The Best Cities for Riding Out a Recession

By Prashant Gopal

Where the Jobs Are

Worried about the future? You're not alone but it doesn't mean you're going to have start loading the family up in a truck and go pick grapes in California like John Steinbeck's Joad family in The Grapes of Wrath. What it does mean, though, is that even in a recession some communities will fare better than others. And it's not necessarily just the rich ones. What will be most important will be to find communities where the local economy will be relatively unscathed. That means that in the near term people who work in critical fields such as health care and education are likely to enjoy greater job security than those who work in sectors such as financial services or construction. That does not mean these communities will be recession-proof, but it does mean they may be hurt less than others. So where are these communities? Read on to find out.

Editor's Note: The job data for each town was provided by Claritas using U.S. Census Bureau employment categories. Towns that had populations of less than 200,000 and unemployment rates of more than 6.1%, such as Bakersfield, Sacramento, Fresno, and San Diego, were not included in the list. The metro area unemployment rate is a preliminary estimate for August from the Bureau of Labor Statistics. "Professional, Scientific and Technical Services" includes legal services, accounting, tax preparation, bookkeeping, and payroll. Data for some strong sectors such as energy were not available, or were part of broader categories that included significantly weak sectors. The weak economy is expected to damage all sectors, but the list is meant to highlight places that are buffered by relatively strong industries.

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Arlington, Va.

Share of jobs in strong industries: 49.4%
Number of workers: 119,222
Metro area unemployment rate: 4.3%
Agriculture jobs: 0.16%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 20.25%
Education jobs: 6.91%
Health-care jobs: 5.53%
Public Administration (Government) jobs: 16.6%

Arlington, located across the Potomac River from Washington, has a highly educated populace, many of whom work for the federal government or in lobbying and legal jobs. Only 7% of the residents are in the vulnerable financial, real estate, and insurance sector—about half the percentage in financial centers such as Jersey City, N.J., (outside Manhattan) and Charlotte, N.C., home of Wachovia and Bank of America.

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District of Columbia

Share of jobs in strong industries: 46.9%
Number of workers: 265,059
Metro area unemployment rate: 4.3%
Agriculture jobs: 0.08%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 14.02%
Education jobs: 9.35%
Health-care jobs: 8.57%
Public Administration (Government) jobs: 14.92%

Government is the dominant industry in the nation's capital, which fills up each day with lawyers, lobbyists, legislative aides, and journalists. D.C. could feel the impact of shrinking tax revenues in a weakened economy, but the damage likely won't be as severe as it might be in cities dependent on retail, banking, and other industries. The city could also benefit by being home to major educational institutions such as Georgetown University and American University. It's also a major tourist destination and might continue to draw foreign tourists attracted by the weak dollar.

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Durham, N.C.

Share of jobs in strong industries: 45.5%
Number of workers: 103,331
Metro area unemployment rate: 5.4%
Agriculture jobs: 0.23%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 9.09%
Education jobs: 14.11%
Health-care jobs: 17.96%
Public Administration (Government) jobs: 4.16%

Durham, home of Duke University, is part of the world-famous Research Triangle, along with Raleigh, the site of North Carolina State University and Chapel Hill, home of the University of North Carolina. The residents of Durham will have significant protection in a recession. It's a college town that's close to other economically vibrant college towns and is commuting distance to state government jobs in Raleigh, the state capital. The Durham area also has six hospitals and the Research Triangle Park, the largest research park in the world.

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Madison, Wis.

Share of jobs in strong industries: 44.8%
Number of workers: 131,165
Metro area unemployment rate: 3.6%
Agriculture jobs: 0.47%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 8.10%
Education jobs: 17.32%
Health-care jobs: 12.39%
Public Administration (Government) jobs: 6.60%

Madison, the Wisconsin state capital, is dependent on two strong employers: the University of Wisconsin at Madison and the state government. The city's economy has remained strong despite the economic downturn. Many of the city's other employees are involved in biotech and the medical fields: two industries that will likely bear up well in a recession.

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Boston

Share of jobs in strong industries: 42.5%
Number of workers: 263,097
Metro area unemployment rate: 4.5%
Agriculture jobs: 0.10%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 10.49%
Education jobs: 11.11%
Health-care jobs: 15.70%
Public Administration (Government) jobs: 5.13%

Boston's residents work in a variety of resilient industries, including education, health, and law. The Boston area is home to world-class universities with massive endowments, including Harvard and the Massachusetts Institute of Technology. It also has many large hospitals. The city, however, has plenty of finance, retail, and hospitality jobs that could get hit in a downturn.

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Pittsburgh

Share of jobs in strong industries: 41.8%
Number of workers: 136,529
Metro area unemployment rate: 5.6%
Agriculture jobs: 0.17%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 7.18%
Education jobs: 13.80%
Health-care jobs: 16.17%
Public Administration (Government) jobs: 4.52%

Residents of Pittsburgh, once a steel town, are now employed in fields such as biomedical, health, and education. Two of the major employers: University of Pittsburgh and the University of Pittsburgh Medical Center. The city does have some vulnerable industries, especially manufacturing, which makes up 6% of jobs.

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Baltimore

Share of jobs in strong industries: 41.8%
Number of workers: 249,688
Metro area unemployment rate: 4.8%
Agriculture jobs: 0.11%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 5.59%
Education jobs: 11.12%
Health-care jobs: 15.71%
Public Administration (Government) jobs: 9.31%

Baltimore, once a major port and manufacturing center, has developed more sturdy industries such as medicine, law, and health. Major employers include Johns Hopkins University and Johns Hopkins Hospital. The city, however, still struggles with poverty and crime and could face challenges, especially with its financial sector and tourism-related jobs, if the economy continues to worsen.

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Baton Rouge, La.

Share of jobs in strong industries: 40.5%
Number of workers: 103,320
Metro area unemployment rate: 5%
Agriculture jobs: 0.63%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 7.30%
Education jobs: 13.83%
Health-care jobs: 11.31%
Public Administration (Government) jobs: 7.44%

Baton Rouge, the state capital and home to Louisiana State University and Southern University at Baton Rouge, is thriving. Firms are rushing to use special financing for post-Katrina hurricane recovery work. About $6.5 billion in construction activity is underway (compared with about $750 million in a typical year), including a new refinery, chemical plant, and road projects. And like many Louisiana cities, it isn't dependent on the weak durable goods sector. LSU economics professor Loren C. Scott projects the city will see an increase of 2,400 jobs next year or about .06% of the workforce.

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New Orleans, La.

Share of jobs in strong industries: 40%
Number of workers: 101,752
Metro area unemployment rate: 4.7%
Agriculture jobs: 1.21%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 7.17%
Education jobs: 12.23%
Health-care jobs: 13.50%
Public Administration (Government) jobs: 5.85%

New Orleans has plenty of challenges as it recovers from 2005's Hurricane Katrina. The population has shrunk, putting pressure on university enrollments and hospitals. And tourism is way down. But the unemployment rate remains low. The city's banks, which did not make a large number of risky loans during the housing boom, are relatively healthy. And firms are investing heavily in construction projects in the city, rebuilding levees and building a new refinery.

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Philadelphia

Share of jobs in strong industries: 39.8%
Number of workers: 560,390
Metro area unemployment rate: 6.1%
Agriculture jobs: 0.13%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 6.32%
Education jobs: 9.99%
Health-care jobs: 15.99%
Public Administration (Government) jobs: 7.33%

The city has plenty of large hospitals and educational institutions, including the University of Pennsylvania, Jefferson Medical School, and Temple University. It also has a large number of lawyers. Tourism could do fine in a downturn if Northeasterners decide to travel locally and foreigners continue to stream in to take advantage of the weak dollar. But Philadelphia has many stores and restaurants, which might get hit hard in a downturn.

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Lubbock, Tex.

Share of jobs in strong industries: 39.4%
Number of workers: 100,523
Metro area unemployment rate: 4.1%
Agriculture jobs: 1.32%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 4.01%
Education jobs: 14.81%
Health-care jobs: 14.81%
Public Administration (Government) jobs: 4.42%

Lubbock is home to Texas Tech University and hospitals including Covenant Medical Center, and it could benefit from resilience in the higher-education, agriculture, health-care, and energy sectors.

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Anchorage, Alaska

Share of jobs in strong industries: 39.3%
Number of workers: 138,768
Metro area unemployment rate: 5.6%
Agriculture jobs: 3.21%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 6.79%
Education jobs: 8.26%
Health-care jobs: 11.36%
Public Administration (Government) jobs: 9.71%

Anchorage, Alaska's largest city, has a strong economy that feeds off the state's rich oil and natural gas supplies, U.S. military presence, and tourism.

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Lexington-Fayette, Ky.

Share of jobs in strong industries: 38.8%
Number of workers: 145,485
Metro area unemployment rate: 5.3%
Agriculture jobs: 2.13%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 6.39%
Education jobs: 12.42%
Health-care jobs: 14.20%
Public Administration (Government) jobs: 3.62%

Lexington, home to dozens of major companies, the University of Kentucky, and horse farms, is a diverse economy with a mix of agriculture, government, health care, and education. It does have some vulnerability, especially when it comes to manufacturing, which employs 12% of the workforce.

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Buffalo

Share of jobs in strong industries: 38.2%
Number of workers: 110,741
Metro area unemployment rate: 6%
Agriculture jobs: 0.15%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 4.33%
Education jobs: 10.76%
Health-care jobs: 17.64%
Public Administration (Government) jobs: 5.32%

Buffalo is known for its blue-collar roots and its low cost of living. But it also has a diverse employment base, which is less and less dependent on manufacturing. It is home to banks and other financial institutions. But it also has become a hub for debt collection—a lucrative industry in this economic climate. Education and health care play a big part in the economy. The city is home to the University at Buffalo and the Roswell Park Cancer Institute.

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Lincoln, Neb.

Share of jobs in strong industries: 38.1%
Number of workers: 135,647
Metro area unemployment rate: 3%
Agriculture jobs: 0.62%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 6.45%
Education jobs: 12.14%
Health-care jobs: 12.02%
Public Administration (Government) jobs: 6.82%

Lincoln is the state capital and is home to the University of Nebraska. It's located in an area known for its cattle and grain production. Among the city's largest employers are hospitals such as the BryanLGH medical center.

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Irvine, Calif.

Share of jobs in strong industries: 37.8%
Number of workers: 106,358
Metro area unemployment rate: 5.8%
Agriculture jobs: 0.18%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 13.87%
Education jobs: 12.46%
Health-care jobs: 8.58%
Public Administration (Government) jobs: 2.72%

Irvine is home to the University of California at Irvine and—like much of Orange County—hasn't been hit as hard by the subprime crisis as other parts of California.

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Seattle

Share of jobs in strong industries: 37.6%
Number of workers: 331,186
Metro area unemployment rate: 5%
Agriculture jobs: 0.34%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 12.24%
Education jobs: 10.02%
Health-care jobs: 11.49%
Public Administration (Government) jobs: 3.48%

Seattle was hit by the collapse of Washington Mutual, which was based in Seattle. And technology companies are likely to suffer in the economic downturn. But Seattle, a major port, will continue to benefit from robust international trade as long as the dollar is weak. And its largest employer is the University of Washington. The health-care and biotech sectors are also strong.

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Chesapeake, Va.

Share of jobs in strong industries: 36.9%
Number of workers: 106,626
Metro area unemployment rate: 4.6%
Agriculture jobs: 0.48%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 5.99%
Education jobs: 10.57%
Health-care jobs: 10.95%
Public Administration (Government) jobs: 8.94%

Chesapeake could be somewhat protected from the downturn because of its location just 15 minutes from Norfolk, the home of the world's largest U.S. naval base and Old Dominion University.

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Albuquerque, N.M.

Share of jobs in strong industries: 36.9%
Number of workers: 249,449
Metro area unemployment rate: 4.8%
Agriculture jobs: 0.35%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 9.45%
Education jobs: 9.43%
Health-care jobs: 11.67%
Public Administration (Government) jobs: 5.96%

Albuquerque's major employers include the University of New Mexico, the Kirtland Air Force Base, and Intel.

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Corpus Christi, Tex.

Share of jobs in strong industries: 36.9%
Number of workers: 123,835
Metro area unemployment rate: 5%
Agriculture jobs: 1.73%
Professional, Scientific, and Technical jobs (legal, accounting etc.): 4.70%
Education jobs: 10.36%
Health-care jobs: 13.13%
Public Administration (Government) jobs: 6.67%

Corpus Christi, a coastal city that is home to military bases, energy, and agriculture jobs, could do relatively well in a downturn as long as energy prices stay high and it isn't hit by more Ike-like hurricanes.