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Five Best Cities for Wage Growth

Five Best Cities for Wage Growth

By Susan Johnston, PayScale.com

Although the recession brought stagnant (and in some case, shrinking) wages to many companies, pay freezes are beginning to thaw and signs of recovery are finally in sight for many workers.   

In fact, The PayScale Index, a study of changes in wages for full-time, private-sector employees, identified the five top metro areas where pay increased in Q4 of 2011 compared with Q4 of 2010. But unlike past years, when there were clear winners and losers, PayScale analytics manager Katie Bardaro says she's seeing flat or positive pay growth -- as opposed to declining wages -- virtually across the board. "Pay is moving up much slower than it dropped down, but we're encouraged by the fact that things are getting better slowly," she says.

According to Dindy Robinson, director of compensation at Texas Christian University in Fort Worth, the top five cities share a few common traits. "The key thing to all these cities has been a lot of diversification," she says. "They haven't focused on one thing, and they've made a concentrated effort to create jobs."

Here's a look at the five metro areas with the highest wage growth according to The PayScale Index, along with a discussion of the factors driving the area's success. Also included is a job in one of the area’s leading industries along with the current salary for that job in that metro area.

1. Houston
Q4 YOY Wage Growth: 2.2 Percent

Although Houston's economy has traditionally centered on oil and energy, that's no longer the case. "They've been moving away from being a one-industry town to going more into international commerce and freight transportation," Robinson says. In addition to diversifying, the city has beefed up education and created many cross-industry partnerships, she says. One such partnership, which connected social services agencies with the city’s port authority and chamber of commerce, revitalized the community, which helped create jobs and boost salaries, Robinson says. The work has apparently paid off, putting Houston at the top of The PayScale Index.

Petroleum engineer salary: $120,600

Search for jobs in Houston.

2. Miami
Q4 YOY Wage Growth: 1.8 Percent

"Miami is one of those cities that has been one step forward, two steps back," says Bardaro. "But they've finally taken two steps forward, and I think it's driven by the fact that some of their industries are travel for the everyday person and trade with South America, two industries that saw a big bump this last quarter." The city is also branching out into biotech and has revitalized several of its neighborhoods.

Aircraft mechanic salary: $44,900

Search for jobs in Miami.

3. Chicago
Q4 YOY Wage Growth: 1.7 Percent

Chicago's new mayor Rahm Emanuel has made job creation a priority, but the Windy City is also a major transportation hub, which has helped spur the economy. "Nearly all the railways in the United States go through Chicago [and] you have a major international airport,” Robinson says. The city has also built up its banking sector and made a huge effort to attract industry, she says. Bardaro points out that in addition to transportation, Chicago has plenty of social science, economic and political science research organizations.

Pricing analyst salary: $51,600

Search for jobs in Chicago.

4. Washington, DC
Q4 YOY Wage Growth: 1.7 Percent

Not only is Washington, DC, a center for politics and government, but it's also a busy deep-water port. "They've just completed a huge infrastructure project in which they revitalized their main DC port," Robinson says. "And taking the same approach as Houston, they have spent a lot of money on beefing up their community development and tying that in with jobs."

Economist salary: $87,800

Search for jobs in Washington, DC.

5. Seattle
Q4 YOY Wage Growth: 1.6 Percent

A few years ago, when the local Boeing plant cut thousands of jobs, "everyone thought Seattle was going to dry up and blow away," Robinson says. Instead, the city went after international business. Seattle is ideally situated for that, because it has a major port and serves as the primary access point for people traveling to and from Asia and Alaska from the continental US. Hiring sprees by major technology employers like Microsoft and Amazon have also helped spur Seattle's recovery, adds Bardaro.

Software developer salary: $86,700

Search for jobs in Seattle.

Source: All salary data is provided by PayScale.com. Salaries listed are median, annual salaries for full-time, private-sector employees with five to eight years of experience, and include any bonuses, commissions or profit sharing.
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