DENVER (KDVR) — Californians will be among the nation’s top earners in the next decade if payroll analysts are correct.
Tipalti, a payroll and expense automation company, analyzed wages and wage growth among U.S. states for the last decade. Analysts then predicted the average wages for 2031.
California has long been one of the nation’s top-earning states. If the state was its own country, it would have the fourth-largest economy in the world, Bloomberg analysis found.
In 2021, the average income in California was $85,741, Tipalti found. But by 2031, that number will easily soar past six figures, the company said.
In less than ten years, if wage growth continues as it has, the average earner in California will make $133,632 – a 55% growth.
By 2031, Tipalti projects seven states will see their average wage will top six figures. Washington’s will be the highest at $135,356.
This assumes that wages will grow the same way in the next 10 years that they grew in the previous 10 years.
Whether Californians will actually feel like they are earning more money in 2031 will all depend on what happens with inflation. Over the past two years, inflation has outpaced wage growth, effectively cutting the average person’s real income.
Nationally, the average cost of consumer goods went up 7.7% over the past 12 months, according to Bureau of Labor Statistics. That would mean the average worker needs a 7.7% raise just to keep up with the growing cost of living.
That doesn’t take into consideration California’s sky-high cost of housing. In some cities, like San Jose, Sacramento and Riverside, the cost of a home went up between 20% and 25% in 2022 alone.