Saturday, June 14, 2008

Business Week touts Houston

Some great stuff in here. Hat tip to Mark for the heads up.

BusinessWeek
Are You in the Best City for Your Job?
A high salary goes only so far if the cost of living is even higher. If you want your dollar to go further, maybe it's time to relocate

Friday June 13, 8:08 am ET
By Prashant Gopal

Elizabeth A. Campbell was happy with the job offer from a top Houston law firm, but she wasn't itching to leave the comfortable life she had built for herself and her two teenage boys in suburban New Jersey. Other than a detour to Michigan for law school, she was a lifelong Northeasterner.

Campbell drew up a table of the pluses and minuses of relocating. On the plus side: more affordable real estate, no state taxes, cheaper food and services, an international airport, and strong schools and sports programs. Only one minus: saying goodbye to friends and family.

It has been almost a year since Campbell joined Houston's Andrews Kurth law firm as a partner and chief diversity officer, and the angst is long gone. She sold her 2,800-sq.-ft. house in Bordentown, N.J., for $350,000 and upgraded to a 4,200-sq.-ft. place on a golf course with five bedrooms and a game room six miles outside Houston. The price: less than $325,000.

Houston Is Rolling in Oil

"The bottom line was: 'How come I didn't live here already?'" Campbell said. "I came here because of a job. But it's a wonderful city, and I can see myself retiring here."


Only a few years ago, Houston was reeling. The implosion of Enron in 2001 had sandbagged the local economy, and the mood was grim. But that seems like a long time ago now. The explosion in energy costs has boosted the city's oil- and natural gas-fed economy, which is home to ExxonMobil and Royal Dutch Shell, as well as Waste Management, KBR, and many more. Job seekers in all sorts of careers have started streaming into Houston, where the unemployment rate was 3.8% in April, the lowest level in eight years, and where the job growth rate was 2.8%.

Businessweek.com worked with Seattle's Payscale.com to determine where the best and worst cities are for 20 common careers and found that -- when it comes to earning a comfortable living -- Houston it at or near the top for most jobs, from human resources manager to graphic designer
. We adjusted the median compensation for jobs in each of the top 25 big-city metros for cost of living. Houston, Dallas, and Charlotte, N.C., rose to the top for many of the jobs because they're affordable cities with competitive salaries. New York, San Francisco, Washington, Los Angeles, and Boston, which have some of the highest salaries, sank to the bottom because residents there pay through the nose for real estate, parking, groceries, and almost everything else.

...

Barton Smith, a professor of economics at the University of Houston who summers in Colorado, towed his favorite 1987 Dodge Colt Vista station wagon back to Houston one year because it would have cost him more than twice as much to replace the engine in Colorado, he said.

"The real wages in Houston adjusted for cost-of-living differences are relatively high because cost of living is low," Smith said. "It's not just housing, but housing gets a lot of attention."

I've said it before and I'll say it again: a strong, high-wage economy combined with affordability is the foundation of real quality of life. Many other things certainly matter too, but that's the critical core.

Update: Here's the link to the story at Business Week (instead of Yahoo) and the slides/data by profession. Thanks Erik.

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3 Comments:

At 2:39 PM, June 14, 2008, Anonymous common_sense said...

Not sure what you mean by "real" quality of life. I can only suspect you mean more material things, which isn't always the case.

But yes Houston does well at promoting jobs in this economy (isn't a surprise given the price of oil). But Houston is also very anti-cyclical. We tend to do a lot better when other places do a lot worse. Maybe that is part of the reason people have such a negative view of Houston.

Anyway, I am the first to admit that the price of oil is not going anywhere anytime soon and it almost certainly isn't going to go back to 1990's levels...but...Houston cannot rest on its laurels. It needs to use this time of plenty to prepare and invest for the future when, like it or not, times are going to tighten. That means MORE investment in transportation now when we can afford it given Houston's woeful transportation infrastructure for a city of its size. That means looking for ways to diversify the economy now to soften the future fall. And that means working to encourage more young professionals to start their careers in Houston rather than coming later after they have thrown in the towel elsewhere.

 
At 4:47 PM, June 14, 2008, Anonymous Neal Meyer said...

Tory,

Just to let you know, Dr. Smith told us (or I should say all six of us) in Econ 4377 / Urban Economics that story about towing the his vehicle from Colorado to Houston.

In reality though, what we were actually discussing that day was not how cheap Houston was. What the topic was really about was the agglomerated economies of scale offered by urban areas and how the competitive pressures they generate often bring down prices for many goods and services for urban residents. Smith put up some equations on the board to demonstrate the idea and we also poured over data regarding the subject, both of which we had to cite later on in exams.

Neal

 
At 9:28 PM, June 14, 2008, Blogger Tory Gattis said...

common_sense: it's not just material things. When your income is high relative to your expenses, you also have less stress and more free time for vacation, hobbies, the arts, culture, meditation - whatever your preference. Some of the worst quality of life is when you spend every waking moment trying to make ends meet.

But I definitely agree with you that Houston should be using the good times to make good long-term investments in infrastructure, education, and other quality-of-life amenities.

And thanks for the insightful anecdote, Neal.

 

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