As daily living becomes more expensive, it becomes more difficult for workers to make ends meet.
While wage growth is high by historical standardsit cannot keep up with the increasing cost of living, which is increasing in fastest annual rate for about four decades.
“Wages have grown 5.1 per cent over the past year, which is dragging on inflationary pace,” said Bankrate.com senior economic analyst Mark Hamrick. “Indeed, rising prices are stealing the show from consumers’ minds.”
As wages grow at a slower rate than inflation, those wages won’t go far at the grocery store and in gas pump – two budget areas are particularly tight.
At the beginning of 2022, 64% of the U.S. population was living on wages, up from 61% in December and just away from a high of 65% in 2020, according to a survey. LendingClub Report.
“We are all seeing the cost of things go up,” said Anuj Nayar, financial health officer at LendingClub. Still, paying more for gas and groceries is hurting households, he said.
“You have to eat, you have to go to work; this is not a discretionary expense.”
Even among those earning six figures, 48 percent said they now live on paychecks, up from 42 percent in December, the survey of more than 2,600 adults found.
“Depending on where you live, $100,000 might not get you that far,” says Nayar.
For example, in San Francisco, a family of four with a household under $120,000 is considered low income. (This is a breakdown of how much do you need to earn afford to live in the country’s most popular cities.)
Americans now say they need to $122,000 a year, more than double the current national average salary, to feel financially secure, according to a separate report from the financial services website Personal Capital.
