A growing share of full-time workers in the United States are struggling to earn enough to cover basic living costs, according to a new report, with disparities widening across gender and racial lines.
While younger workers in Generation Z appear to be an exception, most other age groups have seen their access to a living wage decline in recent years.
The analysis by Dayforce found that in 2025, just over half of full-time workers – 50.7 percent – earned what is considered a living wage for where they live. That marks a drop of 5.1 percentage points compared with 2021. Those on salaries are far more likely to meet the living wage threshold, with 83.1 percent doing so, compared to just 30.3 percent of full-time hourly employees.
What To Know
The living wage estimates used in the analysis are based on county-level data from the Living Wage Institute. They reflect the income needed for a household with two working adults and two children to cover basic expenses, assuming both adults earn the same amount.
A living wage differs from the legally mandated minimum wage, which sets the baseline employers must pay. Instead, it reflects what workers need to meet essential costs such as housing, food, childcare and transportation without relying on outside assistance. While the federal minimum wage has remained at $7.25 per hour since 2009, the actual income required to cover basic needs varies widely depending on location and family circumstances.
While most demographic groups have seen declines, Generation Z stands out as an exception. The proportion of Gen Z workers earning a living wage rose by 6.2 percentage points over the past four years.
However, the broader picture across age groups remains negative. Workers aged 20 to 24 saw a decline of 3.9 percentage points, while those aged 25 to 34 experienced a larger drop of 5.5 percentage points. Millennials, Generation X and Baby Boomers all recorded decreases in the share earning a living wage since 2021, with the largest drop recorded for Boomers: 8.3 percent, down from 60.
Gender and Racial Gaps
The findings also point to persistent and growing inequalities. Nearly six in ten men—58.7 percent—earn a living wage, compared with 43.7 percent of women. That gap has widened slightly since 2021, reaching 15 percentage points.
About 60.4 percent of white workers earn a living wage, nearly double the rates for Black workers (31.2 percent) and Latino workers (33.3 percent). The share of Black and Latino workers meeting the threshold declining by 6.8 and 5.8 percentage points, respectively, since 2021.
Costs Outpacing Earnings
The report attributes much of the strain to rising living costs that have outpaced wage growth for many households.
“Over the past few years, the U.S. labor market has remained relatively stable and resilient,” the report reads. “At the same time, job growth has recently slowed, and millions of workers haven’t seen a meaningful improvement in their financial situation.”
It adds that essential expenses, including housing, food, childcare and energy, have climbed significantly, leaving many workers struggling to keep up. “For many, their earnings are simply not enough to meet the basic needs of their families,” the report reads.
Patchwork of Living Costs
What qualifies as a living wage differs sharply depending on where workers live. In some states, the hourly rate required to cover basic needs is significantly higher than in others.
Hawaii has the highest estimated living wage for a single adult with no children, at $31.01 per hour, with states like Massachusetts and California showing similarly elevated levels. For families with children, those figures can exceed $50 per hour.
States such as West Virginia have much lower thresholds, with living wage estimates coming in at under $20 per hour. Kentucky, Arkansas and Louisiana have rates just above $20 per hour for a childless worker.
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