Bay Area workers earn well above U.S. average
Wages across much of the Bay Area have rocketed far above the national average, a federal Bureau of Labor Statistics report reveals.
Santa Clara County’s wages are 59 percent above the national average, while the San Francisco-San Mateo metro area is 53 percent higher, and East Bay workers command wages that are 26 percent over the U.S. average, the report shows.
The wage gap compared with the country as a whole reflects the Bay Area’s concentration of so many highly skilled workers in one region.
“It’s a unique space that we live in, both in terms of demand and the sheer size and wealth of the tech industry,” said Ben Bajarin, a principal analyst with Campbell-based Creative Strategies, a market researcher that tracks the tech sector. “This is a dynamic that you will not see in any part of the country or anywhere else in the world.”
The average hourly wage is $37.98 in Santa Clara County, $36.61 in the San Francisco-San Mateo metro area and $30.17 in the East Bay.
The United States average hourly wage is $23.86, the government survey states. The figures for the annual survey were current as of May 2016, the most recent time period available.
“This is extraordinary how much higher the wages are in the Bay Area,” said Russell Hancock, president of Joint Venture Silicon Valley, a nonprofit group consisting of business, government, academic and labor leaders. “We have a higher cost of living here in the Bay Area, and
employers have to pay more to hire and retain employees.”
San Francisco-San Mateo area wages rose much faster than those of its Bay Area neighbors and the nation as a whole, rising 4.7 percent during a one-year period ending in May 2016.
The Santa Clara County wage increase of 0.5 percent and the East Bay rise of 1.5 percent over the same period were slower than the national average rise of 2.7 percent, even though the outright level of wages in both areas exceeded the U.S. average.
“We have great jobs in a great place to live, so people are willing to pay a higher share of their income to live here,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.
Bay Area workers are seeing the cost of living — and not just home prices — chew up even more of their paychecks. The region’s consumer prices soared in April, triggering the worst bout of inflation since 2001, the year of the dot-com collapse and the 9/11 terrorist attacks, according to a federal government report issued in mid-June. The Bay Area’s inflation rate jumped at an annual rate of 3.8 percent.
Prices have skyrocketed for natural gas and electricity service, and for gasoline, along with housing costs. The cost of renting jumped 6.2 percent, while the cost of owning a home rose 6.5 percent.
“We have a critical shortage of highly skilled people, so employers have to pay them much more,” Hancock said. “We have an economy in an upward spiral, and it’s driven by the competition for talent. But that upward spiral is also driving costs higher for just about everything.”