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Affordability has been a politically potent word, but an ill-defined measure of financial pain, often used as a reference to inflated prices.

But new research from the Brookings Institution released Wednesday describes affordability by comparing the rising costs of essentials against family incomes. By that measure, the report found, in 2024 45.5% of U.S. households did not earn enough to cover their necessities.

The report concluded that a mere $1,000 hike in the annual cost of living would leave another 3 million households unable to make ends meet.

That precarity is partly due to the gap between inflation and wages. In 2024, national wages saw just a small 1.3% bump, well below the rate of inflation of 2.9% that year, according to the Census Bureau.

"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, the director of Brookings' Center for Community Uplift.

For the new report, the Brookings researchers gathered household income data for every county in the U.S. and compared those incomes with the estimated costs of necessities like food and transportation in those places.

Households across the country are not earning enough

Housing, healthcare and childcare are especially large chunks of household budgets that families have little control over, said Hannah Stephens, a senior research assistant at the center. "In order to actually solve affordability, we have to deal with these larger, most structural costs that are harming households," she said.

For some families, closing that gap between essentials and income has meant skipped meals, increased debt and delayed medical care, the report found.

Those decisions are playing out across the country, though the data showed some divides across states and racial groups. According to the paper, in 2024, more than 50% of families in New York state could not manage on their incomes. And while households in Washington, D.C., outperformed the national average, with over 60% able to afford necessities, the city's Black residents were significantly worse off, more than 20 percentage points behind the district's baseline. At the same time, Hispanic households did better than the city as a whole, at 3 percentage points higher than the baseline.

There was a brief moment of relief from pandemic stimulus checks

This challenge is longstanding: More than 40% of households were not able to afford what they needed almost every year from 2014 to 2024, according to the report, except for in 2021 and 2022. During those years, Americans' bank accounts were boosted by federal stimulus checks and other forms of government aid meant to help with the COVID-19 pandemic recovery.

Yet the economic health of households relapsed in 2022, when inflation spiked and those federal assistance programs began to expire, shrinking the social safety net at the same time millions of families were moving closer to the edge.

Although the report cites an extra $1,000 in annual expenses as a tipping point many households cannot afford, it does not examine data from 2026, when new financial pressures may have already pushed more families past that point. Gas prices have risen 50% since the war against Iran started at the end of February. Overall, the Consumer Price Index was up 3.8% in April year-over-year — well above the Federal Reserve's 2% target.

A survey from the Federal Reserve Bank of New York, also released Wednesday, found that food insecurity in the U.S. has reached levels not seen since 2020, in the depths of the pandemic. The agency polls people on whether they are relying on food banks or government assistance for their groceries — or are skipping meals.

Many families did receive an extra tailwind this year after Republican lawmakers' signature tax and spending bill led to bigger tax refunds. That's part of what's kept American consumers spending, according to the Bank of America Institute. Excluding spending on gas, year-over-year spending in April was up 4%.

Wages are rising much faster for families already making more

That report also found that incomes have grown quickly between 2025 and 2026 — but for higher-income families. Those households saw pay rise 6% this April compared to a year earlier. But the boost for lower earners was just 1.5%. Economists have been using the term "K-shaped economy" to describe unequal growth, where upper-income households increasingly earn and spend more, while lower-income families earn and spend less.

The Brookings affordability report found nearly 38 million households would be able to get by if workers' wages rose by $10 per hour. But that's a tall order in a nation where the federal minimum wage has been frozen at $7.25 an hour since 2009.

"It's dramatic, in the sense that we're not doing that," Perry said. "But can we do it? Yes."