U.S. Wealth Gap Narrows as Lower-Income After-Tax Wages Rise 5.2%
Updated
Updated · The Week · Aug 17
U.S. Wealth Gap Narrows as Lower-Income After-Tax Wages Rise 5.2%
3 articles · Updated · The Week · Aug 17
Summary
After-tax wages for lower-income U.S. workers rose 5.2% in July from a year earlier, adding to signs that the wealth gap may be narrowing.
A June report found the spending-growth gap between high- and low-wage earners was the narrowest in three years, with economists tying the shift to a stronger labor market and more lower-income households collecting paychecks.
That improvement could make consumer spending more resilient by reducing the economy’s reliance on wealthy households, which had left growth exposed to a stock-market-driven pullback in top-end spending.
Skeptics say the K-shaped economy still holds: households earning above $200,000 account for nearly 60% of personal outlays, while inflation-adjusted spending by the bottom 80% has stayed flat since the pandemic.
Analysts say the recent data may show only softer inequality rather than a full reversal, with more than one strong quarter needed to declare the K-shaped pattern over.