Part 10 of Passing the Buck, a 15-part series on why we make less but pay more.
This series has spent nine installments going category by category through the structural changes that have shifted costs from corporate balance sheets onto American households over the last fifty years. Each installment looked at one slice of the picture: wages versus productivity, employer-to-worker benefit transfers, overdraft fees, credit card interest, the cost of car ownership, food, telecommunications, insurance, junk fees. Each slice is a real cost and a real shift. This installment is the synthesis. What does it look like when you put all of those slices together on one household’s budget?
The honest answer is that the math, for the median American household, does not work. I want to walk through why.
The income side
The U.S. Census Bureau’s most recent figures put median household income at $80,610 (2024 data, released September 2024) and median individual earnings for full-time year-round workers at $66,790. The Bureau of Labor Statistics’ wage data tracks roughly with that. These are the numbers the median household actually brings home before any of the costs in the rest of this post.
The Economic Policy Institute’s productivity-pay gap analysis, which I cited in Part 1, gives the counterfactual. If hourly compensation for non-supervisory workers had continued to track productivity gains at the rate it did between 1948 and 1979 — the postwar period in which the two grew almost in lockstep — the median worker today would earn roughly seventy percent more than they actually do. The exact multiple depends on which compensation series and which productivity series you use, but every credible cut of the data lands in a similar place. The decoupling was real, it started in the early 1970s, and the gap has not closed since.
Where did the lost wage growth go? Two main places. Some of it went to higher executive compensation: the EPI’s CEO-to-worker pay ratio for the S&P 500 was 21 to 1 in 1965 and is now 344 to 1. Some of it went to shareholder returns, primarily through the stock buybacks that were largely illegal until the SEC’s Rule 10b-18 in 1982 deregulated them, and which have been the dominant use of free cash flow at the largest publicly traded companies for most of the last twenty years. The aggregate transfer over five decades is in the tens of trillions of dollars, depending on whose calculation you accept. The point for this series is not the exact number; it is that the wage decoupling was the first stage of cost-shifting, the one that happened before the household even saw its paycheck.
The expense side
The Bureau of Labor Statistics’ Consumer Expenditure Survey is the standard source for what the median household actually spends. The most recent release covers 2023, with average annual expenditures of $77,280 against average pre-tax income of $101,805. The largest line items, in roughly descending order: housing (33 percent), transportation (17 percent), food (13 percent), personal insurance and pensions (12 percent), healthcare (8 percent), entertainment (5 percent), and everything else.
The structural shifts I have been tracking through this series show up inside those line items rather than as a separate category. Housing as a share of spending has grown, particularly for renters and for first-time buyers in markets that have not built sufficient supply. Transportation has grown sharply since 2022 as both vehicle prices and insurance rates have outpaced inflation. Healthcare’s eight percent share understates the real burden, because the employer’s portion of the health insurance premium is paid out of the worker’s total compensation package and shows up as foregone wages rather than as a household expense; if you add it back in, healthcare is closer to fifteen percent of total compensation for an insured worker. Personal insurance and pensions has grown as the cost of mandatory insurance categories (auto, home) has risen and as the share of households making any meaningful retirement contribution has shrunk.
The Federal Reserve’s annual Survey of Household Economics and Decisionmaking gives the synthesizing measure I think is most honest: the share of households that report being unable to cover a $400 emergency expense from cash or its equivalent. That number was thirty-seven percent in the 2024 release, slightly improved from the historical highs in the immediate post-2008 period but still alarmingly high in a country with the United States’ aggregate income. Bank of America’s analysis of its own customer transaction data, using a definition of paycheck-to-paycheck that requires spending more than ninety-five percent of income on necessities, puts the figure at roughly twenty-six percent of households; at the ninety-percent threshold, the figure rises to about thirty percent. Bankrate’s 2024 Emergency Savings Report found that forty-four percent of households would not pay a $1,000 emergency from savings. The often-cited LendingClub figure of sixty-plus percent living paycheck to paycheck is, by the consensus of researchers I have read, somewhat overstated due to the survey methodology, but the underlying reality the figure points at — that a large minority of American households are operating at the edge of their cash flow — is well documented across multiple independent data sources.
The honest synthesis is: somewhere between a quarter and a third of American households are running too close to the line to absorb a routine shock, and the share is meaningfully higher among lower-income households. This is in a country where aggregate corporate profits as a share of GDP have run near record highs for the past five years.
What I see in my own household
Our household is not the median household. We are above it. I am writing this from a working operations career that ran for more than twenty-five years inside major media companies; my wife is a working interior architect; we own our house outright after fifteen years of mortgage payments; we live in the Hudson Valley, which is expensive but not New York City expensive. We are, by every measure, doing better than most American households. And the math is still tighter than it should be at our income level, for the reasons I have been documenting through this series.
I left the corporate payroll in 2021. The single largest change in our household budget since then has been health insurance. The employer plan, even in its degraded recent form, was substantially cheaper for substantially better coverage than what I can buy on the New York exchange. The single largest external factor that has hit us in 2025 and 2026 has been homeowners insurance, which has roughly doubled in five years across three carriers, and auto insurance, which has done about the same on two vehicles that have made one claim between them in fifteen years. The cumulative effect of every category in this series — insurance, healthcare, telecom, food, the various junk fees, the credit card float for the apparel business — is that our discretionary cash flow is meaningfully lower than it was at any point in the previous decade, despite gross income being relatively flat.
If our household is feeling it, then the median household, with a much smaller cushion, is feeling it considerably more. The numbers in the Federal Reserve and BLS data are not abstractions to me. They are what is happening at the dinner-table level for somebody with our profile minus the equity in the house, the savings, and the two adult earners.
The mechanism, in one paragraph
The pattern across the nine categories is the same mechanism with different industry-specific particulars. A market becomes more concentrated through mergers that antitrust enforcement does not prevent. The remaining firms develop pricing power, sometimes explicitly through coordination and more often implicitly through tacit understanding of each other’s pricing behavior. The federal regulatory backstop — the antitrust enforcement that was supposed to maintain competition, the consumer-protection rulemaking that was supposed to constrain extraction — either fails to engage or engages and is rolled back by the next administration. The household pays the difference. The shareholders and executives collect the difference. The political system, which now requires private corporate fundraising at every level to win an election, is structurally disinclined to address the underlying mechanism. This has been the operating system of American consumer markets for roughly forty-five years, with brief partial interruptions (the Obama-era credit card and mortgage reforms, the Biden-era CFPB and FTC efforts) that the system absorbed and largely reversed.
The cost did not go away. It moved — from the employer to the household, from the visible price to the deductible, from the deductible to the denied claim, from the wage to the productivity-gap. The household, every step, is the residual claimant on the system.
What’s left in the series
The remaining five installments cover the parts of the story I have not yet gotten to. Part 11 looks at retirement, which is the cost that has been shifted most completely from the employer’s books to the household’s over the past fifty years — from defined-benefit pensions covering roughly forty percent of private-sector workers in 1970 to defined-contribution 401(k)s covering most workers now, with all of the investment risk and most of the contribution responsibility on the individual. Part 12 looks at the federal tax code and the ways the rules have been progressively rewritten to favor capital income over labor income. Part 13 looks at housing, which is the largest single line item in the household budget and the area where the supply-side and demand-side problems intersect most painfully. Part 14 looks at the things this series has not been able to cover — childcare, eldercare, the rest of the social-reproduction labor that has been shifted out of public provision and onto family budgets. And Part 15 looks at what could realistically change, and what is required for any of it to change.
This is not, despite the length, a counsel-of-despair series. The point of writing this out at all is that the structural causes are mostly known, and most of them are reversible if the political will exists to reverse them. What I have been doing, installment by installment, is trying to make the structural picture legible at the household level — not as an abstraction in a Federal Reserve report but as the actual texture of what it costs to live a basically normal life in the United States right now. The fact that the math does not work for the median household is not a failure of the median household. It is a feature of the system as it has been built. The system was built by deliberate choices over five decades. It can, in principle, be built differently by deliberate choices over the next five.
The next installment looks at retirement.
Even that's Odd 
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