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Where is Joblessness the Lowest? Hint: Cities With College Students and Tourists

Honolulu has one of the lowest unemployment rates in the nation.
Honolulu has one of the lowest unemployment rates in the nation. Photo: Associated Press

Hawaii and Iowa are home to four of the top five cities with the lowest unemployment rates in the country, according to fresh data from the Labor Department.

Iowa’s booming college towns, Hawaii's tourist havens and Fort Collins, Colo.’s blossoming tech sector are pulling down their local unemployment rates and driving employers to extreme measures to entice and retain talent.

Here’s a breakdown of their current job situations:

Iowa’s Ames and Iowa City took the top two spots. The cities are home to large public universities, Iowa State University with more than 36,000 students in 2017 and the University of Iowa, which enrolled almost 34,000 students last year. Such college towns have been called recession resistant because they tend to fare better than the broader economy during downturns.

Iowa as a whole has recently experienced a labor shortage. The state is in the only region in the U.S. where job openings outnumber out-of-work job seekers.

Still, Iowa has experienced an outflow of citizens from the workforce, which can contribute to a lower unemployment rate.

Fort Collins, with its little-known but growing tech culture, was ranked fourth. The city, which is due north of Denver, can claim budding software companies like Xpanxion and AllProWebTools and larger corporations like Anheuser-Busch among its ranks. It's also home to Colorado State University, with its student population of almost 34,000, making it yet another city with ultra-low unemployment that's teeming with potential bachelor's degree holders.

The labor market is so tight in the area that one manufacturer recruited at a high school parents’ night, and a plumbing company began offering an on-site tap flows with craft beer to keep workers content.

Hawaii’s Honolulu and Kahului-Wailuku-Lahaina’s metro area took the third and fifth spots for cities with the lowest unemployment rates. Tourism drives much of the state’s economy, and the nation’s output is booming while world growth has been strong recently. This has helped lure new tourists from Asia and other parts of the world, and by extension, jobs, to the island.

To be sure, recent volcanic activity and other major weather events could lead to a slow-down for businesses, and potentially, employment.

“There have been anecdotal reports that the Kauai floods have caused some visitor slowing beyond the directly-affected areas, and that bookings for Big Island travel have taken a hit in recent weeks,” according to a report by the University of Hawaii’s Economic Research Organization.


How Bad Is the Labor Shortage? Cities Will Pay You to Move There (April 30, 2018)

Iowa’s Employment Problem: Too Many Jobs, Not Enough People (April 1, 2018)

Why Are People in Red States Dropping Out of the Labor Force? (Nov. 28, 2017)


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