Wages and benefits for private industry employees in the Bay Area are rising more quickly than in any other major metro region in the country and twice as fast as the national average, a government survey released Tuesday shows.

"It's tech. High tech is driving this," said Christopher Thornberg, founding partner with Beacon Economics. "The Bay Area has one of the strongest economies in the nation."

Total compensation -- measured as the combination of wages, salaries and benefits -- for people working in private industry in the nine-county Bay Area rose 4.6 percent over the 12 months that ended in June, the U.S. Bureau of Labor Statistics reported.

During the same one-year period, total compensation rose 2 percent nationwide and by 4.1 percent in the Dallas-Fort Worth metro area, which was the No. 2 region in the country among 15 urban centers surveyed by the agency. The percent increases were not adjusted for inflation.

"This reflects the strong job growth in the high-wage industries in the Bay Area," said Jeffrey Michael, director of the Stockton-based Business Forecasting Center at University of the Pacific. "The recovery in the job market is stronger here in the Bay Area than other regions."

Wages and salaries -- excluding benefits -- rose 4.1 percent in the Bay Area and 1.9 percent nationwide.


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As examples of how the technology sector is helping to fuel job growth, Santa Clara County and the San Francisco-San Mateo-Marin region remain among the national leaders in employment gains. During the 12 months that ended in June, Santa Clara County posted a 3.5 percent increase in total payroll jobs, the San Francisco metro area was up 3.2 percent and the East Bay showed a 2.7 percent gain. The nationwide leader was Florida's Orlando-Kissimmee metro area, up 3.7 percent.

The upswing in Bay Area labor costs is strong enough to start triggering inflation, warned Scott Anderson, chief economist with San Francisco-based Bank of the West.

"You start to worry about a feedback loop between higher wages and rising prices in general," Anderson said. Already rising wages have pushed up prices for Bay Area homes, economists say.

"One reason why home prices are going through the roof is because of these strong wages," Thornberg said. "If you are one of the tech employees, home prices are not too expensive. But for everyone else, housing is too expensive."

Contact George Avalos at 408-859-5167. Follow him at Twitter.com/georgeavalos.

employee compensation

The nine-county Bay Area over the past year led the nation in average gains in total compensation -- the combination of wages and benefits -- in the private workforce. The Bay Area's 4.6 percent increase was more than double the national average gain of 2 percent. Other metro areas at the top of the list for compensation gains are:
Dallas-Fort Worth: 4.1 percent
Chicago: 2.8 percent
Boston: 2.5 percent
Atlanta: 2.2 percent
Houston-Baytown: 1.9 percent
New York City: 1.8 percent
Minneapolis: 1.8 percent
Los Angeles-Long Beach-Riverside: 1.5 percent
Philadelphia: 1.5 percent
Detroit : 1.5 percent
Source: U.S. Bureau of Labor Statistics