Nashville, Tenn.

Photo via Nashville Tourism

5 Cities Where Successful Wage Growth Is Happening

The rest of the country might learn something from these on-the-rise metropolises.

For several years after the 2008 market crash, the economic recovery was seen only in corporate earnings statements and consistent job reports. Family paychecks, meanwhile, didn’t keep pace. Average hourly wages rose at an anemic 2 percent from 2010 to 2014 — and that’s not accounting for inflation. Worse, US workers’ pay had lagged behind other indicators for nearly a decade, the result of bloated executive salaries, global outsourcing of jobs and capital investments in mechanization.

But in the last two years, that dynamic has begun to shift. Unemployment bottomed out at 4.6 percent last year (down from a high of 10 percent in 2009), meaning businesses needed to pay more to recruit and retain employees. Last October, wage growth hit a high of 2.8 percent nationwide.

In which cities has the average worker seen the biggest comparative bump in pay, as measured by higher wages and more work hours? (Hint, three are in blue states, two in red, and not one can claim more than a million residents.) Donald Trump’s 2016 victory in the Electoral College revealed the regional inequities, between the coast and the heartland, that divide our country. As a way to bridge those separations, NationSwell dug into the data to find out what drove better pay in these metro areas, offering five methods for the next administration to consider.

Hot-air balloons soar above Balloon Fiesta Park during the Albuquerque International Balloon Fiesta. Photo by A. Messerschmidt/Getty Images

5
Albuquerque, N.M.

Population: 559,121
Wage growth in 2016: 5.70%
Average weekly pay: $745, up from $703

Statewide, New Mexico’s economy has struggled to make a comeback. At the end of 2015, the Land of Enchantment logged 17,300 fewer non-farm jobs than in pre-recession 2007. But after taking a years-long beating (including more than a doubling in meth overdoses), the state’s biggest city, Albuquerque, is starting to show signs of progress.

Historically, the city has relied on federal spending for a slew of jobs at Sandia National Laboratories, which focuses primarily on weapons, and Kirtland Air Force Base. If President Trump pumps money into defense, the city will likely be a prime beneficiary. But reliance on public dollars “is not a growth industry,” noted Jim Peach, a New Mexico State University economics professor, last year.

To capitalize on government investment, the city is trying to establish the high desert as a hub for science and technology companies. They’re sharing technical discoveries from the national labs (and the state university’s flagship campus) with local small businesses. And they’re also hoping to attract more semiconductor manufacturers near Intel’s chip-making facilities in Rio Rancho, a half-hour drive from downtown. The high-paying jobs in those sectors could power Albuquerque back into full recovery.

The new U.S. Bank Stadium in Minneapolis will host the Super Bowl next year. Photo courtesy of the Minnesota Vikings

4
Minneapolis–St. Paul, Minn.

Population: 711,790
Wage growth in 2016: 5.97%
Average weekly pay: $998, up from $938

In February 2018, Minneapolis will play host to America’s most watched televised event: the Super Bowl, to be held at U.S. Bank Stadium. (St. Paul will host an accompanying winter carnival, featuring a gigantic ice palace, to draw spectators across the river.) The NFL’s imprimatur is just the latest sign that businesses are increasingly eyeing the Twin Cities for development opportunities. “The number one thing is that people who make decisions for business now have a much more positive view of Minneapolis, and look at us for business expansion,” said Mayor Betsy Hodges, according to the Minneapolis Star Tribune.

To prep for the crowds who’ll be streaming into town to watch football, the city is also shoring up a shopping district in the city center, which has been battered by competition from suburban malls and online retailers. At the moment, a Macy’s department store is the last remaining anchor, but a $50 million revival plan for Nicollet Mall promises to make it a “must-see destination in downtown,” said David Frank, the city’s planning and economic development director.

All that new business means more workers are making more money, thanks to a red-hot 3 percent unemployment rate and a recent change in state law. Last August, a raise in Minnesota’s minimum wage went into effect. At $9.50 an hour for large employers, the hike lands the state near the top of guaranteed minimums. And as debate over a citywide standard of $15 per hour becomes the defining issue of this year’s mayoral campaign — Mayor Hodges recently flip-flopped her position to support the wage bump — compensation seems likely to continue trending upward.

A view of downtown Charlotte, N.C. Photo by Craig Jones/Getty Images

3
Charlotte, N.C.

Population: 827,097
Wage growth in 2016: 7.94%
Average weekly pay: $983, up from $905

If the number of new housing units rising across this Southern city is any indicator, people desperately want to move to Charlotte. At the beginning of last year, construction had begun on more than 12,300 units, and another 13,500 more were planned. The buyers? Foreign-born immigrants who’ve made a home in the New South, young millennials (including Villanova grads) who’ve found plenty of jobs to be had in Charlotte’s banking and advanced manufacturing sectors, and former exurbanites moving back to the city core.

“During the Great Recession, the sprawling developments in the exurbs ground to a halt,” Brian Leary, president of a local development firm, told Curbed. So those people moved closer to the central business district and the expanding light-rail system. “People are craving connectivity to each other and experiences, and those places that can deliver the most experiences in an accessible way can command premiums and value over time.”

Charlotte won that appeal despite the controversy over H.B. 2, the so-called “bathroom bill” that forces trans people to use facilities that match the gender on their birth certificate. The state law, which was drafted in response to a local anti-discrimination ordinance in Charlotte, led to boycotts and unknown quantities of lost revenue. A new governor could overturn the controversial legislation, which in turn could accelerate new business.

Nashville, Tenn., is internationally renowned for its music scene. Photo by Jim Nix/NomadicPursuits.com

2
Nashville–Davidson, Tenn.

Population: 654,610
Wage growth in 2016: 10.07%
Average weekly pay: $904, up from $812

Another Southern city growing at breakneck speed, Nashville has capitalized on its reputation as a destination for creatives to attract newcomers. Seeking out the city’s robust music scene, tourists continue to stream into Nashville. For 70 months in a row, the hordes of visitors broke records for nightly hotel stays; by the end of the rush last October, Nashville set an all-time record, beating out Houston’s 59-month streak. “We have music, a cool brand, Music City Center and Opryland,” plus two convention centers, Butch Sypridon, CEO of Nashville Convention and Visitors Corp., boasted to The Tennessean.

Now that the city is expanding, officials are moving to the next checklist item they must fulfill to stay on an upward trajectory: luring high-wage employers — an important task, given that Tennessee has no statewide minimum wage. To do so, Nashville is trying to keep as many Vanderbilt alumni in town as possible, while also welcoming foreign immigrants.

The population is there to make Nashville a major economic powerhouse, if the city can attract the right firms. ”If we didn’t have 1,500 people moving to town every month, we won’t have the job growth that we’re having,” said Ralph Schulz, the Nashville Area Chamber of Commerce’s CEO. “Before you had to have the jobs and the population came. That’s not the case anymore. Now it’s workforce, then jobs [follow].” If job openings outpace new residents, expect wages to rocket even higher.

West Loockerman Street in Dover, Del. Photo via Wikipedia

1
Dover, Del.

Population: 37,522
Wage Growth in 2016: 14.05%
Average Weekly Pay: $764, up from $656

Perhaps the most unexpected entrant on the list, the tiny town of Dover, Delaware’s state capital and second largest city, recorded the largest percentage jump in wages in the nation. The payoff is the result of a 10-year comprehensive plan Kent County officials laid out in 2007, which emphasized attracting new companies without losing the area’s farmland and rural charm.

One of the biggest boons to Dover’s economy has been the aviation industry, anchored at Dover Air Force Base. Taking advantage of the military’s need for supplies, the state is building an Air Cargo Ramp that can accommodate large civilian carriers, about the same size as four Boeing 747 planes. The city has also been aided by expansions at several factories, including bra-producer Playtex and food giant Kraft, and a surge in entrepreneurship; in 2015, the dollars loaned to small businesses statewide shot up 156 percent.

On top of that, Dover punches above its weight in attracting some 2 million tourists annually, generating half a billion in revenue countywide. Visitors are drawn by state parks, casinos, NASCAR races and music festivals, like the 80,000-attendee Firefly. “I met a fairly new resident of Kent County a few weeks ago who lives in one of our newer housing developments,” Cindy Small, Kent County’s tourism director, told the local paper. “She mentioned that out of 30 or so homes, 28 of them have been purchased by non-Delawareans. You can bet they were visitors first. They came, they experienced; they relocated.”

It should be noted that Dover’s wages at the beginning of 2016 were, by far, lowest among the top five performers, making it all the easier to notch big gains among its small population. But the town did so even after Delaware upped the state’s minimum wage to $8.25 an hour in June 2015. Even after the change, this booming town’s average pay has continued to rise, perhaps fueled by a still relatively cheap cost of living and an influx of consumer spending.

Chris Peak is a staff writer for NationSwell. He previously worked for Newsday, the San Francisco Public Press and the Point Reyes Light. Contact him at [email protected]