If your boss seems a little tighter with raises these days, you\u2019re not imagining things. Southern California pay hikes got smaller, while the cost of living just won\u2019t quit.<\/p>\n
To get a handle on the job market, my trusty spreadsheet<\/a> peeked at the Bureau of Labor Statistics\u2019 first-quarter Employment Cost Index<\/a>. 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<\/a> as the yardstick.<\/p>\n 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.<\/p>\n That increase also ranked poorly among national peers, just the ninth-highest of the 15 regions.<\/p>\n This is a big shift from the last five years, when wage increases in Southern California\u00a0averaged 4.9%. From 2021 to 2025, the region had the highest raises among all 15 regions.<\/p>\n Put another way, raises at the start of 2026 are just 63% of what we\u2019ve gotten used to.<\/p>\n Wages elsewhere<\/p>\n It\u2019s not just a local story. Raises are under pressure in plenty of places.<\/p>\n Nationwide, wages went up 3.4% over the past year \u2013 beating Southern California hikes for the third straight quarter.<\/p>\n 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.<\/p>\n 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%.<\/p>\n Comparing this year\u2019s 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.<\/p>\n Minneapolis did the worst, with a 1% raise, which is only 23% of its five-year average.<\/p>\n Inflation\u2019s cut<\/p>\n Numerous Southern Californians are struggling to balance household budgets.<\/p>\n One reason is likely that Southern California pay raises are just barely outpacing inflation, so your paycheck\u2019s buying power has only inched up.<\/p>\n The national Consumer Price Index went up 2.7% in the first quarter, so Southern California\u2019s 3.1% wage increase was just 0.4 percentage points above inflation.<\/p>\n This was the 12th consecutive quarter in which local raises exceeded the cost of living. Only Seattle has a longer streak, at 13 quarters.<\/p>\n Follow local housing with our free \u201cHome Stretch\u201d email newsletter. SIGN UP HERE!<\/a><\/p>\n However, at the start of 2026, the gap between raises and inflation for Southern California workers was the second-smallest among those 12 quarters.<\/p>\n Across the country, raises were 0.7 percentage points higher than inflation, the fourth-smallest gap over the same 12 quarters.<\/p>\n Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com<\/a><\/p>\n