Best states to start your career and achieve happiness

Colin Lalley 1600


Colin Lalley

Colin Lalley

Insurance Expert

Colin Lalley is the Associate Director of SEO Content at Policygenius in New York City. His writing on insurance and personal finance has appeared on Betterment, Inc, Credit Sesame, and the Council for Disability Awareness.

Published September 21, 2016|4 min read

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We’re all excited when we graduate college. It’s a grueling (and often expensive) journey that’s extremely satisfying once you strike out on your own.It’s not uncommon to see people head off to the bright lights of a big state like California, New York, or Texas. But just because those states are the most alluring, does that mean they’re the best for new graduates?Turns out, not necessarily. The best places for a young person to get their career and finances off to a great start isn’t where you think.

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  1. Utah

  2. North Dakota

  3. Wyoming

  4. Colorado

  5. Texas

  6. Montana

  7. South Dakota

  8. New Hampshire

  9. Minnesota

  10. Alaska

What makes a great career-starting state

So what makes a good state to start your career after graduation? We looked at a few factors that should go into which state a Millennial decides to start his or her career, including the state’s:

  • Unemployment rate for people under 25

  • Cost of living versus average starting salary

  • Rate of economic growth

  • Overall happiness of its residents

We ranked each state out of 50 in each category, with 1 being the best and 50 being the worst, and averaged the results. As a tiebreaker, we gave the edge to the state with the higher early career starting salary.

Unemployment rate for workers under 25

During the recession just a few years ago, young people were graduating into a job market that simply wasn’t there; the national unemployment rate for workers under 25 peaked at 19.5% in April 2010 (compared to a peak of around 10% for the country as a whole). We looked specifically at the unemployment rate for workers under 25 years old to get a better idea at where young graduates should go to increase their odds of getting work as soon as possible. Our unemployment numbers are courtesy of the Economic Policy Institute, using monthly Current Population Survey microdata from the Bureau of Labor Statistics.

Surplus salary

There are two main things that go into how much money you have leftover for discretionary spending: how much money you’re making and the cost of living wherever you are. It’s important to take both of these into account; New York, for example, has a pretty high average starting salary at $46,464 but the high cost of living – $27,255 – can quickly wipe out those gains. That’s how it ends up at #48 in this category.

The average starting salary was pulled from Payscale’s survey data, which polled people who received bachelor’s degrees from four-year colleges. It’s "early-career" salary, which includes the first five years after graduation and provides a pretty good insight into what students will be earning soon after they join the workforce.The cost of living was calculated using the expenses for one adult in MIT’s living wage calculator. The expenses include food, child care (which is 0 for our purposes), medical – including insurance premiums and health care costs – housing, transportation, taxes, and "other," composed of "major budget components such as clothing, personal care items, and housekeeping supplies" based on data from the Bureau of Labor Statistics Consumer Expenditure Survey.

Fastest-growing economies

Economic growth data was compiled by Business Insider and pulls from a few different sources through June 2015. Using data from government agencies like the Bureau of Labor Statistics, the Bureau of Economic Analysis, the Census Bureau, and the Federal Housing Finance Agency, the fastest-growing economies rating reflects:

  • Unemployment rate

  • Percent change in nonfarm payroll jobs

  • GDP per capita

  • GDP growth

  • Year-over-year change in housing prices

  • Average weekly wage

  • Change in average weekly wage

It also looks at Fortune 1000 companies that are headquartered in each state and the employment share of different industries to complete the picture.


If you’re thinking, "One of these things is not like the other," you’re right. While the other categories provide quantifiable measurements – the unemployment rate, for instance, can be easily measured – happiness is a qualitative category. This statistic, from a Gallup/Healthways survey of over 175,000 people "capturing how people feel about and experience their daily lives," was based on the following criteria:

  • Purpose: Liking what you do each day and being motivated to achieve your goals

  • Social: Having supportive relationships and love in your life

  • Financial: Managing your economic life to reduce stress and increase security

  • Community: Liking where you live, feeling safe and having pride in your community

  • Physical: Having good health and enough energy to get things done daily

Even though it’s in a different category than our other measurements, happiness is still crucial to take into account. After all, what’s the point in making good money and planning for the future if you’re miserable during the process?It’s also interesting to compare a state’s happiness with its economic and financial reality. For instance, Hawaii topped the happiness rankings at #1, and it’s not hard to see why: beautiful beaches, jungles, and volcanoes, and a seemingly carefree way of life. Their unemployment rank for people under 25 comes in at #9, which is pretty good, but surplus salary is dead last thanks to a high cost of living and its economic growth is middle of the pack at #23.

Why start your career here?

It’s not just about earning money – it’s about what you can do with it. If you choose a great state to work in, there are real, long-term consequences that can make your life easier long after you’ve graduated.

  • Pay off your student loans. The Class of 2016 graduated with an average of approximately $37,000 in student loan debt. They’re just doing their part to contribute to the nation’s $1.2 trillion total. It’s hard to avoid student loan debt, but one thing you can do is take control of your payments. You have a grace period after you graduate, but having a plan in place to pay off your debt as soon as possible can save you a lot of money in the long run. Living in one of the best states to start your career means you’re more likely to have the job and income to start paying down debt right away and start adult life on the right foot. Make good use of your first years out of college to set yourself up for success!

  • Start saving for retirement. I know – you’re just starting your job, is it really time to think about retirement already? The answer is yes, because the sooner you start saving, the more money you’ll have in your golden years. Also, the less likely you’ll reach 45 years old and start freaking out that you haven’t saved enough money. Retirement savings in America are dire. Between IRAs, 401(k)s, and investment products like mutual funds, there’s no shortage of ways to save. But the median working-age couple only has $5,000 saved for retirement, and one-third of Americans have $0 saved. If you live in a state that has a low cost of living and a good supply of well-paying jobs, you’ll be that much further ahead for your retirement.

  • Build your financial safety net. Your retirement isn’t the only thing you have to worry about when it comes to money. You need to minimize your debt; that means not only paying off your student loans but also credit card bills, auto loans, and mortgages as quickly as possible. You need an emergency fund. You need insurance. Moving to one of the top states allows you to make sure your entire financial safety net is ready to go in case the worst happens. You’ll be well prepared for any curveball life throws your way because you’re less likely to be worrying about livings expenses being too high or your salary not being adequate.


Image: Alberto Restifo