Americans have to earn at least $100,000 to scrape by in most metros, new study finds

Earning $100,000 used to be a staple of the American Dream; now, it’s just enough to scrape by in the vast majority of major U.S. cities.

According to a new report by Creditnews Research, a typical family of four needs to earn at least $100,000 a year in 85% of the country’s largest metro areas to be considered working-class.

To put that into perspective, the typical American family earns just under $75,000 per year. By Creditnews Research's estimates, that income is not enough to afford to get by in any of the country’s largest 100 metro areas.

The report said that “costs associated with children are one of the major drivers of minimum income thresholds.”

A two-income household with no children has to earn 42% more if they have one child and 79% more if they have two children just to afford basic expenses.

On a regional level, the ten most expensive metros require a minimum annual income of $140,000 or more for a family of four. Among the ten most expensive metros, four are in California.

The ten least expensive metros are all located in the South, but even they require a minimum income of between $87,000 and $97,000 for a family of four.

Poverty levels on the rise

Last year, poverty in the U.S. rose at the fastest pace on record.

In 2023, 12.4% of the country’s population lived in poverty—up from 7.4% in 2021. The child poverty rate more than doubled to 12.4% from 5.2% a year earlier.

To get a sense of just how bad their situation is, consider that the income threshold for poverty was $30,000 for a family of four. Tens of millions of Americans fall under that threshold.

It comes as little surprise that the states with the highest poverty levels—California and New York—are also among the most expensive in the country.

For the recent jump in poverty levels, experts blame the end of Covid relief programs and an unequally distributed labor market.

“The most important element for people in my community is can we get a job, and if we can get a job, can we keep a job?” Michelle Holder, an economist at John Jay College, told The New York Times.

“Tight labor market conditions are incredibly powerful, they’re really important, but they’re not sufficient” for pulling people out of poverty, said Elisabeth Jacobs, a senior fellow at the Urban Institute.

Americans from all walks of life aren’t keeping up with the cost of living. Families with young children are the most vulnerable as more of their paychecks go toward childcare expenses.