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Employer costs for employee compensation jumped 4.9% from a year earlier in March, the Labor Department said Wednesday, the second consecutive increase at that relatively robust level.

Some local ordinances in particular include an exemption for employers that enter into a collective bargaining agreement with a union. This “escape clause” is often designed to encourage unionization by making a labor union the potential “low-cost” alternative to new wage mandates, and it raises serious questions about whom these minimum wage laws are actually intended to benefit.

As early as this week, the Labor Department could propose a rule that would raise the current overtime threshold — $23,660 – to as much as $52,000, extending time and a half overtime pay to millions of American workers. The rule has already come under fire from business and Republican opponents who say it will kill jobs and force employers to cut hours for salaried employees.

The average annual pay for tech workers in Silicon Valley, including Santa Clara and San Mateo counties, is 66 percent higher than the next-closest region in the U.S. — Seattle — according to the UCLA Anderson Forecast report released Wednesday. The hiring boom has helped California reach 2.5 percent job growth.

Despite the bad news, consumer spending and home building are rising. Real disposable personal income is roaring ahead at growth rates of 6.2 percent in the first quarter of 2015 and 3.6 percent at the end of 2014. Even the personal savings rate is up (5.5 percent so far this year and 6.2 percent at the end of 2014). These consumer factors are attributed to an increase in government social benefits, though, and not to jobs and economic prosperity. Social Security makes payments to more than 64 million Americans and nearly 3 million more receive federal government retirement checks. More than 20 percent of the US population is basically living on fixed-incomes.

But a Wall Street Journal analysis of Labor Department data points to persistent constraints on worker pay, even as the economy approaches full employment. The Journal found 33 U.S. metropolitan areas—from the small to the sizable—where unemployment rates and nonfarm payrolls last year returned to prerecession levels. In two-thirds of those cities—including Columbus; Houston; Oklahoma City; Minneapolis-St. Paul, Minn.; and Topeka, Kan.—wage growth trailed the prerecession pace.

Allowing child care workers to unionize could be the largest expansion of collective bargaining within a state-funded service since 1999, but Wednesday’s floor discussions largely ignored the intent of the bill, focusing instead on the proposed expansion of child care slots. Sen. Janet Nguyen, R-Garden Grove, only briefly hinted at Republican criticisms that union representation would drive up the cost of child care, already unaffordable for many, even higher.

But last week, after the City Council gave tentative approval to a more far-reaching proposal that would gradually raise minimum hourly pay to $15 by 2020, the business group’s president conveyed dissatisfaction with the council plan to the mayor’s office.

A 2014 Workforce Freedom Initiative report documents that unions up and down the West Coast as well as in Chicago and Milwaukee have gotten minimum wage “escape clauses.”

As labor unions lead a nationwide push for a higher minimum wage, the California Senate on Monday approved raising the state’s required hourly rate to $11 in 2016 and $13 in 2017.

Labor leaders, who were among the strongest supporters of the citywide minimum wage increase approved last week by the Los Angeles City Council, are advocating last-minute changes to the law that could create an exemption for companies with unionized workforces..

A week after Los Angeles became the largest city in the nation to adopt a major minimum-wage increase, suburban Irvine in neighboring Orange County is considering going in the opposite direction.

But even proponents such as Jacobs acknowledge that cities are raising the minimum wage to levels that have not yet been fully vetted. “There is no simple existing economic model consistent with the empirical minimum wage research literature that can be used to estimate the impact of a minimum wage law, taking into account all the direct and indirect effects as they course through a regional economy,” wrote Jacobs and several colleagues advising Los Angeles council members.

The requirement aims to ensure that wages keep pace with cost-of-living increases, but business advocates say it could cripple entrepreneurs’ ability to adjust wages to unpredictable economic conditions — effectively enshrining automatic annual layoffs when times get tough.

““We’re on the cusp of evolutionary change related to pensions. What we’re seeing is a clear indicator that courts are willing to treat pension beneficiaries as ahead of creditors,” says Thomas McLoughlin, head of municipal fixed income at UBS Wealth Management Americas. High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/9f5e7590-fec6-11e4-94c8-00144feabdc0.html#ixzz3b5ipxnKs ”That will transform the risk parameters for municipal finance. For years muni analysts looked at idiosyncratic credit risk, but now we are looking at a systemic risk related to pensions. It’s a really important trend we have to incorporate into our analysis. We have to focus far more on this in the future.””