Labor Costs Soar in San Jose and Phoenix

(Bloomberg) -- Employers are shelling out an average of $53.65 per hour for a worker in San Jose. This is almost twice as much as in Miami.

That’s according to U.S. Bureau of Labor Statistics data for private industry workers in 15 selected metropolitan areas. Data by metro area is available for March 2019.

Employer costs for employee compensation averaged $36.61 per hour worked in June 2019. Wages and salaries averaged $25.12 per hour worked and accounted for 68.6% of these costs, while benefit costs averaged $11.48 and accounted for the remaining 31.4%, according to the report. Health insurance accounts for 8.3% of total compensation.

Total compensation costs in March 2019 for private industry workers ranged from $28.48 per hour in the Miami-Fort Lauderdale-Port St. Lucie, FL area to $53.65 per hour in the San Jose-San Francisco-Oakland, CA metro area. These figures include benefits costs.

Since the end of the recession in 2009, employee compensation costs have increased by more than 40% in Phoenix and San Jose. Costs for firms in the Washington D.C. and Detroit areas increased less than 10%.

Among the 15 selected areas, San Jose ranked first both in 2019 and 2009. New York moved to second from third; Seattle jumped to third from sixth, Boston dropped to fourth from second and Houston moved into the top five from eighth in 2009.

Employers in San Jose now pay $15.37 more per hour compared to a decade earlier. On a daily basis, this means an additional $123 expense per worker for firms -- five times the increase employers in Miami have faced since 2009.

To contact the reporter on this story: Alex Tanzi in Washington at atanzi@bloomberg.net

To contact the editors responsible for this story: Alex Tanzi at atanzi@bloomberg.net, Chris Middleton

©2019 Bloomberg L.P.