Why Is It So Hard to Make a Living Today?

The sentiment that “it’s hard to make a living today” reflects growing economic pressure across the country. This widespread feeling stems from a complex interplay of economic shifts, evolving market dynamics, and increasing financial demands. It is a challenge rooted not in a single issue, but in a convergence of factors that collectively strain household budgets and impact financial well-being.

The Rising Cost of Living

The increasing cost of essential goods and services significantly erodes purchasing power, making it challenging to maintain a standard of living. Inflation means wages buy less over time. For instance, the annual inflation rate for the United States was 2.7% for the 12 months ending July 2025, with prices cumulatively 24.3% more expensive than before February 2020.

Housing expenses represent a substantial portion of household spending, and these costs have seen considerable increases. The median U.S. home price was $349,225 in early 2025, a rise of approximately $100,000 from 2020. Average monthly rents nationwide were around $2,075 as of March 2025, reflecting a 4.09% year-over-year increase. From 2020 to 2024, rent prices increased with an average annual growth rate of 5.97%.

Healthcare expenses continue to climb, placing a heavy burden on individuals and families. Total national health expenditures reached $4.5 trillion in 2022, with out-of-pocket spending at $1,514 per capita in 2023. In 2025, private health insurance plans averaged $621 per month, or $7,452 per year, marking a 7% increase from 2024. This continuous rise in healthcare costs affects household budgets.

The cost of education, particularly higher education, continues to rise, creating a significant financial hurdle. College tuition and fees increased by 4.7% from 2020 to 2023, with postsecondary institutions seeing an average annual increase of 5.87% in tuition. The average cost of a four-year degree, including tuition, fees, and accommodation, is $30,884, with average in-state tuition alone at $9,750. This escalating cost often necessitates student loans.

Beyond housing, healthcare, and education, the prices of everyday necessities also contribute to the rising cost of living. Food prices, for example, rose by 2.9% in the 12 months ending July 2025, with food at home climbing 28.3% since January 2020. Utility costs have surged, with electricity costs 5.5% higher and natural gas up 13.8% compared to a year ago. Transportation costs increased by 1.5% for private transportation from 2023 to 2024, with motor vehicle insurance and maintenance seeing increases of 17.8% and 6.1% respectively. Total annual household spending on transportation reached $12,295 as of 2023.

Evolving Work Landscapes

Changes within the labor market and the nature of work present significant challenges to earning a sufficient income, notably through wage stagnation. Average wages have not kept pace with increases in productivity or the rising cost of living, leading many individuals to feel financially constrained despite contributing more to economic output.

Technological advancements and increasing automation reshape the job market, impacting employment availability and requiring new skills. Automation can displace labor in routine tasks, necessitating a shift towards roles demanding higher-level cognitive abilities, problem-solving, or interpersonal skills. This creates a skills gap, as the workforce may lack qualifications for emerging industries. As industries evolve, education and training systems may not keep pace, leaving workers unprepared for opportunities, leading to underemployment.

The rise of the gig economy has introduced new forms of precarious work, characterized by unpredictable income, limited benefits, and reduced job security. Independent contracting and gig work often lack employer-sponsored health insurance, paid time off, or retirement contributions, shifting financial responsibility onto the individual. This can make long-term financial planning and stability more difficult.

Globalization also increases competition for jobs across international borders. In some sectors, this heightened competition can exert downward pressure on wages, particularly where tasks can be outsourced or performed more cheaply elsewhere. This global dynamic can complicate efforts to secure well-paying jobs domestically.

Accumulating Financial Obligations

Various forms of personal debt and unavoidable expenses reduce disposable income, making it difficult for individuals to save and build wealth.

Student loan debt impacts individuals’ financial lives, affecting their ability to purchase homes, start families, or save for retirement. The burden of these loans can extend for decades, diverting a significant portion of monthly income toward repayment.

Consumer debt, including credit card balances and auto loans, contributes substantially to financial strain. High interest rates on credit cards can trap individuals in a cycle of payments where a large portion goes toward interest. Auto loans represent another fixed monthly obligation that reduces available income.

Unexpected medical emergencies or chronic health conditions can lead to significant medical debt, even with health insurance. While insurance covers a portion of costs, deductibles, co-payments, and out-of-network charges can quickly accumulate. This can force individuals to incur debt or deplete savings, undermining financial stability.

The cost of childcare is a substantial and often prohibitive expense for many families. Childcare expenses can consume a large percentage of a household’s disposable income, sometimes making it economically unfeasible for one parent to work. This limits families’ ability to save, invest, or pursue other financial goals.

The impact of taxation significantly reduces net income, affecting the actual amount of money individuals have available. Income, property, and sales taxes all diminish take-home pay, meaning gross income does not fully reflect purchasing power. These mandatory deductions represent a considerable portion of earnings, further tightening household budgets.