December Labor Economy Wage Gains Could Add $32 Billion to GDP, Even as Worker Confidence Lags

• Labor Economy workers represent 36.5% of U.S. employees and drive $1.7 trillion annually (15.1% of total U.S. spending), making their financial stability critical to overall economic health
• Roughly half of Labor Economy workers expect income to remain flat while nearly half anticipate monthly expenses to rise, forcing difficult spending tradeoffs in 2026
• Two-thirds of workers express concern about automation and job cuts, with many doubting their skills will remain valuable as technology reshapes work, creating an 'automation overhang' that compounds financial anxiety

Summary

Key Findings

The December 2025 labor market shows wage gains among "Labor Economy" workers—approximately 60 million U.S. employees earning $25/hour or less—could contribute $32 billion to GDP. However, worker confidence remains significantly depressed despite improving economic headlines.

Critical Data Points

• Labor Economy workforce: 60 million workers (36.5% of U.S. employees)
• Annual spending power: $1.7 trillion (15.1% of total U.S. spending)
• Confidence gap: Labor Economy workers score 50 versus 57 for non-Labor Economy workers on the Wage to Wallet Index
• Typical wage: $25/hour or less (generally under $50,000 annually)
• Skills confidence: Two-thirds express concern about skills remaining valuable amid technological evolution

Market Implications

The report reveals a "divided recovery" where macroeconomic improvements aren't translating to worker sentiment. Approximately half of Labor Economy workers expect flat income in 2026, while nearly half anticipate rising monthly expenses, forcing consumption tradeoffs that could impact retail demand and payment patterns.

Technology anxiety is emerging as a financial stability risk, with workers worried about automation, layoffs, and employer viability affecting their job security and mobility.

Sector Impact

The findings have significant implications for:

• Financial services: Need for faster wage access and automated savings tools
• Employers: Pressure to connect financial stability with skill-building programs
• Consumer demand: Potential shifts in spending behavior among a segment controlling $1.7 trillion in annual consumption

The persistent confidence gap despite wage gains suggests underlying economic fragility in this essential workforce segment that powers production, distribution, and service delivery across the U.S. economy.