The Best Cities for Getting a Pay Raise

Texas Department of Public Safety Cpl. Arminda Henke meets with Sgt. 1st Class Christian Garcia at the Hiring Heroes Career Fair at Joint Base San Antonio.
Texas Department of Public Safety Cpl. Arminda Henke meets with members of the armed forces like Sgt. 1st Class Christian Garcia at the Hiring Heroes Career Fair at Joint Base San Antonio, Sept. 18, 2012. (Deyanira Rossell/Joint Base San Antonio photo)

Despite the gloomy economy and bleak job outlook, there are scattered cities where wages are rising and the number of jobs is increasing. Washington, D.C., and several parts of Texas top the list, but cities as far apart as Anchorage, Alaska, and East Baton Rouge, Louisiana, continued to experience job and wage growth at the end of last year, according to Bureau of Labor Statistics (BLS) data.

More recent regional data collected by pollster Gallup also showed bright spots, said Dennis Jacobe, Gallup's chief economist. "Our numbers are showing the job picture is best in the South," he said. "Conditions in the Midwest, which is a terribly depressed area, seemed to have stabilized some, and the West is having a hard time."

Measuring local job-market conditions can be tricky, said David Hiles, BLS branch chief. If you look solely for rising wages, you might find them in a county where layoffs have pushed lower-paid, less experienced workers from the market. In those cases, the remaining workforce may have a higher average wage.

That may be the case in Boise, Idaho; Fort Myers, Florida; Las Vegas; Phoenix; and Stockton, California, which saw average wages rise by about 1.6% to 2.6% in the first quarter of 2009 while total employment fell, according to the Brookings Institute's MetroMonitor report, which tracks the economic health of America's 100 largest metropolitan economies.

Twin Signs of Economic Recovery

To find real economic recovery, look for areas with both rising wages and an increasing number of jobs, Hiles suggests. Among the 10 largest counties by employment in the U.S., only Harris County, Texas, posted positive results in wages and job growth in the last quarter of 2008 -- a gain of 2.6% in wages and 1% in employment.

However, if you look at the BLS list of the 335 largest U.S. counties by employment, the counties with rising wages and job growth are:

  • Alaska: Anchorage
  • Illinois: Peoria
  • Iowa: Linn
  • Kansas: Sedgwick, Shawnee and Wyandotte
  • Louisiana: Calcasieu, East Baton Rouge, Lafayette and Orleans parishes
  • New York: Kings
  • North Carolina: Cumberland
  • North Dakota: Cass
  • Oklahoma: Oklahoma
  • Pennsylvania: Butler and Washington
  • South Dakota: Minnehaha
  • Texas: Bell, Bexar, Brazoria, Collin, Denton, Fort Bend, Harris, Hidalgo, Jefferson, Lubbock, McLennan, Montgomery, Nueces, Potter, Smith and Webb
  • Virginia: Alexandria, Arlington and Loudoun
  • Washington: Yakima
  • Washington, D.C.
  • Wisconsin: Winnebago

Raises Ahead for Workers in These Cities

While the BLS and MetroMonitor look at the past, one forward-looking survey from the WorldatWork human resources professional association predicts employers will still hand out raises to lots of employees in 2009.

Its survey of about 2,600 human resources professionals at companies employing about 16 million people ranked the 25 largest metro areas based on planned salary increases for employees with average performance ratings.

WorldatWork says at least 75% of companies in these cities planned to give raises ranging from 2.1%-2.3% this year (listed from highest raise percentage to lowest):

  • Washington, D.C.
  • Tampa
  • Boston
  • Philadelphia
  • Denver
  • Chicago
  • Cincinnati
  • Dallas
  • New York
  • Baltimore

In spite of falling payroll budgets, the survey shows employers are committed to awarding raises to about eight in every 10 of those employed in the top 10 cities.

"This may come as a surprise to many, given that one in three survey respondents indicated they are planning zero percent salary budget increases this year," said Alison Avalos, research manager for WorldatWork. "Layoffs, hiring freezes, shifting pay-increase dollars from executives to staff and other cost-saving actions may be allowing employers to continue planning for at least some pay increases for remaining employees, especially top performers."

Workers in some cities may even see salary increases in 2010 that are higher than the national average, according to a survey of 1,156 organizations conducted by Hewitt Associates, an HR consulting company.

Those cities include Houston (3.4%), Minneapolis/St. Paul (3%), Washington, D.C. (3%) and Des Moines, Iowa (2.9%). The cities projected to have the lowest increases in 2010 are Detroit (2.1%), Los Angeles (2.2%) and San Francisco (2.4%).

"Regional salary increase trends are largely driven by factors, including economic conditions, demographics and market issues, so it's not surprising to see lower-than-average salary increases in ... cities with high unemployment levels or that have been significantly impacted by the economy," said Ken Abosch, leader of Hewitt's North American Broad-Based Compensation Consulting business.

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