“Swift swings” takes a quick peek at one economic trend.
The number: Bay Area pay raises started 2024 above Southern California wage hikes for the first time since the pandemic-scarred summer of 2020.
The source: My trusty spreadsheet looked at the quarterly Employment Cost Index. It tracks changes in private-industry pay nationwide and 15 big job markets, including a seven-county Southern California area and a 10-county Bay Area region.
Quick analysis
Bay Area wages rose at a 4.7% annual pace in the first quarter (No. 5 of the 15 US markets), up from 2.8% in the previous three months (worst of the 15) and tied with 4.7% a year earlier (No. 9).
Southern Californians only got 4.5% raises (No. 6) in 2024’s first three months. Not only did the region trail its northern peer, these pay hikes were down from 5% in 2023’s fourth quarter (which ranked No. 2) and 4.9% in 2023’s first quarter (No. 8).
Ponder that despite recent distressing news of significant California technology job cuts, these stats suggest salaries remain firm for many Golden State workers.
Deeper dive
Bosses got a tad stingy nationwide. The typical US worker got a 4.3% pay hike in the first quarter – the same annual pace as the previous three months but down from 5.1% a year earlier.
Yes, pay is cooling: Raises shrank in six of the 15 markets for the quarter and 11 over the year.
Note that to start 2024, Miami’s stunning 7.1% hike was No. 1 among the 15 US markets. Meanwhile, 2.8% raises for Phoenix were the lowest.
And, despite the Southern California cooling of raises, the first quarter saw the region’s pay-hike pace exceed the national pace for the 33rd time out of the last 36 quarters. As a comparison, Bay Area raises have topped the US hikes only 18 times over these nine years.
In this 2015-24 period, Southern California raises averaged 4.2% a year (No. 1 of the 15) vs. the Bay Area’s 3.4% (No. 7) and 3.4% nationally.
Think about those lofty salary bumps and then consider that the median selling price of a single-family home in both California markets rose at an 8%-a-year clip in these same nine years.
Last thought
Putting the intrastate rivalry aside, please note that 2024 started with US pay hikes that strongly suggest inflation is by no means cured.
Ponder the meek pay raises of the post-Great Recession, low-inflation days of 2011-2014: Bay Area averaged 2.7%, Southern California was at 1.6%, and the US at 1.9%.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
