Low income worker pay rose in second quarter, Labor Department data show

Low income worker pay increased in the second quarter, with Labor Department data showing weekly earnings for lower- and middle-income full-time workers rising faster than inflation from a year earlier, The Wall Street Journal reported Thursday. Weekly pay for workers at the 25th percentile of earnings rose 5.5%, while median workers saw a 4.6% increase, according to the report.

The gains offer a partial explanation for why working-class consumers have continued to spend on both necessities and some discretionary purchases, economists told the Journal. Higher weekly income can support household cash flow, particularly for consumers with limited savings and tighter monthly budgets.

The figures do not show uniform improvement across all measures of worker finances. The Journal reported that any relief could prove short-lived if fuel costs rise, new tariffs increase consumer prices, or artificial intelligence-related pressures affect employment and wages. Lower-income households tend to benefit most from additional pay, but they are also more exposed when everyday prices rise.

Why did low income worker pay rise?

The Labor Department figures measure weekly earnings, which can increase because hourly wages are higher, because workers are taking on more hours, or because of some combination of the two. Atsi Sheth, an economist and chief credit officer at Moody’s Ratings, told the Journal the numbers represented a “nice bump” for lower-income workers, while cautioning that the increase may reflect longer workweeks rather than higher wage rates.

Guy Berger, an economist at the Burning Glass Institute, told the Journal that the ability to work more hours can itself point to labor-market strength. When employers offer additional shifts or longer schedules, workers may be able to lift paychecks even if wage rates are not rising as quickly.

The distinction matters for household resilience. A pay increase driven by more hours can help cover near-term expenses, but it may be less durable than a sustained rise in hourly compensation. It can also depend on whether employers continue to need the same amount of labor.

What it means for consumer spending

The data come as analysts track whether wage growth can keep supporting consumption after a period of elevated prices. Economists cited by the Journal said stronger finances among lower-tier workers could be connected to their continued spending on essentials and nonessential items.

PYMNTS Intelligence, in a separate report titled “Why Job Security No Longer Shields Paycheck-to-Paycheck Consumers,” found that steady employment remains a source of confidence for consumers but does not by itself ensure financial resilience. PYMNTS reported on July 2 that the most strained households showed weaker emergency readiness and less capacity to absorb a financial shock, even when they felt positive about their job prospects.

For investors and policymakers, the Labor Department data present a mixed picture. Wage and weekly earnings gains can help sustain demand, but household purchasing power remains vulnerable if price pressures reaccelerate or if labor-market conditions soften. The Journal reported that workers most helped by bigger paychecks are also among those most sensitive to higher costs.

This story draws on original reporting from PYMNTS.