Austin Ranks Among Top Cities for College Grads, Outperforming Other Texas Metros

In a national landscape where recent college graduates are facing one of the toughest entry-level job markets in years, Austin continues to distinguish itself as a top destination. While graduates in major metropolitan areas like New York and Chicago struggle to find their footing, Austin stands out among a select group of cities proving fertile ground for new talent.

A recent study by payroll-services provider ADP, which analyzed over 5 million U.S. workers in their 20s across 55 metros, ranked Austin among the top five most promising locations for recent college graduates. The study weighed affordability, wages and hiring activity to determine its ranking.

Is Austin an affordable city for college grads?

Austin-Round Rock secured the fourth spot overall with a combined percentile rank of 94. Its annual wage estimate of $58,404, adjusted for a cost-of-living ratio of 1.02, translates to an affordability-adjusted annual wage of $59,828. The city's hiring rate stands at 2.8%.

What sets Austin apart is its concentrated presence of technology, health, and financial firms. Ben Hanowell, ADP Research’s director of people analytics, told The Wall Street Journal these sectors are key drivers of job growth for young professionals.

While housing costs have historically been a concern in Austin, there's good news for newcomers: Rents have fallen for nearly two years.

How do other Texas metros compare?

For recent college graduates looking to stay within the Lone Star State, Austin presents a stronger profile than Dallas-Fort Worth, Houston and San Antonio, according to the ADP study.

Dallas-Fort Worth-Arlington: Ranks lower than Austin with a combined percentile rank of 78. The metro area offers an annual wage estimate of $50,802, which adjusts to $49,183 when factoring in its cost of living ratio of 0.97. The hiring rate here is 2.7%, just slightly below Austin's.

Houston-The Woodlands-Sugar Land: Comes in further down the list with a combined percentile rank of 56. Graduates can expect an annual wage estimate of $50,142, which remains nearly the same at $50,032 after a cost of living ratio of 1.00. Houston's hiring rate is 2.5%.

San Antonio-New Braunfels: This metro is at the bottom of the Texas comparison with a combined percentile rank of 35. It has an annual wage estimate of $43,476, adjusted to $46,386 with a cost of living ratio of 1.07. The hiring rate is 2.5%, similar to Houston.

How Austin stacks up against other top contenders

Austin's performance is notable when compared to its peers in the top five:

Raleigh, N.C.: Raleigh claimed the top spot in the ADP study with a combined percentile rank of 100. It boasts an annual wage estimate of $55,580, an affordability-adjusted annual wage of $56,721, and a hiring rate of 4.2%.

Milwaukee-Waukesha-West Allis: Milwaukee rose to a 98 percentile rank up from 56 last year. Milwaukee's hiring rate is 3.7%. The city's annual wage estimate is $49,208, and its affordability-adjusted annual wage is $51,508.

Baltimore-Columbia-Towson: Baltimore holds a combined percentile rank of 96. Its annual wage estimate is $52,267, translating to an affordability-adjusted annual wage of $50,907, with a hiring rate of 3.5%.

Birmingham-Hoover: Birmingham ranks just below Austin with a combined percentile rank of 93. It offers an annual wage estimate of $50,786, an affordability-adjusted annual wage of $54,863, and a hiring rate of 2.8%.