The State of Wage Increases in Southern California and Beyond
“Quick fluctuations” allow us to quickly understand an economic trend.
Current Trends in Wage Increases
According to the Employment Cost Index for private sector workers, wage increases in Southern California have remained at their lowest levels since 2020. In the year through June, Southern California bosses increased employee pay by 4.5%, ranking eighth among the 15 regions studied. While this rate hike is in line with wage gains in March, it is lower than June 2023’s 5.3% and the 2022-23 average of 4.9%. This marks the smallest wage increase since the 12 months ending in September 2020.
Despite this, the good news is that the 2024 raises exceed Southern California’s 3.5% inflation rate in the first half of the year. However, pay increases are expected to average 6% per year between 2021-23, exceeding local inflation rates. Nationally, pay increases stood at 4.1% as of June, compared to 4.3% three months ago and 4.6% a year ago, with the average pay increase for 2022-23 at 4.9%.
Wage Growth Across the Country
Pay increases declined in nine out of the 15 job markets tracked, reflecting a recent softening job market trend. In contrast, the Bay Area saw a significant increase in salaries by 5.2% in a year, marking a record high. Wage growth outside California also showed fluctuations:
- Miami: Growth of 6.6% – 1.1 percentage points in one year.
- Atlanta: Up 5.4% – up 0.8 percentage points.
- Houston: Up 5.1% – up 2.5 percentage points.
Regional Variances in Wage Increases
While some areas experienced significant growth in wages, others saw declines:
- Washington, DC: Growth was 4.9%, a decrease of 0.8 percentage points within one year.
- Seattle: An increase of 4.6% and a decrease of 0.8 percentage points.
- New York: Increased by 4% and decreased by 0.6 percentage points.
These fluctuations highlight the diverse landscape of wage increases across different regions, with various factors influencing the pace and magnitude of salary growth.
