Local wage increases ranked poorly among national peers, only the ninth-highest of the 15 regions.
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..
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 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.
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. 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. 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.
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.
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