ETROPOLITAN AREAS WITH THE LARGEST SHARE OF WORKERS WITH A COLLEGE DEGREE

	Rank	Percentage with college degree	Salary of college graduates	Salary of high school graduates
Stamford, CT	1	56%	$133,479	$107,301
Washington, DC/MD/VA	2	49%	$80,872	$67,140
Boston, MA/NH	3	47%	$75,173	$62,423
Madison, WI	4	47%	$61,888	$52,542
San Jose, CA	5	47%	$87,033	$68,009
Ann Arbor, MI	6	46%	$65,452	$55,456
Raleigh-Durham, NC	7	44%	$63,745	$50,853
San Francisco–Oakland, CA	8	44%	$77,381	$60,546
Fort Collins–Loveland, CO	9	44%	$57,391	$47,007
Seattle-Everett, WA	10	42%	$68,025	$55,001
Trenton, NJ	11	42%	$81,914	$64,299
Lexington-Fayette, KY	12	41%	$55,238	$44,915
Austin, TX	13	41%	$62,289	$48,809
Portland, OR	14	40%	$57,366	$48,080
Minneapolis–St. Paul, MN	15	40%	$69,955	$57,187
Denver-Boulder, CO	16	39%	$64,488	$50,097
New York–Northeastern NJ	17	38%	$79,757	$59,797
Lincoln, NE	18	38%	$50,401	$41,837
Santa Cruz, CA	19	38%	$64,801	$48,186
Tallahassee, FL	20	38%	$59,380	$46,715
Worcester, MA	21	37%	$60,723	$48,465

 TABLE 2: METROPOLITAN AREAS WITH THE SMALLEST SHARE OF WORKERS WITH A COLLEGE DEGREE

	Rank	Percentage with college degree	Salary of college graduates	Salary of high school graduates
Mansfield, OH	286	17%	$53,047	$35,815
Beaumont–Port Arthur–Orange, TX	287	17%	$58,234	$38,352
Rocky Mount, NC	288	16%	$52,330	$34,329
Stockton, CA	289	16%	$59,651	$37,928
Fort Smith, AR/OK	290	16%	$50,937	$33,187
Ocala, FL	291	16%	$47,361	$32,725
Yuba City, CA	292	16%	$56,403	$34,999
Modesto, CA	293	15%	$60,563	$36,126
Waterbury, CT	294	15%	$54,651	$37,280
Brownsville–Harlingen–San Benito, TX	295	15%	$43,800	$22,450
McAllen-Edinburg-Pharr-Mission, TX	296	15%	$44,605	$22,845
Anniston, AL	297	15%	$48,928	$33,031
Yakima, WA	298	15%	$50,160	$29,084
Bakersfield, CA	299	14%	$65,775	$34,807
Danville, VA	300	14%	$42,665	$28,868
Houma-Thibodaux, LA	301	14%	$56,044	$37,395
Vineland-Milville-Bridgetown, NJ	302	13%	$57,668	$35,375
Flint, MI	303	12%	$43,866	$28,797
Visalia-Tulare-Porterville, CA	304	12%	$55,848	$29,335
Yuma, AZ	305	11%	$52,800	$28,049
Merced, CA	306	11%	$62,411	$29,451

 Or compare Boston, third from the top, with Flint, fourth from the bottom. Both have a proud industrial past, but their economies are now at opposite ends of the spectrum. Boston, with four times the number of college graduates, is heavily dependent on innovation and finance. Flint, with one of the smallest concentrations of human capital in the nation, is still focused on traditional manufacturing, primarily cars. A college graduate in Boston makes on average $75,173, or 75 percent more than the salary of a similar worker in Flint. Of course, the relationship between innovation and salaries is not perfect. Stamford’s wealth is mostly due to financial services, while salaries in Raleigh, one of the world’s top innovation hubs, are relatively low. Nevertheless, there is a clear tendency for cities with many college-educated residents to have a local economy with a great deal of innovation and good salaries.

Possibly the most remarkable fact shown by these tables is that high school graduates in the top group often make more than college graduates in the bottom group. The average worker with a high school education living in Boston makes $62,423, or 44 percent more than a college graduate in Flint. A high school graduate in San Jose earns $68,009, thousands of dollars more than college-educated workers in Merced, Yuma, Danville, and all the other cities at the bottom. In other words, the disparity between cities is so large that it can dominate the disparity between levels of education. This underscores the fact that wage differences in the United States have as much to do with geography as they have to do with social class.

Today, America’s economic map shows not one but three Americas. At one end of the spectrum are the brain hubs in Table 1, with high salaries for both skilled and unskilled workers. At the other extreme are communities in Table 2, with low skill levels and declining labor markets. In the middle, a number of cities appear undecided about which direction to take, as their future could go either way. Note that it is not just that brain hubs pay high average salaries because they have many college-educated residents and these residents earn high salaries. There is something more at play here. Brain hubs pay high average salaries to nonskilled workers too. Thus, a worker’s education has an effect not just on her own salary but also on the entire community around her.

How can this be possible? One answer is that the cost of living in cities like San Jose, Raleigh-Durham, and Austin is higher than in Flint or Merced, and high school graduates need to be compensated to live there. This is true—higher cost of living does offset some of these differences—but it is not the whole story. It explains why there are still people in Flint and Merced and why not everyone has moved to San Jose, Raleigh-Durham, and Austin. But it does not explain why there are still employers in San Jose, Raleigh-Durham, and Austin. Why should employers, especially those who compete nationally, put up with such high labor costs to be in these locations? We will come back to the issue of cost of living and what it means for people’s standard of living. But first we need to dig a little deeper into the relationship between a city’s educational level and its economic prospects. What explains it, and what does it mean for communities?