Transfer over, New York and San Francisco, the US’s main job hubs at the moment are cities like Charleston and Hilton Head, South Carolina

A new analysis from the Economic Innovation Group finds that the cities that were once employment superpowers no longer hold that title. Instead, “for the first time since the Great Recession, the richest metros are no longer creating the majority of new jobs in the U.S.,” noted August Benzow, research director at EIG and author of the report.

While coastal centers like San Francisco, New York, Los Angeles, Seattle and Boston used to create jobs at a much faster rate, Sunbelt metros like Gainesville, Georgia and Hilton Head Island in South Carolina are now leading the way in job creation.

Cities in the Midwest and inland Northeast, including Wenatchee, Washington, and Lansing, Michigan, are also experiencing stable job growth rates, in part due to their relatively cheap real estate prices, the EIG analysis found.

The trend is only about a year old, but it is part of a shift that began with the pandemic's geographical realignment and has only continued as the cost of living rises in the most expensive cities. And it shows once again how the American economy is moving south and center – away from the previously dominant coasts.

The analysis found that cities with the lowest average wages are seeing the fastest job growth. This is partly because the cost of living in these cities is lower due to lower housing costs as large coastal cities have become increasingly unaffordable.

“Employers track where people want to live and where they can afford it,” Benzow said. However, he added that some employers are proactively moving to cheaper regions, not only to follow the workforce but also to save money on office space and take advantage of other financial incentives.

A slowdown in the tech sector is helping drive this job reallocation, according to EIG. But a similar shift is occurring across a variety of industries. “These sectors tend to be pretty closely linked. If you have more professional services jobs in one place, you tend to get more retail and other service jobs,” Benzow said. The job data is based on the employer's location and not the employee's place of residence. Therefore, this data does not capture remote workers who live in one location but are technically employed in another location.

The EIG analysis is the latest data point to show how the hiring market is changing as 2020 progresses. A Gusto analysis of over 30,000 small and medium-sized businesses using its payroll platform found that between the pre-pandemic period, that is, from January 2018 to March 2020, and more recently, from April 2022 to As of December 2023, hiring rates in smaller and medium-sized cities have increased. At the same time, major coastal cities such as New York City, Los Angeles and Seattle saw their hiring shares decline. This is another sign that the aftereffects of the pandemic's major economic and geographical reordering are still being felt.

“Some of it is justified, some of it is not, but I think they are no longer viewed as the most desirable places in the country in the same way that they were before the pandemic,” Benzow said.

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