A raft of economic data released by the U.S. Bureau of Labor Statistics this week can best be described as two steps forward and one step back.
The good news is more businesses are opening and more people are finding work. However, those new employees are making less money.
The federal data tracks the number of business establishments in the state, total employees and the average weekly wage (pre-tax). This weeks’ release compares 2022 data to the same time in 2021.
Overall, employment has increased across the state by about 2.3 percent and employment increased in Los Angeles County by 2.2 percent year over year. Nationally, employment grew by 2.6 percent over the year, with 325 of the 355 largest U.S. counties reporting gains.
Among the largest counties in California, employment was highest in Los Angeles County (4,551,200) in December 2022. Together, the 28 largest California counties accounted for 93.1 percent of total employment within the state. Nationwide, the 355 largest counties made up 72.9 percent of total U.S. employment.
However, those individuals finding employment are doing so in lower paid jobs, dragging down the average weekly wage.
Among the 28 large California counties, 21 reported average weekly wage losses from the fourth quarter of 2021 to the fourth quarter of 2022. San Francisco County (-22.6 percent), San Mateo County (-20.7 percent), and Santa Clara County (-15 percent) had the largest year on year decreases in the state. Merced County had the largest over-year increase at 1.6 percent. Annual wage changes among California’s other 24 large counties ranged from -5 percent in Santa Barbara County to 0.5 percent in San Luis Obispo County.
Statewide, average weekly wages declined by about 6.9 percent to $1,679 but California remains fourth in the nation for average wages.
The District of Columbia is first with an average wage of $2,291, Massachusetts is second at $1,790 and New York is third $1,736. Arkansas is last at $1,065 followed by West Virginia at $1,067 and Oklahoma at $1,073. The national average is $1,385.
Los Angeles County saw wages decline by about 3.5 percent to $1,637 putting it sixth in the state behind Santa Clara ($3,329), San Francisco ($2,962), San Mateo ($2,939), Alameda ($1,791) and Marin ($1,782).
Within Los Angeles County’s private industry, health care and social assistance accounted for the largest number of employees but economists with the U.S. Bureau of Labor Statistics said the much of recent growth was in the hospitality industry and those are lower paying jobs which is part of the reason average wages have dropped.
In Los Angeles County, information workers have the highest average weekly wage at $3,032 followed by financial activities at $2,513 and professional/business services at $1,988. Education/health services are the lowest at $1,169 followed by leisure/hospitality at $1,214 and trade/transportation/utilities at $1,280.
The new data comes at the start of the fiscal year and coincides with increases in the minimum hourly wage and just as the local union representing hotel workers begins strikes over a new contract.
California’s minimum wage is currently $15.50 per hour. That is among the highest in the country with only the District of Columbia ($16.50) and Washington state ($15.74) at a higher level.
Of the 40 cities and counties that have a minimum wage above $15.50, Santa Monica ranks 20th at $16.90. West Hollywood has the highest base minimum wage at $19.08. Specialized minimum wage levels exist for some specific industries (such as $19.73 for hotel workers and businesses operating on hotel property in Santa Monica) or in some cases where the base rate includes a percentage adjustment for inflation.
Those minimum wages all fall short of the amounts experts say individuals need to make to maintain a "living wage" in Los Angeles County. According to MIT’s Living Wage Calculator, individuals would need to make between $21 and $76 an hour (working a 40 hour week) depending on the number of individuals working in the household and the number of children.
After picketing at several hotels over the July 4 holiday, the hospitality union said this week more strikes are on the horizon unless the hotel owners agree to a new contract.
The recent protests are over contracts that exceed minimum wage standards. According to the union, its lowest paid workers in hotels range from $20 to $25 an hour but may not work full time. They are demanding an immediate $5-an-hour raise with an additional $3-an-hour raise for 2024 and 2025 plus benefit increases. Hotel owners have countered with a proposed wage increases of $2.50 per hour in the first 12 months of the contract and $6.25 an hour over the next four years at current health care and pension contribution levels.
