Unemployment rate: 4.1%
Largest employer: The University of Nebraska
As a state capital, Lincoln is usually shielded from the worst effects of bubbles and recessions. As with other state capitals, including Austin, Texas, and Madison, Wis., however, a big part of its stability comes from housing the state's university.
The University of Nebraska employs nearly twice as many people in Lincoln as the state government, and while it's a big part of the reason Lincoln's unemployment rate has fared relatively well compared with that of the rest of the country, it's could also be a weakness if higher education costs ever find a ceiling. According to the nonprofit College Board's annual study of college costs, the average tuition and fees at U.S. public universities have increased at an average of 5.6% per year beyond the rate of inflation. That includes a 9.3% increase in 2009-10 at the height of the recession. As enrollment at state schools rose 33% within the past decade, per-student appropriations dropped 19%
This comes as student debt sets records, with 55% of public college students borrowing and owing an average $19,800. Critics such as PayPal (EBAY) founder Peter Thiel considers it a bubble and believes the situation arose because the college degree is "overvalued."He and his Founders Fund partner picked 20 students under 20 years of age and will pay them each $100,000 to drop out of school and start a company instead. He feels it's a step toward bringing success to more than just those who can afford the price of tuition. Detractors in higher education and elsewhere see value in the position -- but also potential doom for their institutions. When those institutions employ large swaths of a city's populace and are under attack, including from low-cost competitors among two-year institutions and a burgeoning online education industry, towns such as Boulder, Colo., Ann Arbor, Mich., and, yes, Lincoln have reason to be concerned.