JTF WagesJTF
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string(4398) "THE CALIFORNIA ECONOMY: ARE WAGES TOO HIGH? OCTOBER 2008 ? ? CALIFORNIA WORKERS ARE PAID MORE THAN WORKERS IN THE REST OF THE NATION. The1average1hourly1wage1in1California1was19.7%1higher1than1the1national1average1in12006.11Taking1 into1account1workers?1demographics,1occupations,1and1industries,1California?s1wage1premium1is1 even1higher:1111.5%.11This1means1that1a1California1worker1earns,1on1average,111.5%1more1than1a1 worker1with1similar1demographics1and1a1similar1job1outside1California.11Why1is1the1wage1premium1 higher1than1the1difference1in1average1hourly1wage?11The1primary1reason1is1that1California1has1a1 higher1share1of1Hispanics,1non,citizens,1non,native1English1speakers,1and1workers1without1a1high1 school1diploma1?1all1of1whom,1on1average,1receive1lower1wages.11 ? ? THE CALIFORNIA WAGE PREMIUM HOLDS FOR DIFFERENT GROUPS AND OVER TIME. The111.5%1premium1in120061is1higher1?1but1only1slightly1?1than1in1the1recent1past:11The1state?s1wage1 premium1was19%1in120001and110.8%1in11990.11The1premium1is1similar1for1women1(12.3%)1and1men1 (10.6%),1and1for1workers1with1college1degrees1(12.8%)1and1those1without1(10.7%).11The1premium1is1 somewhat1higher1in1service1industries1(12%)1than1in1manufacturing1industries1(7.4%).11 ? ? CALIFORNIA?S WAGE PREMIUM IS AMONG THE HIGHEST IN THE NATION. Only1Connecticut,1New1Jersey,1and1Washington,1D.C.,1pay1higher1wages1than1California1for1workers1 with1similar1demographics1and1a1similar1job:11The1wage1premiums1in1those1areas1are131to161percent1 higher1than1in1California.1 ? ? WAGES ARE HIGHEST IN THE BAY AREA, BUT MOST WORKERS IN THE STATE ARE PAID A PREMIUM. Average1wages1?1before1adjusting1for1demographics,1occupation,1and1industry1?1are1highest1in1San1 Jose1and1the1San1Francisco/Oakland1area.11This1is1partly1because1the1Bay1Area1has1high,paying1 industries1and1highly1educated1workers.11The1wage1premium1in1these1two1areas1is123%.11However,1 the1low1wages1in1much1of1the1Central1Valley1are1also1explained1by1demographics,1occupation,1and1 industry.11For1instance,1average1wages1are110%1lower1in1Fresno1than1in1other1states,1but1Fresno1 workers1actually1enjoy1a15%1wage1premium1relative1to1similar1workers1in1similar1jobs1in1other1states.1 ? ? CALIFORNIANS GET PAID MORE BECAUSE THEY ARE MORE PRODUCTIVE. Do1high1wages1mean1California1is1a1worse1place1to1do1business?11No,1because1California1workers1 are1more1productive.11Average1annual1earnings1per1worker1are112%1higher1in1California1than1in1the1 rest1of1the1nation,1but1the1average1annual1output1per1worker1is113%1higher.11[These1statistics1are1 derived1from1a1survey1of1businesses,1which1yields1different1earnings1gaps1than1the1household1 survey1data1used1above.]11The1higher1productivity1of1California1workers1fully1offsets1their1higher1 earnings.11The1ratio1of1productivity1to1earnings,1although1higher1in1California1than1in1the1nation1 overall,1is1highest1in1Alaska1and1Wyoming,1both1energy,rich1states.11California?s1neighbors1?1 Nevada,1Oregon,1and1Arizona1?1have1lower1pay1and1lower1output1per1worker.11 www.ppic.org Average Wage and Wage Premium, Relative to Rest of U.S. 1 Wage premium Avera g e wa g e Tulare Fresno Bakersfield Modesto Santa Barbara San Bernardino Long Beach Los Angeles - Stockton Santa Rosa Sacramento San Diego V entura OaklandSan Francisco - San Jose Riverside - Visalia- -30 - 20-10010 % 2030 40 50 Salary and Output Per Worker, Selected States, Relative to U.S. www.ppic.org A nnual output per worke r A nnual salar y p er worke r - 20 - 30 New York California Texas Alaska Arizona Nevada Florida Oregon Wyoming - 100102030 40 50 % Note: Calculations of wage premium controlled for education, experience, race and ethnicity, gender, marital status, number of children, full-time vs. part-time employment, citizenship, language, metropolitan area location, detailed occupation, and detailed industry. Sources: U.S. Census Bureau. Bureau of Labor Statistics. Bureau of Economic Analysis. Contact: Jed Kolko"
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string(4398) "THE CALIFORNIA ECONOMY: ARE WAGES TOO HIGH? OCTOBER 2008 ? ? CALIFORNIA WORKERS ARE PAID MORE THAN WORKERS IN THE REST OF THE NATION. The1average1hourly1wage1in1California1was19.7%1higher1than1the1national1average1in12006.11Taking1 into1account1workers?1demographics,1occupations,1and1industries,1California?s1wage1premium1is1 even1higher:1111.5%.11This1means1that1a1California1worker1earns,1on1average,111.5%1more1than1a1 worker1with1similar1demographics1and1a1similar1job1outside1California.11Why1is1the1wage1premium1 higher1than1the1difference1in1average1hourly1wage?11The1primary1reason1is1that1California1has1a1 higher1share1of1Hispanics,1non,citizens,1non,native1English1speakers,1and1workers1without1a1high1 school1diploma1?1all1of1whom,1on1average,1receive1lower1wages.11 ? ? THE CALIFORNIA WAGE PREMIUM HOLDS FOR DIFFERENT GROUPS AND OVER TIME. The111.5%1premium1in120061is1higher1?1but1only1slightly1?1than1in1the1recent1past:11The1state?s1wage1 premium1was19%1in120001and110.8%1in11990.11The1premium1is1similar1for1women1(12.3%)1and1men1 (10.6%),1and1for1workers1with1college1degrees1(12.8%)1and1those1without1(10.7%).11The1premium1is1 somewhat1higher1in1service1industries1(12%)1than1in1manufacturing1industries1(7.4%).11 ? ? CALIFORNIA?S WAGE PREMIUM IS AMONG THE HIGHEST IN THE NATION. Only1Connecticut,1New1Jersey,1and1Washington,1D.C.,1pay1higher1wages1than1California1for1workers1 with1similar1demographics1and1a1similar1job:11The1wage1premiums1in1those1areas1are131to161percent1 higher1than1in1California.1 ? ? WAGES ARE HIGHEST IN THE BAY AREA, BUT MOST WORKERS IN THE STATE ARE PAID A PREMIUM. Average1wages1?1before1adjusting1for1demographics,1occupation,1and1industry1?1are1highest1in1San1 Jose1and1the1San1Francisco/Oakland1area.11This1is1partly1because1the1Bay1Area1has1high,paying1 industries1and1highly1educated1workers.11The1wage1premium1in1these1two1areas1is123%.11However,1 the1low1wages1in1much1of1the1Central1Valley1are1also1explained1by1demographics,1occupation,1and1 industry.11For1instance,1average1wages1are110%1lower1in1Fresno1than1in1other1states,1but1Fresno1 workers1actually1enjoy1a15%1wage1premium1relative1to1similar1workers1in1similar1jobs1in1other1states.1 ? ? CALIFORNIANS GET PAID MORE BECAUSE THEY ARE MORE PRODUCTIVE. Do1high1wages1mean1California1is1a1worse1place1to1do1business?11No,1because1California1workers1 are1more1productive.11Average1annual1earnings1per1worker1are112%1higher1in1California1than1in1the1 rest1of1the1nation,1but1the1average1annual1output1per1worker1is113%1higher.11[These1statistics1are1 derived1from1a1survey1of1businesses,1which1yields1different1earnings1gaps1than1the1household1 survey1data1used1above.]11The1higher1productivity1of1California1workers1fully1offsets1their1higher1 earnings.11The1ratio1of1productivity1to1earnings,1although1higher1in1California1than1in1the1nation1 overall,1is1highest1in1Alaska1and1Wyoming,1both1energy,rich1states.11California?s1neighbors1?1 Nevada,1Oregon,1and1Arizona1?1have1lower1pay1and1lower1output1per1worker.11 www.ppic.org Average Wage and Wage Premium, Relative to Rest of U.S. 1 Wage premium Avera g e wa g e Tulare Fresno Bakersfield Modesto Santa Barbara San Bernardino Long Beach Los Angeles - Stockton Santa Rosa Sacramento San Diego V entura OaklandSan Francisco - San Jose Riverside - Visalia- -30 - 20-10010 % 2030 40 50 Salary and Output Per Worker, Selected States, Relative to U.S. www.ppic.org A nnual output per worke r A nnual salar y p er worke r - 20 - 30 New York California Texas Alaska Arizona Nevada Florida Oregon Wyoming - 100102030 40 50 % Note: Calculations of wage premium controlled for education, experience, race and ethnicity, gender, marital status, number of children, full-time vs. part-time employment, citizenship, language, metropolitan area location, detailed occupation, and detailed industry. Sources: U.S. Census Bureau. Bureau of Labor Statistics. Bureau of Economic Analysis. Contact: Jed Kolko"
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