Middle-income Americans are feeling the squeeze

A Pew Research Center survey revealed that 71% of middle-income earners have reduced their spending on non-essentials, such as dining out. Only 47% of these earners were able to save money last year, compared to 39% of lower-income Americans and 13% of the highest earners. The U.S. economy is facing rising costs, with the consumer price index inflation rate increasing to 3.7% in September, above the 3.6% forecast. Inflation-adjusted wages have also been declining for six months.

Lower-income Americans are struggling to afford necessities, with 51% saying they could pay all their bills in full last year, down from 56% in 2020. Middle-income earners saw a similar drop, from 81% to 78%. Even upper-income earners, who have consistently fared better, saw a slight decline from 93% in 2020 to 93% in 2026.

The survey also shows that middle-income earners are aligning more closely with lower-income peers, indicating a worsening economic situation. The Urban Institute found that middle-income renters are now more likely to struggle with rent payments than lower-income renters. Many working people are living paycheck to paycheck, working longer hours for less pay, and facing higher costs for basic necessities like groceries and heating bills.