The Californians Are Coming, the Californians Are Coming

Receptions can be frosty in Portland, Seattle, and, increasingly, Austin, but nobody has absorbed transplants from California quite like Las Vegas and Reno.

One out of ten California residents moving to another state in 2011-2018 relocated to the Las Vegas or Reno areas–about 270,000 in all–according to my analysis of IRS migration data. Las Vegas and Reno combined for nearly three times the number of Californians moving to the Seattle area and more than four times the Austin area.

Here are the top twenty destination counties for people leaving California, ranked by the number of exemptions claimed on tax forms, which we can use to estimate the number of people, with the usual caveats:

Of course, many of the counties at the top of that list are heavily populated and we would expect to see large numbers of people moving to them from California and everywhere else. It’s interesting, but not too revealing, given places like Chicago and New York are on it. California license plates don’t stand out in Chicago like they do in Portland.

So, here’s another look comparing the number of people moving from California to the total residential population of the destination county, in effect, identifying places where transplants might be more conspicuous:

Several smaller counties are on this list–Mohave, Yuma, Onslow, Yavapai, etc.–which I assume must have something to do with snowbirds or retirees and military bases. However, many places are on both lists, such as Reno, Las Vegas, Boise, Austin, Honolulu, Portland, Seattle, and Phoenix. Prime destinations for Californians, nominally and relatively.

The influx of Californians to the Reno area is remarkable. The population of Washoe County is only about 472,000, much smaller than most of the other leading counties on the first list.

Data Releases

15 Markets Tech Recruiters Should Be Watching

Approximately 148,000 software developers were employed in the San Francisco-Silicon Valley corridor in 2019, according to new data from the Bureau of Labor Statistics, representing about one out of every ten software developers employed in the U.S.

The highest-earning developers in San Francisco and Silicon Valley are now commanding wages above $200,000 (top 10%), average home prices are north of $1 million, and average rents are well above $3,000 per month. As a result, companies have been expanding footprints in other markets and some key investors have turned their attention and their money to the “rise of the rest.” But where should they look?

As noted in our earlier look at musicians, the BLS data covers full-time and part-time employees; self-employment could increase these figures considerably. That said, of the thirty metro areas with 10,000 or more employed software developers in 2019, the greatest concentrations of jobs were found in the San Jose metro area, with a location quotient of 7.50, followed by other well-established tech hubs in Seattle (3.72), San Francisco (2.78), Raleigh (2.34), Washington DC (2.32), Austin (2.28), and Boston (2.06).

We are all familiar with those leading tech regions by now from reading the ubiquitous best-of lists. Still important to keep track of as regional analysts or chamber of commerce employees, but well covered ground. So, let’s play recruiter. Many recruiters have access to sophisticated data platforms (Indeed, Emsi, etc.) for “real-time” analytics on labor supply and demand conditions based on company job postings and candidate resumes, but publicly available data can yield valuable insight, too.

To demonstrate, let’s start by filtering the BLS data as follows:

  • 10,000 or more employed software developers (30 markets)
  • LQ of 1.10 or greater (i.e. 10%+ more concentrated than U.S.)

My thinking here is that most recruiters probably have a threshold for critical mass. Our threshold of 10,000 is likely too small (or considered too small) to draw attention from many larger tech firms or recruiting agencies, but let’s go with that to see if it reveals any smaller areas that are flying below the radar. Let’s also abide by the rules of economic clustering and assume that the knowledge spillovers in markets with greater concentrations provide workers with skill advantages. Again, our threshold of 10% is probably too low, but let’s be conservative.

Now, as for pay, most regional comparisons would look at differences in average or median wages to get an idea of the “typical” worker. But let’s assume our Silicon Valley-based client is scouting locations for a satellite office and wants to know what to expect in wage demands from the highest-earning developers in other markets.

So, one more filter:

  • The high end of the wage scale for developers (BLS publishes the 90th-percentile wage) must be at least 20% lower than the 90th-percentile wage for developers in Silicon Valley.

Applying those filters, here is the list that emerges:

Indianapolis, Tampa, and St. Louis are not far behind, each with more than 10,000 employed developers, but a LQ of less than 1.10.

Some of these smaller and/or overlooked markets for tech talent may be dominated by one or perhaps a few larger employers, but they are worthy of closer examination if you are in the market for developers.

Data Releases

Sorry, Austin: Nashville Is the Real Music Capital

We can quibble about the “live” portion of Austin’s moniker, but when it comes to the concentration of musicians, agents, and related industry jobs, there is no debating it: Nashville is the music capital of the U.S.

According to new data from the Bureau of Labor Statistics (BLS), approximately 1,800 musicians and singers, or about one out of twenty in the U.S., were employed in the Nashville metro area in 2019, ranking third nationally. More musicians and singers were employed in New York (6,700) and Los Angeles (3,500), as you might expect given the size of those markets. But the greatest concentration, relative to how many musicians and singers are employed nationally, is found in the Music City. Musicians and singers are six times more concentrated in Nashville compared to the U.S., a location quotient of 6.34, for the economists. It’s less than half that in New York and Los Angeles.

The BLS data compiled from payroll records includes full-time and part-time workers. Self-employed musicians and singers might increase the total in Nashville by thirty percent or more.

Here’s the same table for agents and business managers, although BLS does not release full data for Los Angeles, presumably the top market, for what must be a confidentiality issue (i.e. if one company accounts for too large a share of all employees in the occupation).

Complete list of occupations for Nashville is linked here. Austin is linked here.


Coronavirus: Here’s what declining airline revenues could mean for state economies

While we wait for news on a financial assistance deal for the airlines I decided to model what the latest estimate from IATA Economics and others–a roughly 20% revenue decline for the year–would look like for states and metros with significant concentrations of jobs and economic activity in the airline industry. As you might guess, it’s not pretty.

The Scheduled Passenger Air Transportation industry (just passengers, no freight, for this exercise) contributes $124 billion to U.S. GDP and employs nearly 450,000 workers, according to Emsi, a labor market analytics firm. Average earnings per worker ($113,000) are very high, which means these jobs are critical drivers of other jobs in the labor market (i.e. a large multiplier effect). That’s great for the purpose of economic development in good times but can be catastrophic when that industry hits a down cycle. Current times certainly qualify.

Using Emsi’s model of the national economy, an estimated 20% decline in sales would result in losses of about 96,000 jobs and $10.7 billion in earnings in the Scheduled Passenger Air Transportation industry. Total losses to the U.S. economy would be nearly 928,000 jobs, $58 billion in earnings, and $12 billion in federal, state, and local tax revenue.

Here’s how the estimated 20% sales decrease could impact states with significantly larger concentrations of jobs in the industry compared to the U.S. economy as a whole:

Approximately two-thirds of job losses in the industry would happen in those fourteen states.

Metropolitan areas with major hubs, such as Atlanta or Chicago, would absorb most of those employment and earnings losses, of course, and the impacts would be dramatic. Projected employment declines in the New York, Chicago, Dallas, and Atlanta metropolitan areas would top 30,000, each. State and local tax revenue decreases would range from about $257 million in the Atlanta metro area to $479 million in New York. Places like Miami, Denver, Seattle, Minneapolis, and Charlotte would also be hit hard.

There are apparently several scenarios being discussed right now in terms of a rescue strategy for the airlines, and I’m sure the industry experts will continue to adjust their forecasts as new information is available. I’ll update this post as I see new estimates released. Also, please get in touch if you would like results (or other scenarios) for states or metropolitan areas I did not mention here.


Coronavirus: Restaurant closures could cost Nashville 12,000 jobs

This is going to be a moving target, but we are starting to get an idea of how to quantify some of the impacts of the coronavirus on Nashville’s restaurant industry. Preliminary estimates show that Davidson County’s restaurant industry could lose more than 9,000 jobs and $245 million in earnings resulting from the coronavirus shutdown. The total economic impact could reach 12,000 jobs and $420 million in earnings across the Nashville economy, if a recent industry forecast proves accurate.

The National Restaurant Association sent a letter to President Trump and members of Congress on March 18 estimating that a three-month closure of restaurants due to the coronavirus could result in a twenty-five percent decrease in industry sales and a total economic impact of $675 billion, including up to seven million jobs lost.

Restaurants contribute about $1.5 billion and nearly 36,000 jobs to the Nashville economy, according to Emsi, a labor market analytics firm. Let’s assume the economists at the National Restaurant Association are on target and we can apply their national forecast to the local industry in Nashville with a reasonable degree of accuracy. Based on my analysis using Emsi’s data, here’s what a 25% decrease in sales at restaurants in Davidson County would look like:

  • $732 million decrease in sales
  • $245 million decrease in earnings
  • 9,100 jobs lost

Total impacts on the local economy:

  • $420 million decrease in earnings
  • $62 million decrease in state and local taxes
  • 12,000 jobs lost

I don’t think the National Restaurant Association’s analysis includes bars. A similar decrease of 25% would result in losses at local bars of about $40 million in sales, 700 jobs, and $22 million in earnings. The total impact of restaurant and bar closures on the Davidson County economy would be about 12,900 jobs, $451 million in earnings, and more than $64 million in state and local taxes.