Rising U.S. Household Income Mostly Eaten by Debt Repayments, Study Finds
A new report shows that over half of the income gains of average American workers since 2022 are consumed by debt payments, driven by soaring living costs.
Research released this one outlet indicates that more than half of the post-2022 income growth for the typical American worker is absorbed by debt repayment, as rising housing, food and utility costs force families to rely on credit. The Century Foundation and Protect Borrowers calculate a net monthly income gain of roughly $109 for the average household, contrasted with a $57 rise in debt payments. For households with one earner, 52 cents of every dollar earned are diverted to debt before any other spending, while two-earner families see the entire increase in real income disappear into debt service.
High-interest credit-card balances and auto loans now dominate household liabilities, with debt-service growth outpacing income growth by a factor of eight over the last four years. The findings highlight the growing financial strain on U.S. families amid persistent inflation in essential goods.
Why it matters
It shows how soaring living costs are pushing average Americans into deeper debt despite modest income gains.
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