Most American workers say their pay can’t keep up with prices

Workers report the biggest gap in years

Nearly two out of three American workers say their paychecks aren’t keeping up with rising costs.

That’s about 62%, according to Bankrate’s 2025 Pay Raise Survey, and it’s the highest share in four years of polling.

The number has climbed steadily since 2022, when 55% of workers said the same thing. Bankrate surveyed about 2,500 U.S. adults in early September 2025.

The message is clear: even as inflation slows down, workers still feel squeezed.

Prices slowed but never came back down

Inflation has cooled off, but that doesn’t mean things got cheaper.

The annual rate sat at roughly 2.9% as of August 2025, way down from the 8.3% peak in mid-2022. The problem is that prices stack up over time.

Rent has jumped about 27% since 2021, and groceries have climbed roughly 25%, according to Bankrate’s look at federal data.

So even though prices aren’t rising as fast, everyday costs are still much higher than they were before the pandemic.

Wages grew but not fast enough

Here’s where it gets frustrating. Bankrate’s Wage to Inflation Index shows that since January 2021, total wage growth has trailed total price increases by about 1.2 percentage points.

That means the typical worker has less buying power today than before the pandemic price surge. Federal data does show wages beating inflation on a year-over-year basis every month since June 2023.

But those recent gains haven’t been big enough to erase the steep losses workers took in 2021 and 2022.

Even raises fall short for most workers

Getting a raise hasn’t solved the problem for most people. Among workers who did get one in the past year, 58% said it still didn’t match inflation.

The share who felt their raise actually kept pace with prices dropped to 34%, down from 42% the year before. Wage growth itself has slowed.

It peaked at roughly 6.7% in mid-2022, according to Atlanta Fed data, and has fallen to around 4.1%. Employers are handing out smaller raises and giving them to fewer people.

Fewer workers got any raise at all

Less than three in five workers, about 57%, got any kind of pay bump in the past 12 months. That’s the lowest share since Bankrate started tracking in 2022.

Most who did get raises earned them by staying put at their current job.

Only about 7% said they landed a better-paying position somewhere else, a sharp drop from previous years. The days of jumping ship for a big pay boost have faded fast.

Baby boomers feel the pinch most

Older workers are getting hit especially hard. More than half of baby boomers, about 54%, said they got neither a pay increase nor a new job this year.

Just 5% of boomers found better-paying work, compared to 17% of Gen Z and millennial workers. Boomers were also less likely to say they plan to look for a new job or ask for a raise.

Only about one in four said they’re likely to search for new work in the coming year.

Younger workers lost their best tool

Gen Z workers saw a big drop in confidence about future pay bumps, falling from 61% in 2024 to 50% in 2025. They were also far less likely to land a better-paying job this year.

Only 17% did, compared to 32% a year ago. Millennials saw a similar slide, dropping from 26% to 17%.

The cooling job market has taken away the main strategy younger workers relied on to keep up with inflation: switching jobs for higher pay.

Confidence keeps dropping across the board

About 42% of workers say they don’t expect to get a raise or find a better job in the next year, up from 36% in 2024. Only 27% say their pay has kept pace with or beaten inflation, down from 32% the year before.

Nearly 70% report some level of worry about job security. The hiring rate has slowed to its lowest pace since 2013, according to Labor Department data.

Workers feel stuck, and the numbers back them up.

The hot job market has cooled off

The post-pandemic job market that gave workers real leverage to demand better pay has weakened. Job-hopping no longer guarantees a bigger paycheck.

The Atlanta Fed reports that wage gains for people who switch jobs and those who stay are now nearly the same. Job searches are taking longer too, with one in four unemployed workers now jobless for more than six months.

About 7.4 million openings remained as of mid-2025, but actual hiring has slowed sharply.

Tariffs add new pressure on prices

Tariff-related cost increases are putting fresh pressure on what Americans pay at the store.

Some businesses have started passing those costs to shoppers, though the effect has been smaller than many economists expected so far.

Federal Reserve officials have said the tariff-driven price bump could prove temporary, but the uncertainty has made them cautious about cutting interest rates.

If tariffs push inflation higher again, the slow recovery in worker buying power could stall or reverse.

Paychecks could catch up by late 2026

Bankrate projects that if current trends hold, workers’ pay could fully close the gap with post-pandemic inflation by the third quarter of 2026.

That depends on inflation staying relatively low and wage growth continuing at its current pace. But tariff increases, supply chain problems, or a further slowdown in hiring could push that timeline back.

For now, most workers remain in what Bankrate calls a catch-up phase, where pay is rising but not fast enough to undo years of damage.

Lower earners carry the heaviest burden

The gap between wages and prices has real consequences: harder times paying down debt, saving for retirement, and handling emergencies.

More than half of Americans say the economy is on the wrong track, according to Bankrate’s Consumer Sentiment Survey. Workers who earn under $50,000 a year are hardest hit.

Only 26% of them say their pay has kept up with rising costs.

Even though inflation has cooled on paper, millions of Americans are still waiting for their paychecks to catch up to their bills.

This article was created with AI assistance and human editing.

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