That recent pay raise you’re enjoying may actually be costing you.
Southern California worker bees are seeing some of the nicest increases in wages since the recession ended. But employers must somehow pay for higher labor expenses, and it appears bosses are opting to raise local prices.
Look at April’s consumer price index for the five-county region. Year-over-year, the cost-of-living was up 2.7 percent, the third consecutive month at this level. The last time local inflation was this strong was 2011.
Surging housing costs are the biggest factor, with the index showing the cost of the roof over your head jumping 4.3 percent from April 2016. Higher gasoline prices don’t help a shopper’s budget either.
But another driver of higher inflation is a surge in the cost of services around the region. Look at annual inflation rates in some typically labor-intensive industries:
• Medical care costs are up 4.3 percent, though healthcare pricing is always tricky to decipher and this index does include drug expenses.
• Then there are the costs for what’s called “other” personal services — every chore from haircuts to laundry to tax accounting to funeral costs — rose 3.7 percent.
And ponder the pricing pattern with feeding a family.
Food-away-from-home pricing is up 3.8 percent while food-at-home costs are actually down 1.2 percent. This inflation gap has existed for over a year. Staffing expenses at eateries are a key difference with everything from minimum-wage hikes to labor shortages, creating financial challenges for owners along with higher menu prices.
So recent salary increases could be a case of be-careful-what-you-wish-for. Because if your boss is spending more on you, some other boss may be trying to get more out of your suddenly larger paycheck.