The pay gap between low-wage and high-wage workers is “wider than ever,” with workers at the top making about five times the annual pay of their lower-income counterparts, ADP’s chief economist said in an analysis this week.

Despite strong pay increases earlier in the pandemic, the pace of income growth for low-wage workers has slowed amid a stagnant labor market, while pay gains for top earners have remained relatively steady, contributing to a bigger difference between the two groups, according to ADP chief economist Nela Richardson.

“In August 2023, the highest-income earners made 4.9 times as much as the lowest-income earners,” Richardson said. “A year later, in August 2024, the gap had grown to five times what low-wage workers made.”

This August, the gap grew to nearly 5.3 times as much, meaning the highest earners make almost 530% more income than the lowest.

Add that to the ocean between the experiences of high-income and low-income households in this K-shaped economy, which continues to grow thanks to strong spending driven by the well-to-do. Lower-income households — squeezed by rising prices and a sluggish labor market, and largely lacking adequate savings — are on the opposite end. Their credit and debit card spending grew just 0.3% in August from a year earlier, as their pay increased by the smallest amount in data going back to 2016, according to the Bank of America Institute.

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“The growth in income inequality has created a structure in which the privileged few can power the entire GDP while the majority experience a very different economic universe,” said Aaron Klein, a senior fellow in economic studies at the Brookings Institution.

Exacerbating the difference even further is the AI-fueled stock market rally. The richest 1% of households hold about 40% of equities, while nearly 50% is “held by the next 19% of earners,” Oxford Economics said in an analysis this week. That makes the overall economy more sensitive to the ways in which the market influences the spending and confidence of high-income Americans.

“We’re optimistic about the US consumer outlook for next year, but prospects by age and income differ,” the analysis said. “Younger, less affluent households face ongoing challenges, while older, wealthier consumers will drive overall spending growth, making it more vulnerable to equity and house price shocks.”

Even as consumer sentiment continued to slip across income groups this month, for example, it remained steady for Americans with larger stock holdings, according to the University of Michigan’s closely watched survey of consumers.