Small businesses comprise about half the country’s jobs, but it’s better to work for entrepreneurs in some locations than others.
At least that’s the conclusion of a new report from WalletHub, which ranked cities based on their friendliness toward employees and job seekers. Among other factors, the report weighed the growth of small businesses and the income of their workers, as well as the unemployment rate and the number of hours worked.
The study found that Charlotte, N.C., was the top place to work for a small business, followed by nearby Raleigh. Oklahoma City, Okla., ranked third on the list.
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Despite all the attention on the Silicon Valley startup culture, cities in the mid-Atlantic and the Midwest fared best on this list. San Francisco ranked 23rd.
A separate report this week by the National Federation of Independent Businesses found that a smaller percentage of small business owners are hiring, but those who are hiring are bringing on a larger number of workers.
Small business owners said that they were paying their workers 2 percent more in March 2015 compared with the previous year, pointing to continued competition for jobs.
In the first quarter of the year, small business owners were more optimistic than they’d been in the past seven years, according to the Wells Fargo/Gallup Small business Index.
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1. Charlotte, NC
Metro Charlotte received the top score for its “small business environment,” which includes the number and growth of small businesses, the diversity of industry and the earnings and benefits offered to small business workers. The city’s nonprofit Business Innovation & Growth Council works to create an environment that develops high-impact, high-growth entrepreneurs.
2. Raleigh, NC
The famed Research Triangle scored third-best in economic environment and 10th in small business environment. The city has supported small businesses for decades: It’s Shop Local Raleigh organization has been around since the 1940s.
3. Oklahoma City, OK
Small businesses and their employees here benefit from a low cost of living and a high concentration of local investors from the oil and gas industry. The state has 44 certified small business incubators nurturing the its startup community.
4. Austin, TX
This hipster haven gets a boost because of its population and employment growth. It has gained a reputation for small businesses looking to make a splash in both the music and the tech worlds.
5. Omaha, NE
Omaha is ranked among the best cities for young professionals, thanks to a thriving startup scene alongside big businesses like Berkshire Hathaway and ConAgra. The city’s annual Big Omaha conference focuses specifically on innovation and entrepreneurship.
6. Nashville, TN.
Despite its agricultural roots, Nashville has in recent years earned a reputation as a southern tech hub with a thriving music and cultural scene. The city’s tech talent grew by nearly 40 percent from 2010 to 2013.
7. Salt Lake City
Sometimes it’s better to be a worker than the boss: The Crossroads of the West only ranked as average on Wallethub’s list of the Best Cities to Start a Business, but it broke the top 10 when it comes to best places to be an employee of one. Workers here can find opportunity even without high-priced diplomas—more than 41 percent of jobs in Utah require only a high school diploma.
One reason it’s great to be a small business employee in Dallas is that there are plenty of jobs: three out of four small business owners there say they plan to grow their business in the next five years. The city ranked first in on the Paychex IHS Jobs Index last month, for the seventh month in a row.
Despite its booming economy, the cost of living in Houston is below the national average, which means that small business employees’ paychecks go even further. The city may have made its fortune on legacy oil and gas industries, but it ranked third, after New York and San Francisco on a list of the American Cities of the Future.
This historic northeast city has plenty of startups coming out of its booming tech scene and prominent universities like Harvard and MIT. The city has the largest proportion of young professionals of all large cities.