Lower-Income Wage Growth Reaches 4.1% in June as Job Switching Narrows Pay Gap
Updated
Updated · IndexBox, Inc. · Jul 9
Lower-Income Wage Growth Reaches 4.1% in June as Job Switching Narrows Pay Gap
3 articles · Updated · IndexBox, Inc. · Jul 9
Summary
Bank of America data showed lower-income households' after-tax wage growth hit 4.1% in June from a year earlier, the fastest since July 2023 and above middle-income households' 3.4%.
Job switching helped drive the gain: lower-income workers changing employers saw roughly 12% pay bumps, versus 9% for higher-income workers, and switching picked up in the three months through June.
The report also said some lower- and middle-income households cut tax withholdings to reflect changes from Trump's One Big Beautiful Bill Act, lifting take-home pay growth.
Higher-income wage growth cooled to 4.2%, leaving their earlier lead over lower-income households largely erased and spreading consumer spending power more broadly.
Bank of America said the improvement could last about a year if labor demand stays firm and lower withholding continues, but low-income gains would be vulnerable if hiring weakens.