Paychecks might look bigger, but leading resume-building service, MyPerfectResume, recently revealed that despite an 18% increase in average U.S. wages from 2020 to 2024, rising prices and cost-of-living pressures led to a 2.6% decline in the typical worker's real purchasing power.
According to the "Illusion of Wage Growth" report, workers in 41 states experienced an effective pay cut, with workers being hit hardest in New Jersey (-7.0%), Rhode Island (-6.9%), and Maryland (-5.4%). Even high-income states like California (-4.3%) and Massachusetts (-5.3%) saw wages outpaced by the rising cost of living.
States with the top purchasing power gains from 2020 to 2024 included Idaho (+3.1%), Florida (+2.6%), Washington (+2.3%), Montana (+2.3%), and Wyoming (+1.8%).
"Americans aren't imagining it, bigger paychecks aren't translating into better lives," said Jasmine Escalera, career expert at MyPerfectResume. "This analysis makes clear that the real story of the past four years isn't wage growth, but shrinking buying power. Workers earned more and got less in return."
The report's findings highlight a defining feature of the mid-2020s: inflation quietly transforming the foundations of financial stability. Prices rose about 21% between 2020 and 2024, reducing the buying power of every dollar to 82 cents. Additionally, rising costs for housing, groceries, insurance, and utilities absorbed wage gains across most of the country. The report found that states with lower living costs were more likely to see real wage growth, even without the highest salaries.
This data sheds light on why many workers feel financially strained despite receiving raises, and why those raises aren't translating into an improved standard of living. Wage growth over the past four years hasn't kept pace with inflation and living costs, leaving many Americans earning more but effectively able to buy less.
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