More Americans Are Struggling as Inflation Outpaces Wage Gains
March 17, 2022
With prices increasing at the fastest pace in 40 years, more Americans are reporting trouble keeping up. In February, inflation-adjusted average weekly earnings fell 2.3% from a year earlier.
Only 18% of Americans say their wages have kept pace with the higher cost of living, according to a recent survey from the Capital One Insights Center.
Low-income households are the most likely to feel the pressure of their eroding purchasing power, with 73% of households with an income below $25,000 saying they had felt the impact of higher prices. Only 9% of these households said their wages had kept pace with inflation and only 10% said they had received a non-performance-based raise or bonus over the past three months.
Households with an income over $100,000 were three times as likely to say their wages had kept pace with inflation, at 31%. Still, 22% of high earners reported difficulty paying all of their bills, more double than double the 10% who felt the same way at the start of the pandemic in April 2020.
The survey also found nearly half of all Americans are relying on their tax refund to ease the stress inflation is putting on their finances, with 49% saying that their refund would be “very or moderately important to their overall financial health this year.”