Historically, recent college students have centered their post-grad lives on landing a job in big cities like New York City and Los Angeles that promise a lively lifestyle and often higher starting salaries (although the high cost of living quickly eats into that).
But two places have emerged as new hotspots for Gen Z college grads: Florida and Texas, according to a study by JLL Research published this week. That’s largely thanks to a mass migration of publicly traded corporations’ headquarters since 2020, according to the research arm of global real-estate firm Jones Lang LaSalle.
“Finance firms relocating to Miami or Dallas since the pandemic began are having a meaningful impact on the distribution of job availabilities,” Jacob Rowden, senior manager of U.S. office research at JLL, told Fortune. “Before the pandemic, Texas and Florida housed about 16.2% of financial services employment in the country, today that’s rapidly approaching 18%. That 2% shift reflects almost 2 million jobs, so it’s a robust and significant improvement in local labor markets.”
Of the top 20 talent hubs for recent college grads, five are in either Florida or Texas. They include Dallas-Fort Worth, Houston, Austin, Miami/South Florida, and Orlando. Dallas-Forth Worth even surpassed Seattle—home to Fortune 500 companies like Amazon, Starbucks, and Nordstrom—claiming the No. 9 spot on JLL’s list.
Still, New York City claimed the No. 1 spot, followed by the San Francisco Bay area, Los Angeles, Boston, and Chicago. Some of that can be attributed to the concentration of university students nationally, according to JLL. While Texas and Florida boast the third- and fourth-highest concentrations of college students, the Sun belt houses 143,000 students, compared to 174,000 in Midwest states and more than 282,000 students on the East Coast, JLL reported.
Why college grads are getting jobs in Florida and Texas
Several cities in Florida and Texas have become major hiring hubs for recent grads, especially those who specialized in finance or technology. Dallas has become a significant financial hub, so a large share of business graduates in the Sun Belt end up there, Rowden said. It has even earned the nickname of “Y’all Street” as Goldman Sachs, Bank of America, and JPMorgan grow their presence in the region.
“It’s also a very diversified market in general and has a robust base of professional services companies, a growing technology sector, and is well-represented by other large organizations,” he added. Some of the largest companies based in Dallas include AT&T, Southwest Airlines, Comerica, and Match Group. According to the JLL report, the median tech salary in Dallas is $144,000; finance is $91,000; accounting and consulting is $86,000; and $90,000 for those who work at law firms.
Just south of Dallas is Austin, which is becoming a significant secondary tech market, largely due to long-term investments from local universities in partnership with other local stakeholders, Rowden said. Some tech companies in Austin with a large presence include Dell, Apple, IBM, Google, Amazon, Meta, Tesla, and Oracle. Houston remains the most preeminent market for the oil-and-gas industry, Rowden said.
And in Florida, Orlando has grown as a market for aerospace companies like Amazon founder Jeff Bezos’ Blue Origin, Lockheed Martin, Northrop Grumman, and Aerojet Rocketdyne. The city is also home to several major travel and leisure companies like Marriott Vacations Worldwide, Darden Restaurants, and Universal.
How much recent grads make in Florida and Texas
While there might be plenty of job opportunities in these two states, recent grads still make relatively less than “gateway markets” like New York City and San Francisco.
“For instance, a company shifting tech headcount from the Bay Area to Austin can procure talent for 15-20% lower salaries,” Rowden said. “A company relocating finance headcount from the tri-state area to Dallas-Fort Worth would see about 10-15% savings.”
But that hasn’t stopped new grads from moving there anyway.
“Seeing elevated talent migration to those areas, and now a growing pipeline of college graduates from university expansions, adds to the legitimacy and permanence of that momentum for office markets,” Rowden said.
Meanwhile, the cost of living in Florida or Houston can be cheaper than gateway cities, but it’s a “mixed bag,” Rowden said. While Miami isn’t a low-cost-of-living market, Orlando is considered a renter-friendly market due to its steady job market and rental housing despite demand from the hospitality and tech sectors.
And the story is very different in Texas, Rowden said.
“While you do have some cities [in Texas] where demographic momentum has outpaced new development and rents are growing quickly, it’s a significantly more affordable state from a housing and rent perspective,” he said.
It’s also important to remember Florida and Texas both do not have a state income tax, so that “contributes substantially to general affordability,” he added. “State income taxes reduce the typical graduate’s buying power by about 5% in gateway markets excluding Seattle.”
