As millennials approach their prime earning years, they face unique financial challenges. They are grappling with a combination of mounting student loan debt, increased housing costs and lingering effects of the Great Recession. Despite higher levels of education, millennials are more likely to have lower earnings, fewer assets and less wealth than previous generations at the same age.

Millennials recently surpassed Baby Boomers to become the country’s largest generation , and more of these financially burdened young adults are settling down to start families (and thinking about "adult" things like making a last will and testament, getting term life insurance and researching trust funds for their kids). In fact, over 17 million millennial women are now mothers, and they currently account for the overwhelming majority of births in the U.S.

Given the typical full-time millennial worker earns around $40,000 per year, it’s fitting that young millennial families increasingly seek alternatives to big city life, leaving high-priced coastal cities in favor of more affordable cities or suburbs. Of course, while popular, large cities come with steep price tags, they also offer some of the best wages and job opportunities. Fortunately, after taking cost of living into account, a diverse set of metropolitan areas—in terms of both location and size—offer highly competitive salaries for young workers.

To identify the best-paying cities for millennials, researchers at Fabric—a Brooklyn-based startup helping families plan for their financial future—analyzed the latest data from the U.S. Census Bureau. Only metropolitan areas with at least 100,000 people were included.

In order to make wages comparable across locations, dollar amounts for each metro were adjusted up or down based on the relative cost of living. In highly expensive cities such as San Francisco, earnings were adjusted down; in more affordable cities like Birmingham, earnings were adjusted up.

Across the entire U.S., the median annual earnings for full-time millennial workers in 2018 was $40,000. So, in the data below, if we show adjusted earnings above $40,000, then millennials in that city tend to enjoy above-average purchasing power.

Fabric’s researchers started by identifying the small and midsize metros with the highest cost-of-living adjusted earnings for full-time millennial workers.

Then, they crunched the numbers to identify the 15 best-paying large metropolitan areas. Fabric included wage data for all workers, population growth and median home prices from Zillow. They looked at population growth to see whether more-affordable cities were growing at a faster rate than others, and they looked at home prices as another measure of relative affordability.

Here’s what they found.

The Top 15 Highest-paying Metros for Millennials

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15. Austin-Round Rock, TX

Median earnings for full-time millennials (adjusted): $44,378

Median earnings for full-time millennials (unadjusted): $44,600

Median earnings for all full-time workers (unadjusted): $50,000

Cost of living: 1% above the national average

Median home price: $331,306

5-year population change: 15.1%

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14. Cincinnati, OH-KY-IN

Median earnings for full-time millennials (adjusted): $44,444

Median earnings for full-time millennials (unadjusted): $40,000

Median earnings for all full-time workers (unadjusted): $47,100

Cost of living: 10% below the national average

Median home price: $214,606

5-year population change: 2.4%

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13. Pittsburgh, PA

Median earnings for full-time millennials (adjusted): $44,681

Median earnings for full-time millennials (unadjusted): $42,000

Median earnings for all full-time workers (unadjusted): $50,000

Cost of living: 6% below the national average

Median home price: $173,908

5-year population change: -1.5%

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12. Raleigh, NC

Median earnings for full-time millennials (adjusted): $44,699

Median earnings for full-time millennials (unadjusted): $43,000

Median earnings for all full-time workers (unadjusted): $50,000

Cost of living: 4% below the national average

Median home price: $322,823

5-year population change: 12.3%

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11. Baltimore-Columbia-Towson, MD

Median earnings for full-time millennials (adjusted): $44,776

Median earnings for full-time millennials (unadjusted): $48,000

Median earnings for all full-time workers (unadjusted): $57,000

Cost of living: 7% above the national average

Median home price: $299,146

5-year population change: 1.2%

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10. Birmingham-Hoover, AL

Median earnings for full-time millennials (adjusted): $45,045

Median earnings for full-time millennials (unadjusted): $40,000

Median earnings for all full-time workers (unadjusted): $45,000

Cost of living: 11% below the national average

Median home price: $218,211

5-year population change: 1.2%

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9. Columbus, OH

Median earnings for full-time millennials (adjusted): $45,504

Median earnings for full-time millennials (unadjusted): $42,000

Median earnings for all full-time workers (unadjusted): $49,000

Cost of living: 8% below the national average

Median home price: $238,760

5-year population change: 6.7%

Photo Credit: Alamy Stock Photo

8. Minneapolis-St. Paul-Bloomington, MN-WI

Median earnings for full-time millennials (adjusted): $45,988

Median earnings for full-time millennials (unadjusted): $47,000

Median earnings for all full-time workers (unadjusted): $54,000

Cost of living: 2% above the national average

Median home price: $323,665

5-year population change: 5.0%

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7. Milwaukee-Waukesha-West Allis, WI

Median earnings for full-time millennials (adjusted): $46,073

Median earnings for full-time millennials (unadjusted): $44,000

Median earnings for all full-time workers (unadjusted): $50,000

Cost of living: 4% below the national average

Median home price: $232,700

5-year population change: 0.3%

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6. Washington-Arlington-Alexandria, DC-VA-MD-WV

Median earnings for full-time millennials (adjusted): $46,453

Median earnings for full-time millennials (unadjusted): $55,000

Median earnings for all full-time workers (unadjusted): $65,000

Cost of living: 18% above the national average

Median home price: $427,708

5-year population change: 5.0%

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5. Seattle-Tacoma-Bellevue, WA

Median earnings for full-time millennials (adjusted): $46,512

Median earnings for full-time millennials (unadjusted): $52,000

Median earnings for all full-time workers (unadjusted): $60,000

Cost of living: 12% above the national average

Median home price: $492,212

5-year population change: 9.1%

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4. Hartford-West Hartford-East Hartford, CT

Median earnings for full-time millennials (adjusted): $49,116

Median earnings for full-time millennials (unadjusted): $50,000

Median earnings for all full-time workers (unadjusted): $60,000

Cost of living: 2% above the national average

Median home price: $251,579

5-year population change: -0.7%

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3. Boston-Cambridge-Newton, MA-NH

Median earnings for full-time millennials (adjusted): $49,195

Median earnings for full-time millennials (unadjusted): $55,000

Median earnings for all full-time workers (unadjusted): $63,000

Cost of living: 12% above the national average

Median home price: $499,533

5-year population change: 3.7%

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2. San Francisco-Oakland-Hayward, CA

Median earnings for full-time millennials (adjusted): $50,781

Median earnings for full-time millennials (unadjusted): $65,000

Median earnings for all full-time workers (unadjusted): $72,000

Cost of living: 28% above the national average

Median home price: $771,421

5-year population change: 4.6%

Photo Credit: Alamy Stock Photo

1. San Jose-Sunnyvale-Santa Clara, CA

Median earnings for full-time millennials (adjusted): $54,240

Median earnings for full-time millennials (unadjusted): $71,000

Median earnings for all full-time workers (unadjusted): $80,000

Cost of living: 31% above the national average

Median home price: $1,034,366

5-year population change: 3.9%

Detailed Findings & Methodology

The median annual earnings for full-time working millennials in the U.S. was $40,000 in 2018, about 16 percent lower than the median for all workers of $48,000. Across major metropolitan areas, unadjusted millennial earnings ranged from a low of $25,000 per year to a high of $71,000 per year in San Jose, CA.

Of course, the cost of living varies widely by metro, from a low of 19 percent below average to a high of 31 percent above average. After adjusting for cost of living, the range in earnings narrows from a low of approximately $28,000 per year to a high just over $54,000 annually.

While locations with higher living costs tend to offer higher wages, sometimes wage gains don’t make up for the increased cost, as is the case with San Diego, CA. On the other hand, in metropolitan areas like San Francisco, CA and San Jose, CA higher wages more than make up for increased expenses.

The inverse is also true in low-cost areas. For example, wages can be so depressed that despite lower living costs, residents still experience below-average purchasing power. This is true for Memphis, TN, San Antonio, TX and Tucson, AZ. Fortunately, many low-cost cities offer strong enough wages to boost purchasing power above average, as is the case with many large Midwestern metropolitan areas, such as Minneapolis, MN and Columbus, OH.

While one might expect that cities offering the most purchasing power would attract more residents, the analysis found no significant correlation between adjusted millennial earnings and population growth. Across the best-paying cities for millennials, there’s a wide range in growth rates. For example, Austin, TX grew 15 percent over the past five years, whereas Pittsburgh, PA saw a population decline.

To determine the best-paying cities for millennials, Fabric analyzed data from the U.S. Census Bureau’s 2018 American Community Survey Public Use Microdata Sample (ACS PUMS), the U.S. Census Bureau’s Population Estimates, the Bureau of Economic Analysis’s Regional Price Parity dataset and Zillow. The Pew Research Center defines millennials as the generation of people born in 1981-1996, meaning millennials were 22 to 37 years old in 2018.

Statistics on the median earnings for full-time millennial workers, median earnings for all full-time workers and the share of workers in STEM occupations are from the U.S. Census Bureau’s 2018 American Community Survey Public Use Microdata Sample (ACS PUMS). STEM occupations are defined according to the Census Bureau’s 2018 list of STEM Occupation codes . The cost-of-living index is from the Bureau of Economic Analysis’s Regional Price Parity dataset for 2017, and the 5-year population change is calculated as the percent change in population from 2013 to 2018 using the U.S. Census Bureau’s Population Estimates. Median home list price data is sourced from Zillow.

To make earnings comparable across locations, median earnings for each metro were adjusted using the cost-of-living index for that metro. Earnings in expensive metros were adjusted down to reflect lower purchasing power while earnings in relatively affordable cities were adjusted up to reflect higher purchasing power.

Metro areas are ranked by the cost-of-living adjusted median earnings for full-time millennial workers.

Only metropolitan areas with at least 100,000 people were included in the analysis. Additionally, metro areas were grouped into the following cohorts based on population size:

Small metros: 100,000-350,000

Midsize metros: 350,000-1,000,000

Large metros: more than 1,000,000

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Fabric Insurance Agency, LLC offers a mobile experience for people on the go who want an easy and fast way to purchase life insurance.