Report Shows a Decline in U.S. Workers That Earn a Living Wage

New research data shows access to a living wage has declined for many workers throughout the United States, indicating the recent economic and business climate is leaving behind vulnerable groups.

The affiliated report, “Earning Enough: Living Wage Access in America 2026,” released April 29 by human capital management platform provider Dayforce, stated 51% of American workers earn enough to meet basic needs, compared to 56% in 2021. The data pool covered more than 15,000 full-time workers.

The findings, developed in partnership with the Living Wage Institute (an offshoot entity from Massachusetts Institute of Technology compensation research), highlight a deeper structural issue, where workers who typically face other types of economic inequality are losing the most ground.

“While unemployment remains relatively low by historical standards, workers’ experiences tell a more complicated story. Hiring has cooled. Job openings have declined. And for many, wage growth has not kept pace with the rising cost of everyday essentials,” said Jason Rahlan, Dayforce’s global head of sustainability and impact. “For millions of full-time workers and their families, the reality is that financial stability and security are far from guaranteed. This raises fundamental questions about the state of work today. How many workers are actually earning enough to meet their basic needs? And, how has that changed over time?”

The Living Wage Institute defines a living wage as the minimum hourly rate a full-time worker (working 2,080 hours in a year) must earn to cover their family’s basic needs (e.g., housing, food, childcare, healthcare, transportation, taxes) without relying on outside assistance.

The new report echoed some of the challenges and opportunities cited in WorldatWork’s living wage research published in 2024. The WorldatWork study found that, among surveyed employers:

• 36% were paying living wages;
• 36% were not considering paying living wages;
• 16% were evaluating/implementing policies; and,
• 12% were unsure of their stance.

WorldatWork’s research also pointed to five main structural challenges to implementing living wages:

• 29% of respondents said budgets limit living wage initiatives;
• 29% said market pressures prevent transition;
• 18% said unequal pay by location generated issues;
• 15% cited the complexity of determining a living wage; and,
• 14% said they were unclear about living wage benefits and processes.

Gender and Racial Wage Gaps Widen

The data in the new Dayforce report reflects a growing divide, particularly in gender and race. While 59% of men earn a living wage, just 44% of women meet that threshold.

Racial disparities are even more pronounced. Among:

• White workers, 60.4% earn a living wage.
• Latino workers, 33.3% earn a living wage.
• Black workers, 31.2% earn a living wage.

The share of Black and Latino workers earning a living wage has declined by nearly 7 and 6 percentage points, respectively, since 2021.

Demographics Reflect Distress

While the overall trend is distressing, the Dayforce study finds a stark contrast between different age cohorts.

Generation Z workers have made progress, with the portion earning a living wage increasing by more than 6 percentage points since 2021 (29% vs. 23%) as they advance in their careers.

Despite that growth, overall living wage access for workers aged 20 to 34 has declined, with 20% in the youngest cohort earning a living wage (vs. 24% in 2021).

The downward trend in accessing a living wage was consistent across other age groups.

‘A Call to Action for Employers’

The report cited the important role of employers in addressing the current state.

“We believe this research should serve as both a wake-up call and a call to action for employers,” Rahlan said. “All workers should have the opportunity not just to get by but to build a stable and secure future where they can afford essential needs, plan for the unexpected and participate more fully in the economy. Closing that gap will require sustained focus and action across the workforce ecosystem.”

Editor’s Note: Additional Content

For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics:

• Employee Compensation
• Well-Being