Pay Not Keeping Up: Workers Feel Squeeze from Rising Expenses

Pay Not Keeping Up with Rising Expenses: A Growing Concern

Pay status has become alarmingly stagnant, with a significant number of workers expressing frustration over rising expenses. According to a recent Bankrate survey, 62% of workers report that their income is failing to keep pace with escalating costs over the past year, marking the highest proportion in four years.

Inflation Trends and Worker Sentiment

Over the years, although inflation has cooled, it hasn't alleviated the financial burdens faced by many. Grocery prices for staples such as coffee and ground beef are looming higher, driven by an AI data center boom that is spiking energy costs.

• Current inflation rate: 2.9%
• Peak inflation in 2022: 8.3%

Sarah Foster, an economic analyst at Bankrate, emphasizes this economic crossroad as workers feel squeezed by rising prices while facing a slowing job market.

Job Market Outlook

Confidence in finding better-paying jobs has dwindled, with over 42% of workers expressing doubt about their prospects of securing raises or new positions in the coming year. Despite some wage increases this year, 58% indicate their pay is falling short of inflation rates.

The Purchasing Power Dilemma

Since January 2021, wages have lagged behind price increases by 1.2 percentage points, resulting in diminished purchasing power for many workers. Essential costs, including rent (+27%) and groceries (+25%), have surged past overall inflation levels.

Policy Implications and Future Outlook

The pressures of President Trump’s trade war continue to amplify prices, spurring caution among policymakers at the Federal Reserve regarding interest rate adjustments. As the ongoing government shutdown hampers economic data access, uncertainty persists in evaluating the inflation landscape.

Bankrate's survey, conducted from September 2-4, 2025, including 2,497 U.S. adults, sheds light on the financial stress many are currently navigating.