Why Americans Are Falling Behind, Even With Two Jobs

Today, 51% of U.S. households do not earn enough to cover their basic expenses. A study released overnight by the University of Wisconsin Population Health Institute shows the wage many people earn does not nearly cover the amount needed for basic necessities. In at least 25 of the 100 largest U.S. cities, an annual salary of $100,000 no longer covers the basic expenses of a family of three. It used to be that a six-figure salary was like the gold standard, but nowadays that may not be enough to make ends meet in certain parts of the country, especially like New York or San Francisco, where it costs so much more just to cover your daily expenses. In many families, child care represents a substantial portion of housing expenses, putting strong pressure on the household budget. In 2023, 67% of parents reported spending at least 20% of their annual income on child care, while 89% said they spent 10% or more of their household income on child care. 63% of workers say they wouldn't be able to cover a $500 emergency expense. Most people don't have $1,000 in the bank. Most people cannot handle a tire blowout or they're going to put it on credit. Additionally, 60% of Americans believe that a family of four needs significantly high income just to cover basic expenses and stay afloat. The New Gallup poll found Americans think the average family of four needs a minimum income of $85,000 a year, which is up almost 50% from 10 years ago. Taken together, these data reveal a single reality. Work no longer guarantees stability, and a single income barely suffices to sustain middle-class life. So why one income no longer pays for the American dream? For much of the 20th century, especially between 1940 and 1970, many U.S. families were able to live on a single middle-class income. It was common for a full-time worker to cover housing, education, health care, and retirement savings. In fact, during that period, more than 60% of households relied on a single economic provider. However, that reality has changed drastically in recent decades. Today, the median household income is around $80,000 per year, but in most cases, this amount comes from two people working, not just one. At the same time, the cost of housing, health care, and education has grown much faster than wages, reducing workers' purchasing power. This shift reflects multiple transformations in the economy, work, cost of living, and household structure. Currently, most households depend on two or more incomes, making it increasingly difficult to sustain a family on a single salary. Research from the Institute for Family Studies found that actually only about 4 in 10 married couples with families with young children are getting by on one income. Since the late 20th century, the U.S. labor market has moved away from the stable employment that characterized the postwar period. Between 1980 and 2023, the proportion of workers covered by a union fell from approximately 20% to less than 11%, reducing collective bargaining power and access to benefits. At the same time, nearly one in three private sector workers has no access to an employer-sponsored retirement plan, compared with majority coverage in previous decades. In 2024, more than 26 million Americans worked as independent contractors, temporary employees, or in contingent arrangements, many without health insurance, paid vacation, or unemployment protection. This structural shift has transformed long-term employment into a more fragile relationship, where even full-time work no longer guarantees economic stability. The skyrocketing cost of living has left millions of people working at full-time jobs or a number of part-time jobs still unable to afford a place to live. While wages grew slowly, key costs to sustain a household increased at a much faster rate. Since 2000, the average cost of family health insurance in the U.S. has increased by more than 300%, far outpacing the growth of median household income. During the same period, the real price of housing rose nearly 120%, driven by a structural shortage estimated at more than 5 million housing units. Tuition at four-year public universities grew more than 175% since the 1980s, even after adjusting for inflation. These increases in essential goods have reduced household margins, making a single income insufficient even for high-earning households. College financial expert I spoke with says a challenge families could be facing due to high inflation is having less money to support their students. Families may have tried to do their best to budget six months to a year ago, but now because Child care has become one of the most difficult expenses for U.S. families to absorb. In more than 30 states, the average annual cost of child care for a single child exceeds $10,000, a figure comparable to the annual payment of modest mortgage. For families with two young children, child care can represent up to 35% of total household income, even when both parents work full-time. In 2023, nearly 4 out of 10 parents reported reducing work hours or declining job opportunities due to the high cost of child care. This unavoidable expense to participate in the labor market reinforces the need for a second income just to maintain basic household functioning. Research from the Bank of America Institute shows child care costs rising 1.5 times faster than inflation. And since federal relief for child care during COVID-19 ended in October 2023, families are scrambling to find quality, low-cost care. The rising cost of living has reduced the financial margin of many households. Even with stable employment, income often only covers immediate needs. This pressure is reflected in daily routines. In many cases, money does not last until the end of the month. More than 60% of adults in the United States live paycheck to paycheck at least part of the year. For many households, it is no longer a regular practice, but an exception. Only 44% of families report having enough savings to cover three months of basic expenses. The lack of savings makes unforeseen expenses critical. Even minor costs can disrupt the entire budget. In this fragility, credit shifts from a backup to a daily necessity. For example, in 2024, credit card debt surpassed an alarming figure, reaching a historic high. So according to the New York Federal Reserve, Americans are pulling out their plastic more often. Credit card debt hitting a record $1.16 trillion this past quarter. And this rise in credit card debt, as you can see, is happening at a much faster pace than any other time in the past two decades. The rise of dual-income households is not only due to economic necessity, but also a profound transformation in labor roles. In 1960, fewer than 35% of married women participated in the labor force, whereas by 2024, this figure had increased considerably. Among households in the top-income quintile, more than 65% have two working adults, indicating that dual incomes have become the norm even among wealthier sectors. Additionally, women today represent nearly half of the total labor force, compared with less than 38% in previous decades. This change expanded opportunities and autonomy. But it coincided with an economy where individual wages are no longer sufficient to sustain the middle-class standard of living. According to new data from the Labor Department, women are overtaking men on American payrolls. Last month, women held just over 50% of jobs, surpassing men by 109,000. Experts say the development likely reflects the future of the American workplace. The last time there were more women than men on U.S. payrolls was in the mid-2010s. For decades, wages grew alongside productivity, but this relationship has steadily weakened. Since 1979, labor productivity has increased more than 60%, while the real hourly wage of the average worker has grown less than 20%. Inflation-adjusted median household income has barely doubled over 50 years, while essential costs have risen several times more. In 2024, more than 45% of workers reported that their wages do not keep up with the cost of living, even after nominal increases. This disconnect explains why working more no longer automatically translates into greater economic security. Wages in the U.S. are now lagging behind inflation, according to a new bank rate report. It found, on average, over the last four years, Americans have earned 1.2 percentage points The difficulty of sustaining a household on a single income in the U.S. is not the result of individual choices, but of structural changes accumulated over decades. The transformation of the labor market, the loss of jobs with benefits, the growth of precarious work, and the stagnation of real wages have reduced the ability of a single salary to provide stability. This is compounded by the sustained increase in costs that define middle-class life — housing, health care, education, and child care — which today consume an increasingly larger share of household income. Dual incomes have shifted from being optional to a necessary condition to maintain basic household functioning. Thus, the problem is not that families have stopped believing in the American dream, but that the dream has changed in price, and in today's economy, a single income no longer pays for it.