Inflation hit cities with tech-heavy workforces hard last year. Tech workers fortunate enough to avoid layoffs still found themselves confronting rising costs with little change in their pay.
Those national trends certainly touched down in Los Angeles, but new data from the Bureau of Labor Statistics (BLS) show that the city of angels was the only major metro area that saw its wage growth grow by nearly 6% while also outpacing the consumer price index, which was around 5%. Basically, LA was the only area where adjusted pay actually came out on a net positive.
So, what does this mean for tech workers in LA County?
Relocation might be worth it
For tech job hunters outside of Los Angeles really feeling their wallets tightening because of inflation in the last year it might make sense to relocate. In addition, workers still determined to pursue technology jobs in the wake of layoffs might find it beneficial to look towards LA for new job prospects.
With clear indication that LA is the only city surveyed by the BLS to raise wages to outpace inflation, it might appear a more attractive locale for tech workers to set up shop. Still, tech employees might find that with a county-wide labor workforce of 4.7 million, there might be more competition for higher-paying jobs in LA than other cities.
Companies may look to cut costs
On the downside, local tech firms that have already announced swaths of layoffs over the last year might look at this data as a sign they’re overpaying their employees.
Overall, the average tech workers’ wage in LA in 2021 was around $103,000 annually. Employers may see that and feel they’re paying too much, but it’s still less than what a tech company might have to pay when compared to other major tech hubs like New York City or Seattle.
It’s unclear if this data from the BLS will be enough to motivate CEOs to set up shop elsewhere. But since C-suite players are always looking at the bottom line, it’s possible this data could compel them to feel they’re overpaying for labor costs, and lead them to consider relocating to an area with more stagnant wage growth.
Overall, it still pays to be in LA
Tech staff in LA should still be in a better position to negotiate wages – and navigate cost of living – than many other cities in the US. Even areas with higher wage growth, like Miami or Seattle, saw their gains far outpaced by the rise in consumer spending.
An additional encouraging datapoint for tech workers is that unemployment in California overall is dipping. California had the second largest decrease in joblessness from December 2021 to December 2022, ticking downward 2 percent, according to the BLS. The state added over 621,000 new non-farm jobs in 2022, second only to Texas.
The upshot? For a long time, LA has had to prove it can compete with other cities like New York, but the data is clear: for now, it pays more to be in LA than anywhere else in the U.S.