45.5% of U.S. Households Can’t Afford Basics, Brookings Says

A staggering 45.5% of American households — more than 60 million families — did not earn enough in 2024 to cover basic necessities such as housing, food, healthcare, and transportation, according to a new report from the Brookings Institution. The findings, published Wednesday as part of Brookings’ “States of Affordability” series, paint a stark picture of financial precarity that has persisted for over a decade and is now intensifying under new economic pressures.

A Decade of Struggle, Briefly Interrupted

The report reveals that the affordability crisis is not a recent phenomenon. In nearly every year from 2014 to 2024, more than 40% of U.S. households have struggled to make ends meet. The only exception came during 2021 and 2022, when pandemic-era stimulus checks and expanded tax credits temporarily boosted post-tax incomes, lifting millions of families above the threshold.

But that relief proved fleeting. As federal assistance programs expired and inflation surged in 2022, the share of households able to cover their necessities plummeted by 10 percentage points in just two years, erasing most of the gains from earlier in the decade. As NPR reported, the report found that a mere $1,000 annual increase in costs would push an additional 3 million households into the red.

The Income Side of the Story

“My main takeaway is that when we talk about affordability, we’ve been focusing on inflation. But there’s the income side of the story that we often do not talk about,” said Andre Perry, director of Brookings’ Center for Community Uplift, in an interview with NPR.

The data bears this out. In 2024, national wages rose just 1.3%, well below the inflation rate of 2.9%, according to the Census Bureau. The federal minimum wage has been frozen at $7.25 an hour since 2009, and while U.S. productivity nearly doubled between 1979 and 2025, average hourly pay increased by only 34%, the report notes. This productivity-pay gap has concentrated wealth among capital owners and the highest earners rather than driving broad-based wage growth.

The report identifies two pathways that could dramatically change the picture: 37.9 million households could make ends meet if wages rose by $10 per hour, and an additional 10 million households could manage if costs fell by $500 per month.

Structural Costs and Racial Disparities

Housing, healthcare, and childcare are the largest and most structurally determined costs weighing on household budgets — expenses families cannot easily reduce. “In order to actually solve affordability, we have to deal with these larger, most structural costs that are harming households,” said Hannah Stephens, a senior research assistant at Brookings’ Center for Community Uplift.

The burden falls disproportionately on households of color. In 2024, 55% of households of color could not afford to make ends meet. In Washington, D.C., while more than 60% of all households could afford necessities, Black residents lagged the city’s baseline by more than 20 percentage points. In Kansas, the share of Black households able to make ends meet actually declined by 4 percentage points from 2014 to 2024, falling to just 38%.

Geographic disparities are equally stark. Hawaii has the lowest share of households making ends meet at just 39%, while New Hampshire, North Dakota, South Dakota, Colorado, and Washington, D.C., all exceed 60%.

New Pressures in 2026

Although the report does not examine 2026 data, new financial pressures have already emerged that may have pushed more families past the tipping point. Gas prices have risen 50% since the war against Iran began in late February 2026. The Consumer Price Index stood at 3.8% year-over-year in April, well above the Federal Reserve’s 2% target. A concurrent survey from the Federal Reserve Bank of New York, also released Wednesday, found that food insecurity has reached levels not seen since the depths of the COVID-19 pandemic.

Economists describe the current landscape as a “K-shaped economy,” where upper-income households increasingly earn and spend more while lower-income families fall behind. Data from the Bank of America Institute shows that between 2025 and 2026, higher-income families saw wages rise 6%, while lower earners saw just 1.5% growth.

Political Implications Ahead of Midterms

The report’s release, timed ahead of the November 2026 midterm elections in which 36 governors and hundreds of state lawmakers will be elected, positions affordability as a central political issue. The report explicitly frames itself as a tool for voters to hold elected officials accountable, noting that polling shows affordability is Americans’ top concern across party lines.

Perry emphasized that the crisis is solvable: “It’s dramatic, in the sense that we’re not doing that [raising wages]. But can we do it? Yes.”

What to Watch For

The Brookings series will continue with future entries examining the specific components of the cost of living — housing, childcare, transportation — and offering policy recommendations for state and local leaders. The report also notes that its calculations do not include student or medical debt repayment, nor do they account for savings, meaning even households that technically “make ends meet” may be locked out of wealth-building opportunities.

With new economic shocks compounding a decade-long structural crisis, the question of whether policymakers will act on both the income and cost sides of the equation looms large over the 2026 election season.