WASHINGTON, D.C. — In 2024, 45.5% of U.S. households did not earn enough income to cover basic necessities such as food, housing, and transportation, according to a new report from the Brookings Institution. The analysis compared household income data in every U.S. county against local estimates for the cost of essential goods and services.

Brookings researchers found that a $1,000 annual increase in the cost of living would push an additional 3 million households below the threshold for meeting basic needs. National wages rose by 1.3% in 2024, lagging behind the 2.9% inflation rate recorded 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. Perry noted that nearly 38 million households could afford necessities if worker wages increased by $10 per hour. "It's dramatic, in the sense that we're not doing that. But can we do it? Yes." he said.

"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 the Brookings Institution.

The report documented that some families coped with income shortfalls by skipping meals, taking on more debt, and delaying medical care. More than 50% of households in New York state could not afford necessities in 2024. In Washington, D.C., over 60% of households overall met basic needs, but Black residents were more than 20 percentage points less likely to do so than the citywide average. Hispanic households in the district had a 3 percentage point higher affordability rate than the baseline.

From 2014 to 2024, more than 40% of U.S. households were unable to afford necessities in most years, with the exceptions of 2021 and 2022. The Brookings report attributed the temporary improvement during those years to federal stimulus checks and other pandemic-related government aid. Household financial conditions deteriorated in 2022 as inflation spiked and federal assistance programs expired.