Wage Inequality Is Widening Again and New Data Suggests AI Is Playing a Role
New research from Revelio Labs shows that the U.S. labor market is once again splitting along income lines. High wage workers continue to see strong demand and rapid pay growth, while opportunities and wage gains for lower paid workers are falling behind. The result is a renewed K shaped economy, visible directly in job postings and salaries.
In a December 2, 2025 report, Lisa K. Simon and Beyza Arslan analyze wage and job posting data from Revelio Public Labor Statistics and find a sharp divergence that has emerged since early 2023. After a brief post pandemic period when lower wage workers saw faster pay growth, the pattern has reversed.
According to the data, salaries in the top quartile of the wage distribution have increased by more than 30 percent since January 2023. Over the same period, wages in the bottom quartile have risen by only about 10 percent. This widening gap mirrors changes in hiring demand. Job postings for roles paying over 100,000 dollars a year have grown by roughly 150 percent over the past two years, although growth flattened somewhat in 2025. In contrast, postings for jobs paying around 30,000 dollars or less have fallen by more than 50 percent since early 2023.
This divergence is reshaping the labor market even as headline economic indicators remain resilient. Consumer spending, equity markets, and investment activity continue to look strong, but much of that strength is concentrated among high income households and high wage industries. Affluent workers benefit from rising asset values and stable employment prospects, while lower income workers face slower wage growth, shrinking job opportunities, and persistent cost of living pressures.
The wage gap is also evident in newly posted salaries. Revelio Labs finds that inequality in starting pay has increased sharply since 2023. Top quartile salaries in new job postings are up more than 30 percent, while bottom quartile salaries have grown only modestly. This marks a clear break from the early post pandemic recovery, when employers raised wages aggressively in service and frontline roles to compete for scarce workers.
The occupations driving these trends offer additional clues. The strongest wage growth appears in jobs with low automation risk and high labor intensity, both at the top and bottom of the pay scale. High paying roles in arts, design, and entertainment have seen year over year salary growth of more than 50 percent. At the lower end, sales, legal support, and protective services show some of the fastest wage growth among low wage roles, but gains remain muted at around 9 percent.
Even within the same occupation, the divide is stark. Legal roles provide a clear example. Top quartile legal jobs saw salary growth of roughly 37 percent year over year, while bottom quartile legal roles grew by only 6 percent. The same field is rewarding high skill, high wage workers far more than those in lower paid positions.
A key factor behind this renewed divergence appears to be automation and AI adoption. The researchers find a strong negative relationship between average AI adoption rates and wage growth at the bottom of the wage distribution. In simple terms, the more an occupation is exposed to AI investment, the weaker wage growth tends to be for its lower paid workers. This relationship is much weaker for top quartile jobs, where wages continue to rise due to sustained demand for specialized skills.
This finding challenges the popular narrative that AI primarily threatens high earning white collar workers. Instead, the data suggests that early automation gains are disproportionately suppressing wage growth in lower paid roles, especially those involving predictable or repetitive tasks that machine learning systems can increasingly handle. Employers appear more willing to expand and reward high paid roles while holding back on hiring and pay increases in jobs that are easier to automate.
Taken together, the research points to a labor market that is pulling apart once again. Opportunity, wage growth, and economic security are increasingly concentrated at the top of the income distribution. As AI adoption accelerates across industries, Revelio Labs warns that these wage divides may widen further, reinforcing a K shaped economy where prosperity rises for some while stagnating or slipping for others.
