Southern California wages up 3.1%, the smallest raises in 7-plus years
If your boss seems a little tighter with raises these days, you’re not imagining things. Southern California pay hikes got smaller, while the cost of living just won’t quit.
To get a handle on the job market, my trusty spreadsheet peeked at the Bureau of Labor Statistics’ first-quarter Employment Cost Index. This report tracks swings in what employers pay workers across 15 regions, including our five-county slice of Southern California. To assess the buying power of paychecks, raises were compared with inflation, using the national Consumer Price Index as the yardstick.
In the first quarter, the average Southern California paycheck rose 3.1% from a year ago. The last time local raises were smaller was in the third quarter of 2018, seven and a half years ago.
That increase also ranked poorly among national peers, just the ninth-highest of the 15 regions.
This is a big shift from the last five years, when wage increases in Southern California averaged 4.9%. From 2021 to 2025, the region had the highest raises among all 15 regions.
Put another way, raises at the start of 2026 are just 63% of what we’ve gotten used to.
Wages elsewhere
It’s not just a local story. Raises are under pressure in plenty of places.
Nationwide, wages went up 3.4% over the past year – beating Southern California hikes for the third straight quarter.
However, pay hikes for American workers have also slowed, falling from an average of 4.3% over the last five years. So U.S. raises are now 80% of the norm.
As for pay-hike extremes, Miami saw the largest wage increase in the first quarter at 4.6%. Minneapolis had the smallest at 1%. In the Bay Area, wages rose 4%.
Comparing this year’s raises with the past five years, Chicago came out on top. Workers there received a 4.1% raise, which is 106% of their five-year average.
Minneapolis did the worst, with a 1% raise, which is only 23% of its five-year average.
Inflation’s cut
Numerous Southern Californians are struggling to balance household budgets.
One reason is likely that Southern California pay raises are just barely outpacing inflation, so your paycheck’s buying power has only inched up.
The national Consumer Price Index went up 2.7% in the first quarter, so Southern California’s 3.1% wage increase was just 0.4 percentage points above inflation.
This was the 12th consecutive quarter in which local raises exceeded the cost of living. Only Seattle has a longer streak, at 13 quarters.
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However, at the start of 2026, the gap between raises and inflation for Southern California workers was the second-smallest among those 12 quarters.
Across the country, raises were 0.7 percentage points higher than inflation, the fourth-smallest gap over the same 12 quarters.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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This story was originally published June 8, 2026 at 8:24 AM.