Higher-earning white-collar workers have been the focus of much news coverage recently, as the specter of artificial intelligence taking their jobs has begun to become a reality.
Just last week, two major tech companies added to the layoff trend that has seen tens of thousands of tech workers dismissed in recent months.
U.S. layoff stats 2025:
- 1.6 million workers laid off each month
- On pace for 19.2 million annually
- 206,101 employees laid off from 221 tech companies
- Job cuts up 5.9% year over year
- 21% of companies expected to lay off employees Source: Bureau of Labor Statistics
Amazon cut 14,000 white-collar jobs in October, eliminating approximately 10% of its corporate workforce in the process.
Mike Hoffman, CEO of growth advisory consulting firm SBI, also recently boasted that he has been able to reduce his software development team by 80% in recent months, despite an increase in productivity.
While the situation seems dire for those at the top of the economic food chain, blue-collar workers face an even more daunting future, according to new research from Bank of America.
Nearly one-quarter of all households live paycheck to paycheck.
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Blue-collar workers see slowest wage growth
While white-collar workers face layoffs, wage growth among that cohort has been consistently growing for nearly three years.
In January 2023, white-collar wages were growing at less than 2%; today, they are at about 3.7%. Meanwhile, lower-income wage growth started at above 6% in January 2023, but today stands at about 1%, according to BofA data.
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Stagnating wage growth exacerbates the difficulties faced by low-income workers.
According to BofA internal consumer deposit and spending data, nearly 25% of all households are estimated to live paycheck to paycheck.
And while there has been a slowdown in the growth rate of this statistic, there’s a reason: “The number of lower-income households (especially millennials and Gen X) living paycheck to paycheck continues to rise, while there is almost no increase in the number of higher- and middle-income households.”
In other words, the poor are getting poorer, while the rich seem to be maintaining their wealth.
According to BofA, more than 25% of households spend more than 90% of their income on necessities, such as food, shelter, and energy, leaving them with less than 10% of their income for discretionary spending or savings.
And the problem could worsen as lower- and middle-income households are hit by inflation.
Blue-collar workers are bearing the brunt of inflation
Lower-income households are driving the rise in households living paycheck to paycheck, as 29% of these households are living paycheck to paycheck in 2025, up from 28.6% in 2024 and 27.1% in 2023.
Meanwhile, there has been basically no movement in the same category for middle- and high-income earners.
Analyzing internal deposit data, Bank of America explains why.
“Higher-income Millennial households have seen their average wages grow five percentage points faster than the rate of lower-income households in the same generation. Meanwhile, higher-income Gen X have outpaced their lower-income counterparts by four percentage points. And higher-income Baby Boomers have seen wage gains, while their lower-income peers are seeing declines.”
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White-collar Millennial households have seen their wages grow 5% faster than those of lower-income households in the same generation.
Higher-income workers are better able to absorb the recent acceleration in inflation than lower-income workers because their pay is doing a better job of keeping up with the times.
Workers in some key regions are seeing relief
The issues of inflation and wage stagnation haven’t been spread evenly across the country. Some regions are experiencing lower inflation, while others are witnessing higher wage growth.
“Looking across the U.S., we can see that the Southern census divisions (notably Delaware, D.C., Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and West Virginia), and Western divisions (especially Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming) have the highest share of households living paycheck to paycheck,” BofA says.
The regions with the lowest share are in the Northeast (particularly New Jersey, New York, and Pennsylvania) and the Midwest (Indiana, Illinois, Michigan, and Wisconsin).
BofA says the reason for the regional discrepancy is that the South and West had some of the lowest inflation rates in the country last year, so rising costs (especially in the West), “may renew or expand financial pressure on consumers in these areas after only a brief respite.”