Houston: A Mecca for College Grads

Take that, New York! For recent college graduates launching a career, Houston is the American city with the best mix of job openings, pay, and affordability. Rounding out the top five in Bloomberg Businessweek's second annual ranking of the best places for new grads are Washington, Dallas, Atlanta, and Austin. The list of 30 cities was culled from more than 3,500 municipalities based on unemployment rates, the number of employers posting on job search website AfterCollege.com, average pay, and the cost of living.

This year, 13 of the top 30 are new, and five of the newcomers are in Texas, reflecting the strength of the oil industry (for the full list: businessweek.com/go/10/newgrad). Several cities near the top of last year's list didn't make the cut, including No. 1 Indianapolis and No. 7 Chicago. Even in cities that fared well, the number of employers in hiring mode fell. In 2009, Phoenix was No. 2, with 190 employers posting jobs on AfterCollege. This year it's No. 19, with 31 companies listing openings. "The classes of 2009 and 2010 are now competing for the same jobs," says AfterCollege Chief Executive Officer Roberto Angulo. "Internships are going to graduates instead of those who are still in school."

Houston companies have created 31,000 positions since January, including 10,800 in May, according to the Greater Houston Partnership, a business advocacy group. That's a result of a new startup culture that's taking hold, says Jeff Moseley, the group's president. "In some parts, it's, 'Who's your daddy?' and 'Where'd you go to school?' " says Moseley. "Here it's, 'What's your idea and how can we make money?' "

In second-place Washington, the federal government's expansion has created both public- and private-sector jobs, and new grads are drawn by the area's diverse population, international atmosphere, and good universities. Over the past decade, the region added almost 300,000 jobs, though growth has slowed in the past year or two, says Jim Dinegar, president of the Greater Washington Board of Trade, a business group. "We're not recession-proof," Dinegar says, "but we're somewhat insulated."

The bottom line: With its low cost of living and 31,000 new jobs added since January, Houston offers recent graduates opportunity on a budget.

    Before it's here, it's on the Bloomberg Terminal.