New York offers the worst cost-of-living tradeoff of any major city for new college grads. Starting salaries go further in these 14 metros.
New graduates' salaries go the furthest in Austin and Atlanta, but more of them are still moving to New York.
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- New graduates in Austin, Atlanta, and Houston earn the highest cost-of-living-adjusted starting salaries, per Gusto.
- New York City attracts the largest share of new grad hires despite offering a smaller adjusted salary.
- More Americans are migrating South for better cost-of-living and job opportunities.
Recent college graduates are flocking to New York City for their first jobs, but their degrees may go the furthest in Texas or Georgia.
New data from small business payment platform Gusto reveals new grads in Austin, Atlanta, and Houston have the highest cost-of-living-adjusted starting salaries when factoring in housing and other expenses.
Though New York City accounts for nearly 10% of new grad hires — the largest share of all the major cities — its adjusted starting salary gives a new grad half of what they'd earn in Austin.
The report used real-time data from over 300,000 businesses that use Gusto and defined "new grads" as full-time salaried employees aged 20 to 24.
Between April 2023 and March 2024, new graduates in Austin earned an average of over $58,000 in cost-of-living-adjusted dollars, given the city's slightly below-average cost of living compared to the national average. New grads in Atlanta earned an adjusted $57,500, while Houston grads earned $56,250.
New York City, comparatively, came in at less than $28,500, well below the next-highest city on the list, Washington, DC, at $40,800. New York City's cost of living is over 125% more than the national average, meaning a salary of over $61,100 gets reduced by over half. Boston and Los Angeles were also at the bottom of the list, given living costs nearly 50% higher than the national average.
While recent graduates were most likely to flock to cities like New York City, Los Angeles, and San Francisco to start their careers, cost-of-living challenges may eventually push them South, to cities like Austin and Atlanta, where the Gusto report found salaries go the furthest. It's a decision many Americans have made in recent years.
Between July 2022 and 2023, Florida, Texas, and South Carolina were the three fastest-growing states by population in the nation, per the Census Bureau. Over the past year, BI has spoken with several people who've moved to the South — better weather, lower cost of living, and ample job opportunities were among the reasons they said they did so.
The Gusto report also found that new grads are also less likely to be remote workers compared to millennials — 21.5% of those aged 20-24 compared to 29.6% of those 30-39. Many recent grads are choosing to work full-time at the office for additional networking and mentorship opportunities. That tracks how different generations view in-office time: Younger and older workers tend to go into the office, while the workers in the middle — millennials — are pushing the continued remote work boom.
But even as younger workers may find themselves stuck in cities with a higher cost-of-living, those jobs represent opportunities that have become harder to come by in the last few years.
It comes as higher-wage, white-collar workers see their own brutal job market. Gusto said that hiring was "frantic" in 2021 and 2022, the peak years of the Great Resignation and firms beefing up headcounts; last year, though, hiring fell "sharply." Now, that new grad hiring rate has stabilized — which isn't necessarily all bad news, but simply just shows how trends have changed from the frenzied firms trying to staff up, no matter what it took, to being a bit more measured.
Are you a new grad trying to stretch your paycheck in any of these cities? Contact these reporters at jzinkula@businessinsider.com, nsheidlower@businessinsider.com, and jkaplan@businessinsider.com.