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Workers-Feeling the Squeeze, Higher Salaries Not Offsetting Higher Costs

Austin Business Journal April 29th-May 5th, 2022 pp14-16 |Paycheck Playbook|Salaries|”Wages are rising fast in Austin but not fast enough for many” by Colin Pope

Read the Austin Business Journal for all the details

Summary by 2244

Data above from the U.S. Census Bureau of those reporting 60% has some difficulty in paying expenses; 26% a little difficult, 19% somewhat difficult, 14.7% very difficult. See by age to examine further-older Americans were better off about 50% versus nearly 70% for younger age groups.

We are all painfully aware that we’re experiencing housing price inflation in Austin as well as general inflation for everything from fuel to groceries in Austin and elsewhere. We are also at a very low unemployment rate and that is driving employers to compete hard for staff resulting in rapidly rising wages. For Austin, and some other Tech Towns, rising average wages are influenced largely by Big Tech hiring where Year-Over-Year (YOY) increases might be 10% while others in the market, having stayed put in their jobs for years, are seeing only a 3% increase.

The biggest % increases YOY comparing February 2022 to February 2021 were in order the top five; Sarasota FL +19%, Akron OH+17.4%, Virginia Beach/Norfolk VA +15.8%, Palm Beach FL +15.4% and Stockton CA+14.2%. Notables for Texas; McAllen +10.8% Rank 11, Austin +10.4% Rank 13, Dallas-Fort Worth +9.1% Rank 23, San Antonio +9% Rank 24, El Paso +8.5% Rank 26, and Houston +8.5% Rank 27.

As they say “you don’t buy groceries etc.” with percentages. What is the YOY wage picture? Highest is San Jose CA over the same period February 2022 as compared to February 2021 $1,758 vs $1761 -0.2%, Dallas $1,212 vs $1,111 +9% Rank 12 and Austin $1,158 vs $1,048 +10.% Rank 18. Across the metro areas in America the average was $920.30 vs $872.59 or +5.7% or $48 more per week in February 2022 vs. February 2021.

Revenue is one thing but what you take home after paying all your bills is what really matters. It’s your household net profit. And we know this is currently the real challenge for workers. As property valuations have increased in central Texas, partly due to low supply and big demand, rents have increased well beyond 10%. One example given, in the ABJ article is a home in “Manor near the new Tesla factory may go from $2,000/month to $3,000/month. The article claims that “in some cases, [housing costs] have doubled in the past year or two.” While rising interest rates will slow home-buying demand given the low supply in Austin, it’s unlikely prices will drop. For renters, the increase in lending rates could give yet another reason for apartment owners to raise rents. As mentioned above, add in rising fuel and other prices including groceries and most workers are feeling the pinch in their household bottomline.


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