How the rankings were calculated

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Our rankings are derived from three-month rolling averages of U.S. Bureau of Labor Statistics unadjusted employment data reported from September 1994 to September 2004. The data reflects the North American Industry Classification System categories, including total nonfarm employment and jobs in manufacturing, financial services, business and professional services, educational and health services, information, retail and wholesale trade, transportation and utilities, leisure and hospitality, and government. This allowed us to focus not only on job growth, but on high-wage sectors as well.

All areas for which full data sets and uniform area definitions were available from the past 10 years -- 274 regions in total -- were included in this analysis. This approach excluded the construction sector, for which data was not reported for many of the regions in the BLS database. And it excluded the Denver and Boulder areas, which were redefined in January 2003. Preliminary reviews of the data do not show either of these two regions near the top of the rankings. Two additional regions -- Hackensack and Patterson-Clifton-Pasaic, N.J. -- were not included because they were not included in the latest BLS data. In instances where estimates were revised for 2003, the new values were used.

The growth index is calculated from a normalized, weighted summary of: 1) the current and prior year's employment growth rates, with the current year emphasized (two points); 2) the sum of the 1999-2004 and 1994-1999 employment growth rates multiplied by the ratio of the 1994-1999 growth rate over the 1999-2004 growth rate (two points); and 3) the difference between the current year's growth rate and the average 2001-2004 growth rate (half a point).

The balance index is calculated from a normalized, weighted summary of: 1) the standard deviation of each area's current percentage mix of major employment sectors (one point); the standard deviation of each area's percentage of total 1999-2004 growth generated by each sector (one point); and 3) the standard deviation of each sector's 2001-2004 growth rate (half a point).

To compute the final rankings, the growth index was weighted by 4.5 of a total of seven points and the balance index by 2.5 of seven points. Full growth and balance index data for all 274 regions can be found on Inc.com.

Michael A. Shires is an associate professor of public policy and director of the Murray S. Craig Digital Democracy Laboratory at Pepperdine University.

Last updated: May 1, 2005




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