Thoughts on Location

Does location matter?  It depends on what you are seeking.  If economic opportunity is your yardstick, here are some interesting statistics.

Greater New York City generated $1.5 trillion in GDP for 2014.  Greater Los Angeles provided $0.8 trillion; greater Chicago $0.6 trillion; greater Houston and greater Washington, DC $0.5 trillion each; and greater Dallas, San Francisco, Philadelphia, and Boston $0.4 trillion each.  The total US GDP for 2014 was $17 trillion.  New York City generated roughly 10% of this, and these nine metro areas generated over one third of the country’s GDP.

Most of the government research-funding agencies are in Washington, DC, as are many foundations.  A large percentage of research-funding foundations and potential Fortune 500 sponsors are in New York City. The top five homes of Fortune 500 companies include California (54), Texas (52), New York (47), Illinois (33), and New Jersey (28), accounting for almost half of the Fortune 500.  New York and New Jersey account for 16% of the Fortune 500.

High tech cities, ranked by numbers of jobs, are San Jose (Silicon Valley), Seattle, Boston, Washington, Los Angeles, Dallas, San Diego, Orange County, New York, and San Francisco.  Silicon Valley once dominated in IT related jobs but has been losing jobs as companies migrate.  The majority of aerospace and defense companies are on the West Coast – Arizona, California and Washington — although their headquarters have migrated to the east, mainly to Washington, DC, but also Chicago.

In the Sun Belt, Atlanta companies include AT&T Mobility, Coca-Cola, Delta Airlines, Home Depot, NCR, Newell-Rubbermaid, Southern Company, Turner, and UPS.  These companies are focused on transportation, supply chain and operations issues.  Dallas companies include Advance PCS, Dean Foods, ExxonMobil, Kimberly-Clark, Neiman Marcus, Southwest Airlines, and Texas Instruments, a quite diverse mix.  Houston companies include Phillips 66, Conoco Phillips, Sysco, Halliburton, Baker Hughes, and Marathon Oil, obviously reflecting a strong energy sector.  Charlotte is the second largest banking center after New York City.

Multiple healthcare providers are in all major cities. The top ten cities for healthcare employment, in rank order, are Houston, Philadelphia, Baltimore, Boston, Milwaukee, Denver, Fargo (ND), New York, Cleveland, and Norfolk.  Healthcare is the largest employer in Pittsburgh.  Seven of the 25 largest employers in New York City are healthcare providers.

The essential tradeoff is economic opportunity versus cost of living.  The Cost of Living Indices for each region’s major cities are shown below.  The average index nationally is set to 100.  A major contributor to high or low values is the cost of housing.

  • Northeast: New, York (Manhattan, 217; Brooklyn, 182; Queens, 159), Hoboken (183), Washington (140), Boston (133), and Philadelphia (127)
  • West Coast: San Francisco (164), San Jose (156), Orange, County (146), Los Angeles (136), San Diego (132), and Seattle (121)
  • Midwest: Chicago (117), Minneapolis (110), Denver (103), Salt Lake City (101), Kansas City (98), Cincinnati (94), Pittsburgh (92), and St. Louis (90)
  • Sun Belt: Miami (106), Phoenix (101), Raleigh (98), Atlanta (96), Charlotte (93), Houston (92), and Dallas (92).

Clearly, the large Sun Belt cities offer jobs and low costs of living, with a major contributor being significantly lower costs of housing.  The Northeast and West Coast have lots of job opportunities but are very expensive places to live.  The Midwest is closer to the Sun Belt in costs, but not in terms of job opportunities.

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