Cities With the Most Productive Workers

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April 28th, 2022

Despite the challenges that COVID-19 created for the U.S. economy over the last two years, recent months have shown major signs of positive economic news. The U.S. Bureau of Economic Analysis estimated that GDP increased by 7% in the final quarter of 2021, an impressive figure, especially given a concurrent spike in COVID cases at the end of last year. And while inflation has been a significant pressure on many households' finances, workers in almost every industry have seen wage growth since COVID-19 began.

The Productivity Wage Gap

The simultaneous increases in economic productivity and wages are particularly noteworthy because of the increasing gap between these two statistics in recent years. From 1948 to around 1980, total economic productivity and worker compensation for non-supervisory positions grew at roughly the same pace: over that span, economic productivity increased by 113% and compensation grew by 102%. Since the beginning of the 1980s, economic productivity has continued to grow steadily, but wage growth has not kept up. From 1980 to 2000, real wages were almost completely stagnant, and while compensation has increased more since 2000, the rate of wage growth lags behind the rate for productivity. In 2020, economic productivity had seen a cumulative 253% increase since 1948, while real wages were up only 144% over that span.

A significant portion of the gap between productivity growth and wage growth can be attributed to advances in computing, automation, and other technologies in recent decades. While these advances have provided many benefits to the economy, the gap between productivity and wage growth is closely related to rising levels of economic inequality in the United States. It's necessary to note that rapidly growing industries have seen more proportional wage increases, even as other fields continue to stagnate, suggesting workers in more productive fields are significantly better off. Yet in many cases, economic productivity that is not translated into increased compensation is likely to be retained by a business's executives or shareholders.

…in many cases, economic productivity that is not translated into increased compensation is likely to be retained by a business's executives or shareholders.

GDP skewed by location

These disparities also emerge according to geography. Certain locations have clusters of businesses in fields with high growth in productivity, such as finance and banking in the New York City metro, or tech in Silicon Valley. As businesses and industries in these major locations continue to grow, their success provides the conditions and resources for continued expansion, which attracts even more human capital and productivity growth within these limited number of locations.

Thus, many coastal states are the leaders in economic productivity on a per capita or per worker basis. The state with the highest annual GDP both per worker and per capita is New York, which of course houses many of America's largest banks and financial firms. Other high-ranking states include Washington, which is home to tech giants Amazon and Microsoft; Massachusetts, which has a strong biotechnology sector and many finance and insurance firms; and California, which hosts many of the largest and fastest-growing tech companies in Silicon Valley. At the metro level, the major cities in states like New York, Seattle, Boston, San Jose, and San Francisco are at the top of the list for economic productivity.

Since the beginning of the 1980s, economic productivity has continued to grow steadily, but wage growth has not kept up.

The data used in this study is from the U.S. Bureau of Economic Analysis. To determine the locations with the most productive workers, researchers at HireAHelper calculated the total annual gross domestic product (GDP) per worker. In the event of a tie, the location with the greater per capita GDP was ranked higher. All statistics are from 2020, the most recent year of data available.

Here are the metropolitan areas with the most productive economies.

Large Metros With the Most Productive Workers and Economies

15. Charlotte-Concord-Gastonia, NC-SC

14. Cincinnati, OH-KY-IN

13. Baltimore-Columbia-Towson, MD

12. Houston-The Woodlands-Sugar Land, TX

11. San Diego-Chula Vista-Carlsbad, CA

10. Chicago-Naperville-Elgin, IL-IN-WI

9. Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

8. Los Angeles-Long Beach-Anaheim, CA

7. Hartford-East Hartford-Middletown, CT

6. Washington-Arlington-Alexandria, DC-VA-MD-WV

5. Boston-Cambridge-Newton, MA-NH

4. New York-Newark-Jersey City, NY-NJ-PA

3. Seattle-Tacoma-Bellevue, WA

2. San Francisco-Oakland-Berkeley, CA

1. San Jose-Sunnyvale-Santa Clara, CA

Detailed Findings & Methodology

The data used in this study is from the U.S. Bureau of Economic Analysis. To determine the locations with the most productive workers and economies, researchers calculated the total annual gross domestic product (GDP) per worker. In the event of a tie, the location with the greater per capita GDP was ranked higher. All statistics are from 2020, the most recent year available. Only locations with at least 100,000 residents were included. To improve relevance, metropolitan areas were grouped into population cohorts: small (100,000–349,999), midsize (350,000–999,999), and large (1,000,000+).