”Survey says” looks at various rankings and scorecards judging geographic locations while noting these grades are best seen as a mix of artful interpretation and data.
Buzz: The average Southern California paycheck grew at a 6.1% annual rate this summer.
Source: My trusty spreadsheet analyzed the federal government’s third quarter Employment Cost Index report. This wage and salary yardstick tracks pay patterns nationally and in 15 major job markets including the region comprising Los Angeles, Orange, Riverside, San Bernardino and Ventura counties.
Topline
Southern California is a fairly good example of how many employers across the U.S. have been forced to pay up for talent in the pandemic era.
Our five-county region had the third-largest average pay hikes this summer among the 15 U.S. markets tracked. Tops was Miami at 7.1%, No. 2 was Phoenix at 6.6%.
Southern California’s 6.1% jump was up from 5.7% (No. 7) this spring. It’s part of a sharp change in compensation in the worker’s favor.
Remember that Southern California wages rose at an average 3.4% annual pace in pre-pandemic 2015-19 (that was still No. 1 of the 15) after rising just 1.4% per year (No. 13) in the post-Great Recession span of 2010-2014.
Details
Southern California raises are clearly ahead of the Bay Area, where wage hikes have recently ranked among the national lows.
Bay Area wages rose at a 4.4% annual rate this summer – the second-lowest of the 15 – vs. 4.5% (No. 12) this spring.
Pre-pandemic, however, the Bay Area was a national leader. Its 3.1% average raises in 2015-19 and 2% in 2010-2014 both ranked third among the 15 metros.
Southern California raises have consistently topped national pay hikes since 2015.
U.S. pay rose at a 5.2% annual rate this summer vs. 5.3% in the spring vs. 2.9% between 2015-19. The nation’s 1.6% average increases in 2010-2014 beat local hikes by 0.2 percentage points.
Caveat
It should be noted that local raises did not keep pace with surging inflation.
My spreadsheet says Southern California pay actually fell 1.8%, even after raises, due to inflation this summer. That’s compared with a 3.1% drop after inflation in the spring. Pay actually topped inflation by 1.8% in 2015-19 after declining by 0.6% in 2010-2014.
It was a similar story nationwide where pay fell at a 2.7% annual rate after inflation this summer vs. a 3.1% drop in the spring. Wage hikes did top inflation by 1.1% in 2015-19 but were 0.3% below cost-of-living increases in 2010-2014.
Bottom line
This was a record-breaking summer for many metros in this pay-raise database that dates to 2006.
All-time highs were hit in Miami and Phoenix plus Minneapolis and Seattle at 5.9%, Atlanta at 5.2%, and Philadelphia at 4.9%. It was the second-highest Southern California raise, trailing only summer 2021’s 6.5%.
And ponder the evolving extremes by metro.
Spring’s No. 1 was also Miami with 6.8% raises. Southern California was 2015-19’s top at 3.4%, and 2010-2014’s high was 2.2% in Houston.
The summer’s low was 4.1% in Washington, D.C., which was also spring’s bottom at 3.8%. The 2015-19 low was 2% in Houston while 2010-2014’s worst was 1.3% in Phoenix.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com