I could let you know that wages in California keep pace with inflation, but that may miss the larger picture.
My trusty spreadsheet checked out the federal employment data I personally like best: a quarterly report derived from unemployment insurance records. The end of 2023 was in comparison with 2019 – just before the coronavirus upended the economy – to find out the winners and losers of inflation when it comes to wages.
Let's start with the ugly proven fact that inflation, in accordance with the Consumer Price Index, has risen by 19.5% nationwide over these 4 years. Of course, we could debate the merits of this benchmark perpetually. But even by this calculation, we have now seen the worst four-year bout of inflation since 1991. That was a 3rd of a century ago.
On the opposite hand, average wages in California rose 20.9 percent in those 4 years. Technically, that's a “victory” over inflation.
But.
Wages also outpaced the problematic rise in the price of living in 40 other states. California's wage increases were only the thirty first best amongst states, lagging behind the national increase of 21.2%.
By the best way, the most important wage increases were in Montana with 28.3%, New Hampshire with 28%, Florida with 27.3%, Washington with 27.2% and Maine with 26.7%. And we would really like to indicate that wages in Texas only increased by 20.2%.
Plus, averages are somewhere in the center, so the tough reality is that it's uncertain whether your salary in California will outpace inflation.
Let us search for clues as to which salaries are lagging behind the rising cost of living.
What are you doing?
When taking a look at California employment broken down by major industries, the smaller increases look like concentrated in two areas.
One example is paperwork. In these jobs, employees can have been completely happy to give you the option to work at home. The second example is the actual estate sector. Real estate business has slowed down, partly resulting from higher rates of interest that the Federal Reserve is using to curb inflation.
The 11 industries that suffered from inflation employed 52% of California employees—and overall, they enjoyed job growth of 4.3% between 2019 and 2023. These employees are also well paid: a mean of $94,000 per yr—but that wage only increased 16% in 4 years.
This group includes health/social services (wages increased 19% in 4 years), skilled services (18%), agriculture (18%), government (17%), construction (17%), private education (16%), management (15%), mining (14%), real estate (13%), utilities (7%) and humanities/entertainment/recreation (2%).
The above-inflation wage increases in California occurred primarily in lower-paying jobs, where employers struggled to fill positions and due to this fact needed to pay more to recruit and retain staff.
These nine inflation-beating industries employed 48% of California's employees, while employment declined by 1.5% between 2019 and 2023. Their total labor income averaged $89,000 on an annual basis—a rise of 26% in 4 years.
Business support ranked first, with a rise of 30% in 4 years, followed by manufacturing (29%), information (28%), transportation/warehousing (26%), wholesale trade (25%), personal services (25%), hospitality (24%), retail (23%) and finance (22%).
Where do you’re employed?
Now take a take a look at the wages on the district level.
The 20 counties that were among the many inflation losers – and during which 43 percent of California's workforce works – lost a complete of 0.6 percent of their jobs in 4 years. These cuts explain the wage weakness. Wages rose by 16 percent to $82,800 per yr.
This group was highlighted by two of the state's largest labor markets – Los Angeles County, where wages rose just 17% in 4 years, and Alameda, which rose 15%. The other top 10 counties when it comes to employment saw wage increases that exceeded the speed of inflation.
Overall, the 38 counties with the best inflation rate employed 57% of California's workforce. Jobs grew 1.5% from 2019-2023, with salaries increasing 23% to $96,400.
The eight largest counties on this group were San Mateo (wages increased 33%), Santa Clara (31%), San Francisco (27%), Riverside (25%), San Bernardino (22%), Sacramento (20%), Orange (20%) and San Diego (20%).
Bottom line
Let's just talk in small words concerning the fluctuations in wages in California.
My salary metric shows that the annual wage for a typical job in California rose from $75,660 at the top of 2019 to $91,468 within the fourth quarter of 2023. That's a remarkable jump of $15,808 – and well above the national pay increase of $12,898.
Only in three places did employees fare higher: Washington, DC (wages increased by $20,488), Washington state ($19,344) and New Hampshire ($17,368).
Now, whenever you consider the nasty 19.5% increase in the price of living, California's inflation-adjusted increase over 4 years is just $1,054. Yes, 93% less.
This small increase in purchasing power earned Americans a mediocre twenty sixth place amongst states, just a number of dollars above the national increase of $976.
In California, the salary is barely enough to cover the price of living totally free, which is an unlimited burden for people living in areas where household funds are very tight.
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