Workers Say Paychecks Can’t Keep Up as Living Costs Keep Rising

Across the country, workers describe a gap between what lands in their bank accounts and what it takes to get through the month. A new Cost-of-Living Report from job site Monster found that 95% of more than 1,200 U.S. workers say their wages have not kept up with inflation, a near-unanimous verdict on paycheck pressure. Career expert Vicki Salemi told Monster that many people are dipping into savings, taking on debt, or delaying major life goals just to manage everyday expenses.

When Raises Don’t Feel Like Progress

Even workers who do receive raises often say the extra money disappears as soon as it arrives. In a USA TODAY/SurveyMonkey Workforce Survey, only one in five workers said their pay increased more than inflation over the past year, while four in ten said their income failed to keep pace with higher living costs. Resume Genius career expert Eva Chan summed up the mood in that report, saying “the American paycheck isn’t keeping up with American life.”

Groceries, Rent, and Bills Eat the Budget

The Federal Reserve’s 2024 Survey of Household Economics found that inflation and prices are now the most common financial worry, mentioned by 37% of adults who described their main money challenge. Basic living expenses such as groceries and utilities came next at 22%, followed by housing at 13%. One respondent told Fed researchers that the “cost of basic goods especially groceries is way too high,” a complaint that mirrors Monster’s finding that 94% of workers see food as their fastest rising expense.

Living Paycheck to Paycheck

For many households, almost every dollar is spoken for before payday arrives. An analysis by the Bank of America Institute cited by CNN Business estimated that 24% of U.S. households now spend more than 95% of their income on necessities such as housing, fuel, groceries, child care, and utilities, leaving little for savings or emergencies. One 34-year-old construction worker identified only as Austin told CNN, “To be 34 and living paycheck to paycheck with no savings, things are pretty crappy right now.”

Savings Thinned to the Breaking Point

As prices climb, many workers report draining the modest cushions they once had. Monster’s survey found that three-quarters of respondents have tapped their savings to cover essentials, with nearly a third using a significant portion, and 42% have taken on new credit card or loan debt. USA TODAY’s polling shows more than half of workers now have less than three months of living expenses saved in case of a layoff, and nearly a third could only last one month.

Official Data Shows Strain Beneath the Surface

Near the end of 2024, the Federal Reserve found that 73% of adults described themselves as “doing okay” financially or “living comfortably,” a share similar to the previous year but still lower than the peak in 2021. At the same time, 29% of adults said they were worse off financially than a year earlier, a level well above pre-pandemic readings. The Fed report noted that perceptions of the national economy remain much less favorable than in 2019, even as headline inflation cools.

Younger and Lower-Income Workers Feel It Most

The Fed’s survey highlights deep divides in who feels secure. Among adults aged 18 to 29, only 66% said they were doing okay or living comfortably, compared with 84% of those over 60. CNN’s review of Bank of America data shows after-tax wages for lower-income households rising about 1% year over year, well below the 3% inflation rate, while high-income wages rose around 4%. Economist Joe Wadford of the Bank of America Institute told CNN that higher- and lower-income households are “living in two different worlds.”

Emotional and Health Costs at Work

Financial pressure is also showing up on the job. Monster’s report found that 40% of workers link burnout directly to financial stress, and half worry about job security as employers cut costs. USA TODAY noted that social media feeds now include frequent posts from workers who say they work full-time and still struggle to cover rent, utilities, and food, a sign that stress is becoming part of daily life rather than an occasional crisis.

What Workers Want From Employers

When asked how employers could help, respondents in the USA TODAY survey ranked fully employer-paid health insurance premiums as their top desired benefit, ahead of perks such as unlimited time off or free meals. Monster’s analysis suggests companies also need to revisit base compensation and cost-of-living adjustments, since only 9% of workers in its sample reported a raise that clearly offset higher living costs. Financial wellness programs and clearer paths to higher-paying roles appear increasingly important as household budgets tighten.

A Slow Grind With Big Consequences

Economists worry that years of paychecks trailing prices will reshape both careers and the broader economy. CNN Business quoted EY-Parthenon chief economist Gregory Daco describing a “deepening affordability crisis” after five years of price hikes that outpaced income gains, warning that cautious spending by strained households could weaken a consumer-driven economy. For many workers, the data translates into something simple: each month feels harder than the last, and the paycheck that once felt like progress now feels more like a race they cannot win.