Southern California raises beat inflation for 8th straight quarter
Southern California raises beat inflation for 8th straight quarter
Southern California pay raises started 2025 by outpacing inflation, a winning streak that now runs two years long.
That’s what my trusty spreadsheet found when examining the federal Employment Cost Index, which tracks what employers pay for wages and salaries in 15 major U.S. job markets. That pay benchmark was compared with the U.S. Consumer Price Index.
The statistics show pay in an area comprising Los Angeles, Orange, Riverside, San Bernardino and Ventura counties rose at a 4.4% annual rate in this year’s first quarter. That was well ahead of a 2.7% hike in the CPI.
Over the last eight quarters, Southern California wages have grown at an average annual rate of 4.7%, compared with a 3.2% increase in consumer prices.
That’s a turnabout from the previous six quarters when pay hikes were below the soaring cost of living.
Southern California’s raises averaged 5.6% a year amid the worst bout of inflation in four decades, from the fourth quarter of 2021 to the first quarter of 2023. However, Consumer prices ballooned at a 7.4% annual rate during the same period.
Contemplate a national perspective.
Southern California’s first-quarter raises were the fifth best among the 15 U.S. job markets tracked. No.1 was Minneapolis at 5.7%. No. 15 was Miami at 1.2%. Nationally, raises ran at a 3.4% annual rate.
Meanwhile, the Bay Area – that’s Alameda, Contra Costa, Marin, Napa, San Benito, San Francisco, San Joaquin, San Mateo, Santa Clara, Santa Cruz, Solano and Sonoma counties – was No. 9 at 3.5%.
Now, take a longer-term view.
Over the past five years, Southern California’s wage hikes have been the highest in the nation. This local pay yardstick has increased 28% since 2020’s first quarter.
No. 2 over five years was Miami, up 24%. The smallest raises were in Chicago at 20%. The Bay Area was No. 10 at 22%. And nationally, a 23% gain.
By the way, consumer prices increased by 23% in five years. So wage growth in only five of these big job markets topped the cost-of-living surge.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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