Young low-wage, middle-wage workers see pay increase

At the beginning of the economic recovery, older, high-paid Americans seemed to be prevailing. Now, the trend seems to be reversed, as younger low-wage and middle-wage Americans are earning more.

Low earners first noticed bigger pay increases a year ago, USA Today reports.

Workers earning less than $20,000 a year saw their average hourly pay increase by 5.4 percent in the third quarter, according to ADP. Those earning $20,000 to $50,000 saw a hike in wages of 4.9 percent, USA Today said.

ADP also found that employees ages 16 to 34 saw their paychecks grow about 6 percent in the past year, vs. 3.5 percent to 4.5 percent for older workers.

The shift could boost economic growth since lower-paid workers tend to spend most of their paychecks, spreading the benefits throughout the economy. It’s also lifting the fortunes of restaurant and retail employees whose stagnant wages have sparked protests across the USA.

Economists are not exactly sure what is behind this pay increase. One reason is higher minimum wages in some states, but another factor might be employers making up for giving some employees stingy salaries at the start of the recession.