By HOWARD FINE
The health care industry might be in dire financial straits, but you would never know it by looking at the average salaries for some health care occupations in the L.A. area.
Already posting some of the highest average salaries in L.A. County mostly in the six-figure range chiropractors, dentists, pediatricians and hospital administrators all have seen their average pay shoot up by 10 percent or more in the last year. Those hefty pay raises, more than twice the national and local averages, even outpace gains made by high-flying information technology workers and financial investment specialists.
The jump in health care salaries is just one of the findings of the second annual salary survey prepared for the Business Journal by the Economic Research Institute of Redmond, Wash.
From neurosurgeons pulling down an average of nearly $503,000 a year to fast-food workers struggling to get by on $14,300, the survey identified average L.A. County salaries for 100 select occupations that generally reflect the broader economy.
Besides health care, technology also saw significant increases not surprising considering the sector's ongoing boom in Internet-related businesses. Over the last year, computer network administrators, programmers and software designers all saw their average salaries jump between 8 percent and 10 percent.
Overall, the average salary increase for the 100 occupations surveyed is 4.9 percent, while the median salary increase is about 4.1 percent. (The median is the point where half the salaries are above and half below.)
These figures are in line with the 4 percent to 5 percent salary growth found in other salary surveys. Just last week, human resources consulting firm William Mercer Inc. released a study showing salary growth in L.A. averaging between 4.0 percent and 4.6 percent, depending on the employee category.
Throughout the region, employers have been reporting difficulties in finding highly skilled workers, which, economists say, is a big reason behind the rapidly escalating salaries in areas like health care and technology.
"We are seeing substantial increases in health care job growth and business services which includes computer-related positions as well as on the investment side of the financial services sector," said Esmael Adibi, director of the A. Gary Anderson Center for Economic Research at Chapman University.
In dollar terms, the top five of the 100 occupations surveyed are all health care jobs, and in terms of percentage increase, four of the top five jobs are in health care.
Besides neurosurgeons ($502,947 average salary), other occupations in the top five are non-surgical cardiologists ($262,679), hospital administrators ($230,943), orthodontists ($211,486) and psychiatrists ($200,574). The highest-paid non-medical position on the list is chief financial officer, with an average salary of $166,859.
"What you are seeing happening in health care is the impact of an aging population," said Jim Lott, a spokesman for the Healthcare Association of Southern California. "An older population demands more health care resources, which in turn creates escalating pay scales. You also have new technologies that create more demand for treatment, as conditions that were once regarded as too expensive to treat are now becoming more affordable."
That, he said, is part of the reason why health maintenance organizations are finding it increasingly difficult to keep the lid on health care costs.
At the low end of the scale are fast-food workers ($14,385), parking-lot attendants ($16,514), house cleaners ($17,093), waiters/waitresses ($17,312 not including tips), and farm workers ($18,098).
Only three of the 100 occupations surveyed suffered declines in average pay over the past year, despite the booming economy and low unemployment rate. Those categories are real estate agents, truck drivers and petroleum engineers. One reason for the 3.6 percent decline in pay for real estate agents could be the move away from base salaries toward commissions.
The ERI figures compiled for the Business Journal from various government and private salary surveys represent base wages and salaries, not the more widely reported personal income levels, which grew at a substantially faster rate over the last year. The personal income figures include stock options and other financial incentives, in addition to salaries.
Statewide, according to estimates in Gov. Gray Davis' revised May budget, personal income grew about 6.6 percent from 1998 to 1999. (No current personal income figures are available for L.A. County.)
Part of the reason for the growing disparity between personal incomes and salaries is the shift toward variable pay.
"With lots of jobs today, we are seeing a tendency toward slower increases in base pay and more turning to variable pay," said Marvin Dertien, an ERI analyst. "The variable pay can take several forms, from profit sharing and performance bonuses to stock options and IPO payouts."
Nonetheless, the salary figures point to a robust regional economy. Unemployment in Los Angeles County has plunged from the early-'90s recession highs of 10 percent to a seasonally adjusted 5.5 percent in July. And while there are still pockets of high unemployment, especially in inner-city communities, there also are suburbs in the county where the unemployment rate has dipped below 3 percent, such as in the South Bay beach cities. In certain areas, there is intense demand for both skilled and unskilled workers.
"The lower the unemployment rate, the higher the premium paid to induce people to leave their existing job or to attract people from the outside," said Tom Lieser, executive director of the UCLA Anderson Forecast.
Adibi noted that 80 percent of the job categories had salary growth outpacing the current 2 percent rate of inflation. So, on average, the real purchasing power of the salaries in these 100 occupations increased by 3 percent, he pointed out.
But one observer of the local economy said the salaries seem concentrated at the high end of the scale.
"There are many, many more low-paid workers in L.A. than highly paid ones, (and the low-pay workers) are seeing only a 1 percent or 2 percent growth in their salaries," said Juan Garcia, director of research services for the Employers Group, a statewide human resources consulting organization based in L.A.
He noted that the 100 occupations in the Business Journal survey only include a handful of job categories with salaries below $20,000 a year, despite the fact that nearly one-third of all Angelenos earn less than $20,000.
Also taking issue with ERI's L.A. salary findings were some health care industry officials. "I can tell you that 60 percent of physicians in this state saw their incomes decrease in the last year, while only 10 percent saw increases," said Jack Lewin, chief executive of the California Medical Association, who has his own family practice.
In addition to year-over-year salary comparisons, ERI also supplied the Business Journal with average salary levels for several occupations in the city of L.A., as well as in New York and Chicago. Overall, salary levels here generally lag New York but are slightly higher than Chicago.
"That makes sense, given that New York is generally a more expensive place to live and Chicago is about as expensive or maybe even slightly less expensive than L.A.," Adibi said.
But ERI's Dertien said the figures show that the average wage gap between Chicago and L.A. has narrowed in the last three years, while New York has been pulling away.
Possible explanations for the bigger salary hikes include more rapidly accelerating living costs in those cities especially New York as well as tighter labor markets, Dertien said.
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