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Dive Brief:
- Despite “nominal” wage increases, Americans’
spending power fellin most of the largest metropolitan statistical areas, an analysis released Tuesday by the Ludwig Institute for Shared Economic Prosperity (LISEP), a nonprofit research organization, found. - Among the 56 largest MSAs, spending power decreased for middle- and lower-income households in 61% of markets in 2024, which is the most recent year that complete localized data was available, per the research.
- Housing, childcare and
healthcarewere the top drivers of cost increases, the research found, backing up numerous other reports ofskyrocketing costs.
Dive Insight:
The cost of living increased 4.7% in 2024, compared to the average annual increase of 3.2% seen since 2005, the LISEP report found. Childcare costs rose an average of 7.6%, and healthcare costs climbed 2.9%.
“This analysis reminds us that rising wages, by themselves, don't tell us whether people are actually better off,” LISEP Chair Gene Ludwig said in a statement. “What matters is whether incomes are keeping pace with the cost of living.”
Employers expect to set base salary merit increases at 3.2% and total salary increases, (including m...