Half of U.S. Workers Earn a Family-Sustaining Living Wage — and the Gap Is Growing

Powered by our county-level living wage data, Dayforce's new Earning Enough report finds that only half of full-time American workers earn enough to meet their family's basic needs, and fewer workers are earning family-sustaining wages than in 2021. In this blog, we dive into what the Dayforce data reveals and why the findings matter for employers today.

The five-year trend: Hourly workers lost ground

To capture changes in worker earnings between 2021 and 2025, the Dayforce report draws on de-identified payroll records for millions of workers alongside our living wage data, tracing the full arc from pandemic-era wage gains through the cost surge that followed. 

For a brief window after the pandemic, the share of workers earning a family-sustaining living wage—enough to cover basic needs for a family of four with two full-time working adults and two children—held steady. But between 2022 and 2023, the share of full-time workers earning a family-sustaining living wage dropped from 55% to 50%, a five-percentage point swing. By 2025, roughly half of workers in the weighted Dayforce sample could cover their family's basic needs with their earnings.

Overall workforce trends mask a sharp divergence by pay type: salaried workers are much more likely to earn family-sustaining wages than hourly workers, even when working full-time. For example, since 2021, at least 82% of salaried workers have earned a family-sustaining living wage. In contrast, the share of hourly workers able to cover their family’s expenses has steadily dropped, from 35% in 2021 to a low of 28% in 2023. Nearly one in three full-time hourly workers is unable to cover their family's basic needs.

Earnings grew, but not enough and not equally

Counterintuitively, hourly workers actually received raises every year between 2021 and 2025. Median earnings for hourly workers rose from roughly $40,100 to $46,700 over the period, about a 16.5% increase. But the cost of living grew faster: 23.8% over the same period. A typical hourly worker already started the period earning $8,000 short of what their family needed. By 2025, that gap had grown to $13,000, despite four straight years of wage increases.

The hourly earnings gap to a family-sustaining living wage widened most sharply between 2022 and 2023, when the cost of living jumped up 10.5%—driven by surging childcare, housing, and healthcare costs—while median earnings for hourly and salaried workers grew at less than half that rate, at 4.3% and 3.9%, respectively. Between 2024 and 2025, wage growth slowed further for both groups, while growth in cost of living continued to outpace it.

Despite similar wage growth across pay types, these cumulative shortfalls hit hourly workers hardest. A 4% raise on $84,000 salary produces $3,360 in additional annual earnings, while that same raise on $40,000 in hourly wages produces an extra $1,600 for full-time work. Where workers start determines how far their raises actually take them.

Rethinking hourly compensation as a continuous process

The data points to the challenge of treating hourly compensation as a periodic correction rather than a continuous process. While pandemic-era wage bumps were necessary—and made a material difference for workers—they were also reactions to acute labor market pressures. The five-year trend shows that one-time wage corrections don't hold. 

But the data also demonstrates that how employers set and adjust wages can't be one-size-fits-all across the workforce. Because hourly workers start further from earning a family-sustaining living wage, the same percentage raise closes less of the gap for them than it does for salaried workers. Applying the same annual calibration logic across both groups means hourly workers will fall further behind on affordability, even when raises look comparable on paper.

The employers making real progress are building cost-of-living data into their compensation planning by identifying incremental, location-specific adjustments for hourly workers that reflect local cost pressures and the gaps workers are already navigating. This approach can be more cost-effective than periodic catch-up investments, and it builds the kind of workforce stability that shows up in retention, engagement, and productivity.

Explore our data or connect with our team to see how location-specific compensation benchmarks can  help your workers meet their basic needs and help your team proactively make progress on closing the gaps before they grow.

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Acknowledgements: The earnings data referenced in this analysis comes from Dayforce's Earning Enough: Living Wage Access in America report. We are grateful to Jason Rahlan, Marko Miholjcic, and Brittany Schmaling of Dayforce for their partnership and providing custom data cuts to support this analysis.