Categories
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.

Categories
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.

Categories
Data Releases

San Francisco again outpaces the field

San Francisco was the top performing large county economy for the second quarter in a row in 2019Q3, according to new data from the Bureau of Labor Statistics published today.

Year-over-year employment growth in San Francisco in September was 3.5%, up slightly from 3.4% in June. Davidson County (Nashville) was second again, at 3.4%. Rounding out the top five were Wake (Raleigh) at 3.3%, Maricopa (Phoenix) at 3.2%, and King (Seattle) and Travis (Austin) tied at 3.1%. Overall performance among large counties of 500,000 or more jobs was unchanged from 2019Q2, but there were fewer counties with net year-over-year losses in 2019Q3. We should not make too much of quarterly movements given the likelihood of BLS revisions to the data when the full year is available. That said, it appears job growth accelerated in Raleigh and Dallas in 2019Q3 and slowed in Las Vegas and Atlanta.

San Francisco retained its pole position in wage growth among large counties, as well, but it didn’t quite reach the milestone I discussed in November with the 2019Q2 release. The average weekly wage in San Francisco in 2019Q3 was $2,273, up 7.6% on a year-over-year basis, not adjusted for inflation. The average weekly wage in San Francisco was 93% of the average weekly wage in Santa Clara County, which is the narrowest gap for Q3 dating back to at least 2001 (it was 78% as recently as 2011). So we’re not there yet, but the day is coming soon.

Rounding out the top five for wage growth were Hamilton County (Cincinnati) at 6.4%, Wake (5.3%), Denver (5.1%), and Dallas and Tarrant (Fort Worth) tied at 4.9%. Travis (Austin) was next at 4.8%. Davidson (Nashville) was down the list a bit at a very healthy 4.1%.

Interesting side note for the Silicon Valley watchers to keep an eye on: The only large county with a net decline in the average weekly wage in 2019Q3 on a year-over-year basis was Santa Clara (-0.3%). That is the second quarter in a row finishing in the bottom two of the ranking.

Again, not to make too much of it until the revision is out, but notable that the average weekly wage was growing faster in areas of the country like Cleveland and Detroit than it was in Silicon Valley last year.

Next update with 2019Q4 will be on May 20.

Categories
Data Releases

Raleigh economy continues hot streak

For the second month in a row Raleigh, NC, is the fastest growing job market among large metropolitan areas, according to new data released today by the Bureau of Labor Statistics.

Year-over-year job growth in Raleigh was 3.7% in December, ranking first among metropolitan areas with employment of 500,000 or more. Raleigh finished the year with a net gain of about 23,000 jobs, pending a revision to the estimates expected next month by BLS. Rounding out the top five large metros were: Austin (3.5%), Dallas (3.4%), Orlando (3.3%), and San Antonio (3.2%). Nashville was at 1.7%, up by about 18,000 jobs on the year, pending the revision.

There were three large metros posting declines in December: Grand Rapids, Hartford, and Memphis.

At the state level Utah led the way in December at 3.3%, followed by Arizona (2.9%), Idaho (2.9%), Texas (2.7%), and Washington (2.5%). Wyoming, West Virginia, Vermont, and Oklahoma were in negative territory in December for the second month in a row.

Categories
Data Releases

Health care added nearly $11 billion to Nashville economy in 2018

The health care industry added nearly $11 billion to Nashville’s economy in 2018, according to newly available county-level statistics from the Bureau of Economic Analysis (BEA).

Nashville’s health care industry accounted for $10.996 billion in value-added to Davidson County’s gross domestic product (GDP) in 2018, according to my analysis of BEA’s data, or about $1.50 out of every $10 in total economic value. Health care is 15.3% of total GDP in Davidson County, which ranks first among the largest 100 county economies in the U.S., followed by Bronx (15.1%), Nassau (14.8%), and Kings (13.0%) in New York.

Health care’s inflation-adjusted growth rate of 2.8% in 2018 trailed the Nashville economy overall (4.6%), but the industry’s real value has more than doubled since 2001. Of counties with a health care industry valued at $10 billion or more, only Maricopa, AZ (Phoenix), and Santa Clara, CA, surpassed Davidson’s real growth rate (105%) during 2001-2018.

County-level GDP data is an important milestone for federal statistics programs, especially for counties, like Davidson, belonging to very large metropolitan statistical areas (MSAs), where parsing county-level trends is difficult. Jobs data has been available at the county level for a long time but provides only one indicator of local economic activity. Analysts have been lobbying for publicly available, county-level GDP data for quite some time.

So, on behalf of local analysts and economic developers everywhere, thanks to BEA for this important contribution to our understanding of local economies.