US Workers See Wage Growth Slow With Lowest-Paid Hit Hardest

American workers are seeing widespread slowing in wages, though some are suffering more than others.

Wage growth for the lowest-paid quarter of workers — people who make roughly less than $806 each week — slowed to an annual rate of 3.7% in June, the Financial Times (FT) reported Sunday (Aug. 3), citing data from the Federal Reserve Bank of Atlanta .

That’s down from a peak of 7.5% in late 2022, a time of steep heavy post-pandemic labor shortages in sectors like hospitality.

Higher-income workers have also seen their wage growth slow, though not as much, the report added. Pay for the top quarter of American workers — people making $1,887 a week — was up by 4.7% in the year to June, and for the overall workforce by 4.3 %.

The FT notes that economists say wages are often more volatile for the lowest-paid employees, as they typically have less bargaining power in a weak jobs market.

“It takes a tighter labor market for them to have any leverage,” said Elise Gould , a labor market expert at the Economic Policy Institute .

The findings come as financial fragility continues to be a pervasive issue across the U.S. consumer base, according to recent PYMNTS Intelligence research.

The Paycheck-to-Paycheck Index reached a new high of 68.4% in May, indicating that 684 out of every 1,000 Americans are spending their monthly income on essential payments, with 24.2% saying they struggled to stay on top of their bills — a figure that has ticked up for the third month in a row.

“This environment fosters discomfort, as 6 in 10 consumers feel uneasy when contemplating their finances, and 24% admit to high anxiety, alongside 36% expressing some level of concern,” PYMNTS wrote last month.

“While lower-income individuals predictably bear the brunt of this stress at 71%, even a portion of middle and high earners report worry, demonstrating a broad-based financial apprehension that transcends income brackets and generally impacts all age groups, with baby boomers being a slight exception.”

Meanwhile, the American labor market kept its stability in June, although signals of cooling are emerging, per the latest Jobs Openings and Labor Turnover Survey (JOLTS) released last week. That report showed job openings at 7.4 million for June, a decrease of about 275,000 from May and steady year over year. The job openings rate fell to 4.4%, down from 4.6% the prior month.