CLSA in the San Diego Union-Tribune: Is your paycheck keeping up with San Diego’s inflation?
San Diego’s workforce has winners and losers, with some wages failing to keep up with inflation
By BRITTANY MEILING and PHILLIP MOLNAR
Sept. 2, 2019
If you have been working in San Diego County for the last decade and feel like you are in worse financial shape now, there might be a reason for that. Sluggish wage growth, exacerbated by rising housing costs, have eroded workers’ buying power.
Taking into account yearly inflation — which considers the cost of such things as housing, gasoline and food — overall wages in the county have increased just 2 percent from 2008 to 2018. That’s according to an analysis by the San Diego Union-Tribune of data from the U.S. Bureau of Labor Statistics.
Yearly inflation is typically around 2 percent but tends to run hotter in San Diego due to rapidly climbing housing prices. Without at least a 2 percent raise each year, many San Diegans may well have seen their financial situation deteriorate while staying in the same job.
There are some signs that wages are up nationally in 2019, which suggests that the financial picture for many residents may have brightened since the release of the 2018 data. Also, wages don’t take into account employee benefits, such as good health care plans that can ease cost burdens.
Wage growth may also have been stunted by the long economic recovery from the Great Recession, which occurred in the early part of the decade covered in the wage analysis.
Alan Gin, economist at University of San Diego, argues, however, that even the modest increase in wages shows the quality of life for the majority of workers has improved.
Amid the data, though, there are clear winners and losers in the last decade, with some workers seeing their wages falling to keep up with inflation. After adjusting for the rising cost of living, some occupations are actually paid less than they were 10 years ago.
“Those people then are falling behind in terms of what is needed to live here,” Gin said. “They are being priced out of the market.”
Elementary school teachers saw gains in pay undercut by inflation the most, experiencing an 11 percent drop in real wages. Even with many teachers having better benefits than the average worker, union leadership says most can’t afford to live in the districts where they teach.
At the same time, those holding jobs in the computer and mathematical fields saw their wages increase by 9 percent, making for a very different San Diego experience for that group of workers.
The average wage for about 700 occupations in San Diego County as of 2018, taken from unemployment insurance data collected by the state.
Sean Karafin, a vice president at the San Diego Regional Chamber of Commerce, said many in the region like to blame slow wage gains on the so-called “Sunshine Tax,” a discount on wages for living in Southern California, but it is the wrong focus, he believes.
The biggest factor contributing to rising inflation in the county has been increased housing costs — for both renters and owners. Karafin said any wage gains workers are seeing are being diminished by the region’s slowdown in home building — which he argues is driving up prices for the region’s growing population.
Compared with the nation as a whole, it would appear that San Diego workers have fared worse than others. The average U.S. salary went up 5.7 percent during the same 10-year period, after being adjusted for the nation’s inflation rate.
Still, Karafin believes that San Diego is not alone in seeing wages stall. Economists cite globalization as a factor, which is creating increased competition, along with automation and people working multiple jobs as reasons that reported wages have seen no or little growth.
“I don’t think it is unique to San Diego. At all,” he said.
Winner: Technology workers
(Computer and Mathematical Occupations)
Highly skilled technology workers saw the third highest jump in wages over the past decade in San Diego County.
These workers include positions such as software developers, web developers, mathematicians and computer network architects.
Wages rose 9 percent (after inflation) from 2008 to 2018, to an average salary of $99,890.
“As demand for tech workers goes up, there’s a correlation in increasing salaries,” said Kevin Carroll, executive director of Tech San Diego, a trade organization. “Today’s reality is that talent is still scarce, and that’s putting pressure on salaries.”
The economic impact of this category is notable, considering the high wages and number of people employed. There were 53,720 workers in this group as of 2018, with 17,040 new jobs added since 2008 — a jump of 46 percent.
As software infiltrates every industry, these workers are no longer just employed by pure tech companies like Qualcomm and Intuit.
“The line between tech companies and non-tech companies is increasingly blurred,” Carroll said. “You don’t think of Petco as a tech company, but they employ well over 100 tech workers.”
When compared with other major technology markets, San Diego tech workers are still low paid, according to a recent report from Silicon Valley-based Hired. That means wages may still be heading north as competitive pressure pushes on employers.
Loser: Science workers
(Life, physical, and social science occupations)
Often lauded as one of San Diego’s most robust industries, this segment of science jobs saw surprisingly stagnant wages over the past 10 years when adjusted for inflation.
The category, which includes 23,530 workers, is comprised of many of the laboratory staffers who sustain the life science industry, such as chemists, biophysicists and biochemists, and biological technicians. The group also includes staff in physical and social sciences, like materials scientists and psychologists.
These workers are getting paid less as of 2018 than they were in 2008. When accounting for inflation, wages are down 2 percent. The average salary for this job pool is $84,600.
Joe Panetta, the president and CEO of biotech industry group Biocom, said some of these jobs have been affected by a changing industry.
“There are some jobs that have experienced reductions due to automation,” Panetta said. “For example, we are seeing fewer highly paid medicinal chemists and molecular biologists, and companies are outsourcing some of these types of tasks to contractors with certain specialties.”
Chemists were one of the worst hit occupation groups. Chemists’ inflation-adjusted wages have dropped 23 percent over the past decade.
Life, physical and social science jobs also have shrunk in number since 2008, down 1,370 workers, or 6 percent.
The data aren’t so bleak when you add in other life science-related occupations outside of this niche segment, said Mike Guerra, president and CEO of California Life Sciences Association. The CLSA’s annual life sciences industry report paints a different picture — at least in terms of job growth.
“Job creation is happening,” Guerra said in an email. “Biopharma and medical device employment in California combined grew 11.2 percent between 2013 and 2017. San Diego County is leading the way with strong life science employment, accounting for 48,400 life science professionals in 2017, reflecting an annual increase of 6,500 jobs from 2016.”