Earning enough: Why access to a living wage is a problem that can’t be ignored

Over the past few years, the U.S. labor market has gone through a series of shifts — rapid recovery, record hiring, and now a more uneven and uncertain period marked by slowing job growth and gains in only a few key sectors.

While unemployment remains relatively low by historical standards, workers' experiences tell a more complicated story. Hiring has cooled. Job openings have declined. And for many, wage growth has not kept pace with the rising cost of everyday essentials like housing, food, childcare, and energy.

For millions of full-time workers and their families, the reality is that financial stability and security are far from guaranteed.

This raises fundamental questions about the state of work today. How many workers are actually earning enough to meet their basic needs? And how has that changed over time?

A groundbreaking new research report from Dayforce, Earning Enough, answers both questions. Building on our inaugural 2024 report and conducted in partnership with the Living Wage Institute, this analysis examines how access to a living wage for the full-time U.S. workforce changed from 2021 through 2025. It includes detailed insights by pay type, gender, race and ethnicity, age, generation, state, and metro area. This multi-year view shows who is gaining ground, who is falling behind, and where gaps are widening.

The findings point to a troubling reality.

The key takeaway is that access to a living wage has declined over the past four years. Today, only half of full-time workers in the U.S. — just 50.7% — earn enough to meet their families’ basic needs – a five-percentage-point drop since 2021.

At the same time, disparities across demographic groups and regions remain significant – and in many cases, are widening.

Where the gaps are widening fastest

The data reveals a labor market in which access to a living wage has declined and several disparities have grown.

Men are significantly more likely than women to earn a living wage, with nearly six in ten men (58.7%) meeting that threshold compared to fewer than half of women (43.7%). Since 2021, that gap has widened.

Disparities by race and ethnicity are even more pronounced. Roughly three in ten Black workers (31.2%) and one-third of Latino workers (33.3%) earn a living wage. That is about half the rate of white workers (60.4%).

What’s even more concerning is that these gaps are moving in the wrong direction. Since 2021, the share of Black and Latino workers earning a living wage has declined by nearly seven and six percentage points, respectively.

These trends point to a deeper structural issue: not only has living wage access gotten worse, the workers who typically face other types of economic inequality are losing the most ground.

Setbacks for younger workers

Age and generational trends in Earning Enough tell a similarly distressing story.

One of the few pieces of good news in the report is that Gen Z workers have made measurable gains over the past four years. As they’ve gotten older, advanced in their careers, and increased their income, the share of them earning a living wage increased by more than six percentage points since 2021.

But this progress does not mean that younger workers more generally have seen the same progress. In fact, living wage access for workers who were ages 20 to 34 in each of the five years studied declined. Fewer than one in five (19.7%) workers in the youngest cohort have access to living wages today.

This downward trend was consistent across all age groups including baby boomers, Gen X workers, and millennials.

No region is immune

Geography also plays a significant role in shaping access to a living wage. Here, too, the direction in the findings was broadly negative.

Across the 10 largest states, nine have seen declines in the share of workers earning a living wage since 2021. Pennsylvania ranked last in living wage access (43.3%) and saw one of the sharpest declines. While Texas had the highest rate at 58.6%, the trend was downward there as well.

Some major metro areas show similar patterns, with Chicago, Dallas, New York, and Philadelphia, all experiencing declines.

These regional differences reinforce an important point: where someone works can significantly influence whether they earn enough. But across most geographies, the overall trend is one of decreasing access.

A growing disconnect between work and wages

At a time when there’s growing economic and labor market uncertainty, these findings point to a deeper and more structural issue. The fundamental reality is that having a full-time job is not enough for millions of workers and their families to survive, let alone thrive.

Their lived experience tells a different story – one where wages are struggling to keep pace with the cost of living, upward mobility feels more limited, and financial security is becoming harder to achieve.

What’s more, the burden is not shared equally. While some workers are making progress, many others are falling further behind, with disparities by gender and race continuing to widen.

We believe this research should serve as both a wake-up call and a call to action for employers.

All workers should have the opportunity not just to get by, but to build a stable and secure future where they can afford essential needs, plan for the unexpected, and participate more fully in the economy. Closing that gap will require sustained focus and action across the workforce ecosystem.

The goal is clear: to ensure that more workers can earn enough to support both their present needs and their long-term well-being. Connect with the Living Wage Institute to turn these living wage insights into a total rewards strategy that targets investment where cost pressures hit hardest, strengthening both workforce financial stability and business performance.