County Pay Hikes to Be Among Tops in U.S. : 6.3% to 6.7% Range Exceeded Only by San Diego in State
When Orange County area workers collect their paychecks in 1986, most will be pleased--if not surprised--to find that average annual salary increases in the area will rank among the highest in the nation.
Even with slumps expected to continue in some of the area’s largest industries--such as high tech and electronics--Orange County’s projected 1986 pay raises of 6.7% for top management, 6.4% for middle management employees and 6.3% for hourly workers--positions Orange County second only to San Diego County in the state and above all other major American cities surveyed, according to a study by the Newport Beach office of Towers, Perrin, Forster & Crosby, a New York-based management-consulting firm.
Nationwide Figures
Local pay hikes will far exceed average annual salary increases at more than 700 companies surveyed nationwide, which are projected at 6.1% for top management, 5.9% for exempt employees and 5.8% for nonexempt workers.
Both the local and national numbers are virtually identical to last year’s average pay raises, according to the survey which included responses from 90 companies in Orange and San Diego counties. In San Diego County, pay raises of 7.0% for top management, 6.9% for exempt employees and 6.8% for nonexempt workers were projected. Figures for Los Angeles were not available.
“It looks like 1986 will basically ditto 1985,” said Lawrence A. Wangler, a partner at Towers, Perrin. “No one seems to be moving aggressively in either direction.” He said the same trend has been in place for three years, a striking difference from 1979 through 1981, when high inflation led to double-digit pay increases.
About 94% Due Raises
About 94% of Orange County’s area employees are expected to receive raises, the same percentage as last year, according to the survey. It said that most companies lump merit and cost-of-living raises into a single pay increase.
“While there have been some local layoffs and some businesses have been cutting back, the pay raises indicate that most companies want to continue to reward their good people and keep them,” Wangler said.
Also, because the cost of living--particularly housing--is higher in Orange and San Diego counties than in most other areas, local companies feel obligated to give bigger raises, Wangler said.
The numbers, however, can sometimes be deceiving, according to a Towers, Perrin spokesman in New York. “Things can quickly change on a month-by-month basis,” he said. And while Houston ranked among the lowest of cities surveyed with projected 1986 pay increases of about 5.7%, there are also a number of companies in the Houston area that will raise salaries far above that rate, he pointed out.
Some Exceptions
But some local companies simply cannot afford the bigger pay raises. At Printronix Inc., for example, 1986 raises for all of the company’s 800 Irvine-area employees will be in the 4% to 5% range, Jerry King, vice president of human resources, said. Salaries of the company’s exempt employees will be reviewed for a second time at mid-year, he added.
The manufacturer of computer printers reported a $1-million second quarter loss last month, its second consecutive losing quarter. About 200 of the company’s local workers have been laid off since the beginning of the year.
Before establishing pay increases, Printronix checks with various trade associations and contacts other comparable firms in the area, King said. With relatively low pay increases, King said, “you always worry about how it will impact your work force. But, as you know, the computer industry has just come through some very rough times.”
CORPORATE PAY RAISE BUDGETS FOR 19 (% averages) ORANGE SAN DIEGO SAN LOS COUNTY COUNTY FRANCISCO ANGELES NEW YORK Top Management 6.7 7.0 6.3 NA 6.1 Salaried Employees 6.4 6.9 6.3 NA 6.0 Hourly Employees 6.3 6.8 6.3 NA 5.9
86 NATIONAL CHICAGO BOSTON HOUSTON AVERAGE Top Management 5.8 6.5 5.7 6.1 Salaried Employees 5.7 6.2 5.7 5.9 Hourly Employees 5.4 6.1 5.6 5.86
Source: Towers, Perrin, Forster & Crosby
