Houston salaries for new graduates stretch further than in other cities | Fort Bend Economic Development Council

With commencement season fast approaching, the prospects for new graduates are looking good in Houston, where a new analysis found adjusted salaries for recent graduates were highest among other major cities nationwide.

Payroll software company Gusto used data it collected on small- and mid-sized businesses to calculate how much, on average, professionals aged 20 to 24 are making. The San Francisco-based company found recent graduates in Houston make an average salary of $65,648, once cost-of-living adjustments are made.

"Houston is one of those areas where there's both a lot of growth, there's really solid pay, and— when you combine that with the low cost of living— turns out to be the city where new graduates can get the biggest value for their paychecks coming right out of college," said Luke Pardue, a Gusto economist who conducted the research.

Houston ranked just ahead of Philadelphia, which was second in terms of cost of living-adjusted average salary, according to the report. While Philadelphia's cost of living is nearly 5 percent higher than the national average, Gusto found paychecks there for new graduates generally account for that.

At the bottom of the list was New York City, where an average salary of $72,197 can feel like $31,707 after cost-of-living adjustments are made, according to Pardue's calculations.

Graduates just entering the job market may find a greater challenge landing those jobs, the report found. Gusto predicted the rate at which job-seekers aged 20 to 24 are hired into full-time jobs is expected to be 25 percent lower this month compared to May 2022. Pardue said this is related to an overall cooling economy.

"What we're seeing overall is the market for new graduates is cooling down just a little bit," Pardue said.

While there may be a slowdown in hiring, there's still opportunity. Gusto found there were full-time opportunities in food and beverage industries and in retail.

"These industries are hiring full-time positions in tech-forward roles, like e-commerce managers and software developers for retail firms that, after years of technological disruption, are trying to take advantage of a lot of these disruptions to grow their business in a tech-forward way," Pardue said. "And then looking geographically, what we saw was that a lot of this growth right now for new graduates is centered in the South and in Texas."

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