College seniors are graduating to an improved jobs outlook: Employers plan to hire 11% more college graduates from the class of 2016 than they did for the class before, according to the National Association of Colleges and Employers.
But location can play a huge role when these new graduates are ready to launch their careers. In some cases, they’ve got to be willing to move to a place where they have the best chance of snagging their dream job.
NerdWallet analyzed the 100 largest U.S. cities and ranked them according to the places that provide the best environments for college graduates who are just starting out. Our analysis focused on 2014 U.S. Census Bureau data covering job options, the age of the population, rent costs and median earnings, as well as December 2015 unemployment rates from the Bureau of Labor Statistics.
Where are the jobs? Arlington, Virginia, stands out in our analysis because 67.1% of its workforce find jobs in management, business, science or the arts. These fields have the most jobs that require a bachelor’s degree or higher.
Will you thrive or struggle to pay your bills? Our analysis favors cities where you can make a living without spending an outsized portion of your paycheck on rent. Minneapolis and Atlanta, for example, offer solid local economies and affordable housing. Even pricier cities such as Arlington, its neighbor Washington, D.C., and San Francisco made our top 10 list in part because median earnings in those areas are higher, which helps offset steep rents.
Where should you look for jobs? Don’t limit your search to the big cities on both coasts. Our analysis found that Austin, Texas, Madison, Wisconsin, and Minneapolis each had an unemployment rate of 3.1% in December 2015. That’s lower than other cities in the top 10 and well below the national average of 5% for the same month.
Best cities for recent grads 2016
1. Arlington, Virginia
If you’re looking to live near other educated people, this Washington, D.C., suburb is the place to be. A whopping 71.5% of Arlington’s 25-and-older population holds at least a bachelor’s degree, the highest percentage on our list. Arlington also is tops for the number of jobs in management, business, science or arts occupations, as well as for salaries. The median annual earnings of $72,406 for a worker 25 and older with a bachelor’s degree is up from $64,957 in our 2015 analysis of the best cities for recent grads. However, if you move here, be ready to give up a big chunk of your salary for housing. The median rent is one of the highest among the 100 cities in our analysis, and it would take up nearly a third (31.4%) of that paycheck.
2. Madison, Wisconsin
Wisconsin’s capital is a place where new grads will be surrounded by peers. About a quarter of the population (24.7%) is in the 20- to 29-year-old range, likely thanks in part to the University of Wisconsin-Madison. Of the 100 cities analyzed, only Norfolk, Virginia, and Boston have a higher percentage of 20-somethings, and only by a fraction of a percent. Madison has worked to attract these young people with a boom in high-density apartments downtown, according to the Capital Times.
3. Washington, D.C.
Here’s one reason the nation’s capital has made our list four years in a row: jobs. In Washington, D.C., 60.5% of the workforce found jobs in management, business, science or the arts. Of the 100 cities analyzed, this figure is third only to its neighbor, Arlington, and Irvine, California. About a quarter (26%) of employees work for the federal, state or local government, according to the U.S. Census Bureau’s American Community Survey.
Boston residents ages 20-29 make up 24.8% of the population. Of the 100 cities analyzed, only Norfolk, Virginia, edges out Boston in the number of residents in this age group. The Boston area’s universities, such as MIT and Harvard, have an impact on the median age of the population and the local economy, since the academic institutions serve as employers and a source of talent for the city’s tech industry.
Here’s one perk to choosing the Midwest over a coastal city: You get to hold onto more of your paycheck when it comes to rent. Of the cities in our top 10, Minneapolis residents pay the least in rent as a percentage of their income. Although the median annual earnings in Minneapolis ($46,837) are lower than in most other top 10 cities, median rent costs are also low — accounting for 22.4% of income. Minneapolis in December 2015 had a 3.1% unemployment rate, which is among the lowest in our analysis.
New grads flocking to Seattle will likely meet plenty of other educated residents. Nearly 59% of Seattle’s 25-and-older age group holds at least a bachelor’s degree, third only to Arlington and Irvine in our 100-city analysis. Median earnings are around $57,000. The Puget Sound region, which is home to Amazon, Microsoft and smaller tech companies, could be the ideal spot to put your degree in engineering, computer science or a related field to use.
Young adults make up 24% of the population in Steel City. According to New York Times research, Pittsburgh’s population of college graduates ages 25 to 34 grew 29% from 2000 to 2012. Compared with other cities on this top 10 list, Pittsburgh’s job market for degree holders isn’t as strong, with about 45% of jobs available in the fields of management, business, science or the arts. However, residents here benefit from a low cost of living. Rent, on average, in Pittsburgh is lower than in any other city in the top 10 and about $1,000 less per month than in Arlington.
8. Austin, Texas
Austin’s vibrant entertainment scene, hip vibe and University of Texas campus aren’t the only features luring new graduates to the city. Jobs help draw them in, too, and the Austin metropolitan area added 34,900 net new jobs from December 2014 to December 2015, according to the Texas Workforce Commission and the U.S. Bureau of Labor Statistics. That’s a job growth rate of 3.8%, which is one of the highest among large metro areas, the Austin Chamber of Commerce reports. In December 2015, the unemployment rate in Austin was 3.1%, one of the lowest rates in our analysis — and below the 5% national average for that month.
College graduates in Atlanta, whether they’re newcomers or fresh from the city’s many universities, enjoy a lower cost of living than in most other cities on our list. Here, the median annual earnings for a resident 25 or older with a bachelor’s degree are $50,420, and rent runs at 22.9% of the median income, one of the lowest percentages in the top 10. In terms of jobs, recent grads may find opportunities at Atlanta’s 13 Fortune 500 headquarters, such as Home Depot, UPS, Coca-Cola and Delta Air Lines. In 2015, Atlanta was home to the third-highest concentration of Fortune 500 companies in a city.
10. San Francisco
This city’s relatively low unemployment rate (3.9% in December 2015) helped it make our list’s top 10. College graduates working in San Francisco make good money. The median annual earnings of residents age 25 and older with a bachelor’s degree are $68,439, which is one of the highest of all cities in our analysis. Of course, living in San Francisco means a bigger portion of your paycheck will go to your landlord, with 27.8% of median earnings going to rent.