Wage growth for U.S. workers has slowed overall, but job switchers recorded a 12.5% three-month moving-average increase in July, the highest in three years, according to the Bank of America Institute. The largest gains went mostly to lower-paid hourly workers, whose after-tax wages rose 4.7% year over year in August, compared with 3.5% for higher-income households. Economists said the trend points to narrowing pay differences and greater mobility among lower-income workers, though switching-job gains remain below pandemic levels. Lower-paid workers are concentrated in leisure and hospitality, transportation and warehousing, and parts of retail. The report comes as nearly 25% of U.S. workers are classified as functionally unemployed, while the federal minimum wage remains $7.25 an hour, unchanged since 2009. Researchers also pointed to worker selection, skills mismatches and demand from AI data-center construction as possible contributors to higher pay for some job changers. White-collar workers in finance, insurance, real estate, technology and consulting are switching jobs less often as weak hiring and AI automation encourage job-hugging (staying in existing roles because outside opportunities are limited).