The Anatomy of an Exceptional Job Market

With one of the strongest post-recession job markets in the country, Raleigh, North Carolina has a remarkable economic success story. The secret to Raleigh’s vibrant economy seems to be the city’s abundance of educated residents, with nearly half of the population over 25 holding a bachelor’s degree or higher. In urban economies, knowledge attracts more knowledge — and Raleigh has a home-court advantage as part of North Carolina’s Research Triangle which includes Duke University, the University of North Carolina at Chapel Hill, and North Carolina State University.

Beyond being exceptionally well-educated, there are other factors that have made Raleigh thrive in the wake of a recession.

How can we assess the economic health of this community (and our own)? We will examine Raleigh’s job market, assess the educational makeup of the city, and delve into the impact of density and demography. The goal of this article? Determine how Raleigh’s success can be reflected in every community.

What does a healthy economy look like?

High-level overviews of job growth alongside a geographic assessment of people’s access to jobs provides a useful picture of a city’s economic health.

Cities have a distinct advantage over smaller towns. Density is good for growth. Economists have found that density explains more of the productivity gap across states than education levels, industry concentrations, or tax policies. While density doesn’t guarantee economic growth, it does serve to facilitate interactions, promote market specialization, and increase geographic access to opportunity–which is essential to the health of America’s middle-class.

Access to Jobs, Access to Talent

The Employment Access Index and Labor Market Engagement Index are place-based measures that provide basic insight into the caliber and abundance of opportunities for both employers and job seekers. The Employment Access Index (in pink below) is a weighted measure that estimates residents’ access to the jobs in a region–providing insight into the relative ease of finding a job in the region. The Labor Market Engagement Index (in green below) provides a description of the relative intensity of labor market engagement and human capital in a neighborhood–providing insight into the relative ease or difficulty that employers experience in their talent search. The blue(ish) areas on the map reflect places where opportunities for both groups are highest in the City of Raleigh.

Opportunities for Job Seekers (Pink) & Employers (Green) in Raleigh

In Raleigh, it appears that job seekers may find it relatively easier to find work. It also appears that employers downtown enjoy a remarkable intensity of labor market engagement and density of human capital. Since there is a healthy supply of and demand for jobs, it is easy for the city to attract job seekers and employers.

The Geography of Opportunity

Local Job Density (pink) explains the distribution of opportunities throughout Raleigh, while Employment Diversity (green) indicates the diversity in available occupations for any given area. As shown in the map below, there are a lot of job opportunities in northern Raleigh, but the downtown area has the greatest diversity of occupation. Although there isn’t much job diversity outside of the downtown area, the mean commute time is only about 22 minutes, just shy of the 23-minute national average.

Distribution of Employment Opportunities (Pink) & Diversity of Available Occupations (Green) in Raleigh

Job Growth

Nationally, the unemployment rate rose from 5 percent in pre-crisis 2008 to 10 percent by late 2009, steadily declining to 7.3 percent by March 2013. As of February 2016, the unemployment rate is 4.9 percent and the nation has experienced 71 consecutive months of private-sector job growth.

Raleigh’s recovery from the recession has been remarkable, enjoying the addition of 71,000 new jobs predominately in tech, research, health, and education.

Number of Jobs Available in 2003 vs. 2013 in Raleigh by Industry

According to the editor of the Charlotte Business Journal, Raleigh experienced a 214 percent recovery rate. Currently, the city’s unemployment rate rests slightly below the national average at 4.7 percent.

Change in Jobs from 2002–2013

What impacts a local economy the most?

In any urban economy, education and immigration are key to short- and long-term growth.

Quality public K-12 education in a city helps the poorest kids successfully climb the economic ladder and raises wages by reducing competition for low-skilled jobs. Starting with a large proportion of college-educated workers leaves economies at an advantage, since college graduates tend to cluster together.

Immigration is also great for the urban economy, since migrants are twice as likely as native-born citizens to be entrepreneurs. Forty-percent of Fortune 500 Companies were started by first- or second- generation migrants and 28 percent of local ‘main street’ businesses were founded by an immigrant.

Education

In 2010, Raleigh had the 7th largest share of college graduates of any American city. The city has no trouble attracting well-educated residents and is remarkably young. It is also important to consider the state of Raleigh public schools in order to project the city’s long-term success.

Thirty-one percent of Raleigh residents are millennials and a remarkable 48 percent of residents are college-educated. Both are well above the national numbers–23.5 percent of the national population are millennials and just above 29 percent of Americans are college-educated. Of those with a bachelor’s degree in Raleigh, nearly 35,000 have a degree in Business, with nearly 15,000 in both Education and Engineering.

The map below indicates areas where there are high concentrations of millennials (green) and college-educated residents (pink). The blueish areas highlight places where both are prominent. The orange dots on the map pinpoint college campuses in the area.

Total Population of Millennials (Green) & Percent of College-Educated Residents (Pink) in Raleigh

Educational Overview of Raleigh

Raleigh’s public schools earn a School Proficiency Score of 59 — ten points above the national score of 49. Raleigh is an exceptionally well-educated city with relatively good schools, so we can expect the city to retain its educational health in the long-term as well as the short-term. Nevertheless, there is room for growth. People born out-of-state tend to earn more in Raleigh than their North Carolinian counterparts and improving public schools is critical to closing that gap.

Educational Profile of Raleigh, NC

Diverse Demography and Economic Health

Socio-cultural diversity within a workplace has been proven to strengthen a company’s collective problem-solving skills and lead to higher profits–immigration is consistently shown to benefit the urban economy.

Nevertheless, there is often an opportunity gap between white, male, native-born job-seekers and female, minority, and foreign-born job-seekers. Does an opportunity gap exist in Raleigh?

Median Household Income in Raleigh ($60,573)

The gender wage-gap persists nationwide and Raleigh is no exception. Women’s median earnings in the city are $29,966 while men’s median earnings are $35,643–a $5,677 disparity. This disparity is actually less pronounced than the national average, where women’s median wages are $7,904 lower than men’s.

There is also a wage disparity between foreign born workers and workers born within the United States. Foreign born workers average a median income of $20,439, North Carolinians average a median income of $28,966, and Americans born in other states earn a median income of $36,404.

First generation migrants make up 13.3 percent of Raleigh’s population and their educational attainment levels vary significantly. This benefits Raleigh’s economy, since migrants are able to fill unpopular low-skilled jobs as well as jobs requiring a graduate education.

Planning for Economic Prosperity

Raleigh’s vibrant economy can be attributed to its density of opportunity, remarkably well-educated population, and proximity to anchor institutions.

Density facilitates interaction and innovation. Planners can continue to encourage dense residential and professional growth in the city. Since college-graduates tend to earn more, have lower-divorce rates, and fewer single-parent households, those traits also trend in cities where graduates cluster.

Critics believe that North Carolina’s economy as a whole is fragile and would not survive another recession. During the recession, the state reduced unemployment benefits, food assistance, and funding for education–all of which serve to stabilize the economy. Unfortunately, more than half of the jobs created in North Carolina are in sectors that don’t pay a living wage.

Even in regions of statewide uncertainty, cities can protect their economic health by improving schools, encouraging college-attendance, building denser neighborhoods, and welcoming a diverse population. While the data serves to help us understand our local economies, the best path forward will be foraged by a combination of visualized data and local expertise.

Interested in the state of your local economy? Request a free interactive economic overview here.

About the Author: Michelle Stockwell studies Politics at Hendrix College in Arkansas.