrants to the labor force as out-migration erodes the population. Educational attainment is not high. Test scores are low, and the percentage of students attending public schools is the lowest of any in this group.
NEW YORK CITY -- If you have a choice, think twice before picking the Big Apple. Wages are America's highest, the crime wave continues, and inner-city education is a shambles. The city leads the nation in immigration but has the second-worst labor participation rate of all 50 areas (more a sign of social problems than job scarcity). Though considered a must location for certain professions, many professionals may leave if conditions don't improve.
NORFOLK, VIRGINIA -- A city whose star is rising, Norfolk can expect double-digit population growth that will expand the labor force faster than jobs increase -- a bonus for business. Norfolk's military bases mean a large number of spouses available for clerical work, and white-collar wages here are lower than in any place examined but Salt Lake City. The area's excellent quality of life is another reason companies should wake up and notice this sleeper.
ORLANDO, FLORIDA -- Increasing at a rate unmatched by any of the other 50 cities except West Palm Beach, Orlando's population is employed chiefly in services that revolve around the mass of tourists who flock to Disney World and other attractions. The economy is diversifying and booming, pushing wages up, but continued in- migration should keep salaries below average. Many residents are underemployed, another advantage for companies.
PHILADELPHIA -- Even with its serious fiscal crisis, Philly still stands out. The city has a large, well-rounded economy, and wages and other business costs are lower than in other major Northeastern centers. Slow population growth and low unemployment result in a slightly tight labor market. The city is trying to improve inner-city schools, which is a good idea -- fewer students attend public school here than in almost any city among the 50.
PITTSBURGH -- Pittsburgh has taken big steps toward becoming a high-tech center with the aid of Carnegie Mellon and the University of Pittsburgh, but out-migration continues as the economy struggles. The projected population decline over the next five years is the largest of any of the areas studied. As job expansion heats up, labor force participation may improve, mitigating the population loss. Attractions: cheap housing and good suburban schools.
PORTLAND, OREGON -- Packed with pluses, Portland ranks near the top. Beautiful natural surroundings, excellent public schools, a highly educated labor force with a strong work ethic, and wages close to or below average make this a smart alternative to California. The city's recent rapid growth has tightened the labor market. Manufacturing has tended to move with the cycles of the lumber and wood products industries and is dominated by a few players.
RICHMOND -- The labor outlook in Virginia's attractive capital is less than a knockout, despite projected population growth. Costs, especially manufacturing wages, are higher than in many Southern cities, and unemployment is among the lowest in the 50 areas. A high percentage of students go to the public schools, but the gap between city and suburban test scores suggests trouble. A low percentage of residents have high school diplomas.
ROCHESTER, NEW YORK -- With population not expected to increase, net out-migration, and low unemployment, Rochester resembles its New York brethren Albany and Buffalo. Manufacturing wages are among the highest in the 50 areas studied, thanks in part to large resident employers such as Eastman Kodak and Bausch & Lomb. The area is noted for corporate involvement in educational reform and for the top- notch quality of its highly unionized work force.
ST LOUIS -- A slow-growing city with a loose labor market, St. Louis is a major hub for transportation by air, water, and rail. Manufacturing wages are high, reflecting the industrial presence of McDonnell Douglas, General Motors, and Chrysler, among others. The contrast in quality between suburban and city schools is among the starkest in the U.S. Universities are a strong presence in the community, and the work ethic shines.
SAN ANTONIO -- If you can take the heat, take the bait San Antonio holds out: a plentiful supply of labor at low cost, one result of the highest unemployment rate of the 50 areas studied. Strong population growth should keep labor available. Residents overall are not highly skilled but could fit the needs of companies seeking nontechnical assembly or light manufacturing labor. Costs of living and housing are low, but the schools need improvement.
SAN DIEGO -- Growing in population even faster than Los Angeles, San Diego will likely add more workers than jobs in the next five years, easing the labor market. The economy, long reliant on the Navy and defense-related industries, is beginning to diversify. Quality of life is high, with beautiful beaches and an ideal climate. But take heed: Employers have been known to complain about the laid-back California work ethic.
SAN FRANCISCO BAY AREA -- Be prepared to pay dearly to do business by the Bay. Labor, if you can find it, is expensive, especially white-collar workers. The cost of housing is the highest in the 50 areas, with a four-bedroom home selling for $462,800, according to a recent study by Runzheimer International. But locate here anyway if you need particularly well-educated and skilled workers in a center of finance, high technology, and R&D.
SEATTLE -- Most of the good things you've heard are true. A large proportion of Seattle's growing population have a high school diploma (even more than in Salt Lake City), schools are superior, and workers are highly skilled. Labor is tight. Manufacturing costs are steep because of Boeing's dominant presence. But the economy is less dependent on the aircraft giant than it used to be and is diversifying into sectors like computer software.
TAMPA -- Another Florida growth powerhouse built on in-migration, Tampa is persuading businesses to locate offices here and take advantage of the lowest overall salaries in all 50 areas and an affordable cost of living. With over two million people in the metro area and an abundant labor pool augmented by lots of retirees, Tampa competes with Orlando to lure companies. And as in Orlando, the area's economy is driven by tourism.
WASHINGTON, D.C. -- The capital's problems extend to the labor market, which is tight in the inner city, where the population is diminishing, and also in outlying areas, even though population is increasing. Unemployment is the lowest of the 50 areas studied, and wages are high. Test scores show the contrast between city and suburbs. Washington's economy is diversifying away from government, and its overall work force is highly skilled and educated.
WEST PALM BEACH, FLORIDA -- People migrated here in the Eighties at a faster rate than in any other of the 50 areas studied, and the population should continue growing fast. Add that to unemployment that is already on the high side and a low labor market stress index, and consider the advantages. Nevertheless, some companies rate work force quality low. Also beware of high manufacturing wages, low school test scores, and a high crime rate.
CHART: NOT AVAILABLE CREDIT: Sources: Pop. and pop. growth -- National Planning Data Corp.; unemployment -- BLS; SAT/ACT scores -- local agencies and school districts; salaries -- Census Bureau CAPTION: NO CAPTION