Hourly Wages in the Southland: A Tale of Extremes

National data show hourly wages rising for production workers in general, and that certainly applies to high-tech Southern California firms, where competition for help is fierce.

At Litronic, a computer firm in Costa Mesa, positions for computer programmers and hardware engineers have been open for months, leading the company to reevaluate its entire compensation package and offer new benefits, said Vice President Chandra Shah.

“We’re almost giving a finder’s fee to our in-house programmers if they can bring in qualified applicants,” she said.

But in other industries where candidates are ample--entry-level service jobs, for example--it’s a different story.

At Six Flags California, the Valencia-based amusement complex encompassing Magic Mountain and Hurricane Harbor, entry-level wages of $5 an hour for seasonal help have remained flat for years, spokeswoman Bonnie Rabjohn said.

“In the past three to five years, we’ve been able to staff fully the park during our peak seasons . . . with no problem,” she said. That means 3,500 employees.

Such is the divergence of incomes in Southern California, where highly skilled workers can name their price in industries where wages are soaring, while their less skilled compatriots take what they can get in businesses where wages have stagnated.

“We’re in a different position than the rest of the country,” said Jack Kyser, chief economist with the Economic Development Corp. of Los Angeles County. “A lot of different areas with tight labor markets see competition to get workers even into fast-food chains. . . . But in Los Angeles County, we still have about an 8.1% unemployment rate,” compared with 7.2% in California as a whole and 5.3% in the United States.

Last week, the Labor Department reported that hourly wages for non-managerial workers nationwide had risen in June for the second straight month, by 9 cents to $11.82 an hour.

The numbers suggested that, at least on a national level, incomes were on the rise after a long period of stagnation.

But in Southern California, where unemployment remains relatively high and industries such as aerospace and construction remain weak, wage increases occur only where they are needed, executives said.

In Southern California, merit wage increases for hourly employees averaged about 3.8% in 1995, according to a survey of 92 industrial companies conducted in May by Organization Resources Counselors, a Los Angeles-based consulting firm.

That same year, the inflation rate was 2.5%, as measured by the national consumer price index for urban consumers.

But the disparities were readily apparent: In the industry with the fastest-growing pay--biotechnology--wages rose 5.48% in 1995. In the slowest-growing industry surveyed--health care--wages were up 3.32%.

The survey did not cover other fast-growing industries, such as computer animation or multimedia.

Animation jobs are booming at companies such as Walt Disney, DreamWorks SKG, Warner Bros. and Hanna-Barbera Productions, driving salaries up.

“We have minimum rates that go up at a steady rate, on the average about 3% a year,” said Jeff Massie, a spokesman at the Motion Picture Screen Cartoonists Union, Local 839, in North Hollywood. “But de facto wages are up a hell of a lot more than that.”

The union has seen its membership balloon from a low of 700 to 2,300 now. For part of this year, the union was adding 20 new members a week. Wages that once peaked at 50% over scale can now go as high as 500% above scale, Massie said.

“Our membership has been growing at the highest rate . . . in the history of the local, back to 1952,” he said. “Every one of our members is working on computers or as an adjunct to people working with computers.”

At DirectTV Inc., the direct-broadcast satellite service of Hughes Electronics Corp. in El Segundo, “we are in a growth phase,” spokesman Bob Marsocci said. The company has grown from 469 employees a year ago to 742 now.

Although he said he couldn’t discuss figures, Marsocci said the company’s wages and benefits have been growing to compare with those offered by other entertainment or high-tech firms.

At Amgen Inc., the Thousand Oaks biotechnology giant, qualified technicians, researchers and scientists are always at a premium.

“In our industry . . . a lot of competition [for employees] comes from the pharmaceutical industry, and it’s very competitive,” said Michael Murguia, Amgen’s human resources staffing manager.

With 4,200 employees worldwide, including 2,700 in Thousand Oaks, Amgen is still hiring: It is aiming at 800 to 1,100 new staff members in 1996.

To attract qualified help, Amgen offers a competitive salary: For a scientist with a doctorate, that can range from $70,000 to $80,000 to start. And Amgen reviews its salaries every year to see if it needs to increase them, Murguia said.

Amgen also hires less skilled help at lower salaries: The typical starting salary for clerical help may be in the $30,000 range, Murguia said.

For retail clerks in Best Buy Co.’s 20 Southern California stores, however, wages haven’t gone up in a year from their starting rate of about $6.80 an hour, said Phil Lee, regional manager for the Minneapolis-based consumer electronics retailer.

But as the local economy improves, it becomes harder to find qualified help even at that level, Lee said. Southern California wages “are higher than in [Best Buy stores in] the rest of the nation, and we’re still challenged to get the best-quality candidates,” he said.

Similarly, Universal Studios Hollywood, which has boosted its seasonal hiring of summer help by 40% to accommodate thecrowds coming to see the Jurassic Park ride, has nevertheless kept its starting wages flat at $5.15 an hour or so.