San Antonio’s job market is finally catching a break, but the money is not landing in everyone’s wallets the same way. Bank of America Institute’s latest employment snapshot finds top earners pulling away while middle- and lower-income households watch their paychecks inch up at a crawl.
In March, after-tax wages for higher-income households grew about 5.6% year over year. The middle tercile saw roughly 2% growth, and the lowest tercile only about 1%. Payrolls may be rebounding, but economists say the hiring uptick so far has not done much to close the underlying wage gap.
In a monthly note, Bank of America Institute economist David Tinsley describes the pattern as increasingly “K-shaped,” according to a report by the Bank of America Institute. The institute’s payroll estimate, built from customer deposit and payroll flows, shows year-over-year payroll growth reaccelerating in March even as the strongest after-tax wage gains cluster at the top. The authors say this is the widest gap they have recorded since launching the series in 2015.
According to the Bureau of Labor Statistics, nonfarm payroll employment rose by 178,000 in March after a steep February drop of about 133,000, while average hourly earnings increased only modestly. The BLS numbers line up directionally with Bank of America’s account-based payroll estimate but are flatter in size. Together, the two views suggest that headline hiring is coming back without a broad-based lift in wages for the lower two income terciles.
What's driving the split
“Just as there’s a ‘K’ shape in the wages, there’s a ‘K’ shape in spending,” Tinsley told News 4 San Antonio, pointing to a surge in bonuses and a bigger tax-season bump for higher-income households. Both the report and local coverage note that bonus growth has been positive for higher-income households while staying weak or even negative for middle- and lower-income groups, which only magnifies the headline wage gap.
University of Missouri economist Peter Mueser also told the outlet that automation and AI could hit demand for some lower- and middle-paid roles harder than for top earners. He added that it is too early to say the current pattern is permanent, but the concern is clearly on economists’ radar.
Local stakes for San Antonio
The institute says its analysis draws on activity from about 70 million customer accounts, giving it a near real-time look at paychecks and bonus flows, according to the Bank of America Institute. That kind of data matters for metros heavy on health care, government, and leisure-and-hospitality jobs, since those sectors employ many lower- and middle-paid workers who may not see the same wage bump that tech and finance workers do.
San Antonio’s own planning and economic studies list health care, tourism, and government among the region’s biggest employment anchors. That raises the risk that headline job gains could leave many local households treading water on pay. For more local context, the city’s economic overview is detailed in San Antonio city planning documents.
What to watch next
Economists will be watching to see whether the early-year bonus pop fades and whether wage growth for the middle and lower terciles starts to firm up in the months ahead. If the bonus effect turns out to be temporary and pay for the bottom 80% stays weak, consumer spending patterns, and the small businesses that depend on broad-based demand, could start to show real strain even while the overall job numbers still look healthy.
