Wage Gap Widens, Threatening U.S. Economy

0:00It's April 29, I'm Cory with the story, and this is Durham News today, local news powered by AI. Bank of America data reveals a split in the U.S. economy, even as consumers spending hold strong. Households kept buying big and march across major categories, but wages tell a different tail. High income folks saw after tax pay jump 5.6% year over year, the biggest gain since August 2021. More income households scraped by with just 1% growth, middle earners at 2%. That's the widest wage gap since the banks started tracking in 2015. Meanwhile, skyrocketing gas prices are squeezing budgets hardest for those at the bottom. Prices shot from about $3 a gallon to $4 by late March, hiking spending 16.5% month over month. For lower income families, gas eats up 8% of their card spending, double the share for high earners. Lower earners are pulling back on fun stuff like dining out, while top groups keep spending freely.

1:01Pandemic wage boost that helped close the gap are now fading fast, with bonuses flowing mostly to the wealthy. Tax refunds offer some relief this season, but they're bigger and more helpful for higher income households. Experts warned this divide powers the economy on the backs of the top 20% who outpace inflation. Consumer spending drives 70% of GDP, so of middle and lower groups keep tightening belts, trouble brews ahead. The big picture stays positive with solid overall demand and refund cushions, but rising costs like gas and groceries could widen cracks if wage. Trends don't shift soon.