Everybody in Washington wants credit for your raise. Far fewer people want to talk about what that raise actually buys.
You answer that second question yourself every week, at the register, at the pump and on the rent check. No speech changes the total on your receipt.
For most of 2025, the answer was good news. Paychecks grew faster than prices, and the gap finally started to feel like progress instead of catch-up.
Then the Iran conflict sent energy prices surging this spring, and the math got shaky again. By late summer, plenty of households were quietly wondering whether their raise still counted as one.
Economists call the fear underneath that question a K-shaped economy. People who own stocks and homes keep climbing, while paycheck-only households tread water. It’s the shape behind plenty of kitchen-table anger, and every administration in memory has wanted to redraw it.
On Tuesday, Sept. 15, Treasury Secretary Scott Bessent told House lawmakers that shape is gone. The lowest-paid quarter of workers is getting bigger raises than the top, he said, and real wages are beating inflation.
I have tracked Bessent’s wage pitch since June, and the claim isn’t new. What caught my attention this week is how his supporting numbers keep shifting, and what federal wage data released four days earlier says about your paycheck.
Why Bessent keeps returning to low-wage worker raises
Bessent has sold this economy as Main Street’s turn since at least June, when he pitched rising real wages as the payoff for working families. The pitch is aimed at people who own little stock.
In August, he got specific. Pay for the bottom 25% of workers rose 5.5% over the past year, he said in a post on X, while core inflation sat at 2.5%.
By early September, the figure had changed. Bottom-quartile wages rose “almost 3.5, or three times more than the top 25 percent,” Bessent said in a Sept. 8 interview, reported Breitbart.
What struck me in his Sept. 15 prepared testimony is that the numbers vanished entirely. Only the claim survived.
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“Real wages are outpacing inflation. The bottom 25 percent of wage earners are seeing larger wage increases than those at the top,” Bessent said in his prepared statement, according to the Treasury Department.
Wage figures by pay level usually come from the Federal Reserve Bank of Atlanta, which averages its quartile data over 12 months because monthly samples are small, according to the Atlanta Fed. On that basis, the bottom quartile posted 3.6% growth in June against 3.9% for the top, TheStreet reported last month.
What the latest wage data shows about your hourly pay
The August real earnings report landed on Friday, Sept. 11. Adjusted for inflation, average hourly earnings for private-sector workers fell 0.3% from a year earlier, reported the Bureau of Labor Statistics (BLS).
Weekly paychecks look a little better. Real average weekly earnings rose 0.3% over the same stretch, but only because the average workweek grew 0.6%, according to the BLS.
I ran the numbers from the agency’s earnings table. The average private workweek went from 34.2 hours in August 2025 to 34.4 hours this August, which works out to about 12 extra minutes a week, or roughly ten hours a year.
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The hourly gap is small but real. Average pay reached $37.75 an hour in August, about a dime short of what it needed to keep pace with prices since last August’s $36.62. At 34.4 hours a week, my math puts that shortfall near $175 a year.
“A substantial number of Americans are worse off,” Navy Federal Credit Union chief economist Heather Long told CNBC.
The Census Bureau handed Bessent a genuine win on Sept. 15. Real median household income hit $87,460 in 2025, the highest since tracking began in 1967, according to the Census Bureau.
The same report cuts against his bottom-versus-top framing, though. Income at the 10th percentile didn’t change significantly in 2025, while the 90th percentile rose for a third straight year, the agency found.
Bessent’s argument does have support in specific sectors. Pay grew fastest in August in immigrant-heavy fields such as leisure and hospitality, construction and transportation, where employers are replacing workers, KPMG chief economist Diane Swonk told the Washington Post. Inflation still erased those gains, she added.
Bessent’s Sept. 15 wage and tax claims against the data
- Real wages: Inflation-adjusted hourly pay fell 0.3% in the year through August, per the BLS.
- Bottom versus top: Household income at the 10th percentile was flat in 2025, per the Census Bureau.
- Broad pay growth: Median individual wage growth hit 4.1% in August, above 3.4% inflation, per the Atlanta Fed.
- Tax relief: The lowest-income tenth of households loses about $1,200 a year under the 2025 law, per the Congressional Budget Office (CBO).
How the Working Families Tax Cuts relief actually splits
Bessent’s tax claim rests on how many people used the new breaks. More than 64 million returns claimed at least one, including no tax on tips or overtime, and families received over $325 billion in refunds through Tax Day, according to his testimony.
If you got one of the bigger refunds Bessent promised last winter, that relief was real. The CBO’s scoring of the full 2025 law, which the administration calls the Working Families Tax Cuts, shows who else gained.
Households in the fifth and sixth income deciles gain about $800 and $1,200 a year, while the top tenth gains about $13,600, mostly from lower taxes, the CBO estimated.
The bottom tenth comes out behind mainly because of cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP), the agency found. Whether the law favors low earners depends on whether you read the whole bill or just the tax pages.
What the Fed’s first rate hike since 2023 means for workers
The Federal Reserve raised its benchmark rate by a quarter point on Wednesday, Sept. 16, to a range of 3.75% to 4%, its first increase since July 2023, reported CNBC.
Rate hikes are the Fed’s tool for cooling inflation, which is what would let hourly pay pull ahead again. They also push up what you pay on variable-rate debt such as credit cards, and that cost lands hardest on households carrying balances.
For your own budget, measure your raise against 3.4% inflation, not against anyone’s quartile chart. Atlanta Fed data show job switchers earned 5.0% raises in August versus 3.6% for workers who stayed put, so a loyal employee is ahead by a hair at best.
The next check arrives Oct. 14, when the BLS publishes September real earnings. If the workweek keeps stretching while hourly pay stays underwater, the recovery Bessent describes is one you are buying with your own time.
Related: Scott Bessent gives candid assessment of U.S. economy
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