The lowest quartile of wage distribution in the US experienced a 3.5% wage growth year-over-year through December 2025 compared to about a 4.3% rate in December 2025. Importantly, high-income workers saw their wages rise by roughly 4.1% year-over-year in December 2025, with consistent outperformance in growth dynamics over all workers in other wage groups since September 2024. Figure 2 demonstrates that the opposite trend prevailed before September 2024, where the highest wage earners trailed the rest.
The recent employment report data from Bank of America Institute supports these dynamics: after-tax wage growth for high-income households was around 2% greater than that of lower-income households. BofA warned that the more crucial finding lies in the middle-income group. The bank’s research institute found that middle-income households’ after-tax wage growth was 0.4 pp below its second-half 2025 average, implying that any sustained and structural decline in middle-income wage growth might provide headwinds for consumer spending.
Although a decline in wage growth is evident among all quartiles, the pattern has been sustained – with the highest quartile exhibiting stronger wage growth, indicating a rather K-shaped economy.
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New World Invesment Research 
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