Why Are Ordinary Families Growing Increasingly Anxious Even as Wages Clearly Rise?

A Rise in Individual Hourly Wages Doesn’t Mean the Household is Wealthier

We often equate “higher wages” with “a better life.” However, research from the Treasury Department points out that an increase in individual hourly wages is only half the equation for household income; the other crucial factor is “total hours worked”.

Over the past few decades, although the hourly wages of full-time working women have steadily increased across every generation and age group, they still face a significant gender pay gap. For example, among the generation born in the 1960s, by the time they reached age 45, the hourly wage of a typical full-time working woman was $18, while the median for men was $23. Meanwhile, the overall labor force participation rate for men has been steadily declining since 1948.

This means that men’s average working hours are decreasing, and women’s hard work has largely just been filling the gap left by declining male earnings. When we look at the household as a whole, what determines a family’s sense of financial security is no longer one individual’s high hourly wage, but the total hours worked and total income pieced together by all members.

The Education Divide: Income Split into Two Tracks

The second mechanism undermining financial security is the “polarization” brought about by education. Education is not just a difference in academic credentials; it acts more like a scalpel, slicing men’s lifetime earnings into two completely different tracks.

We can look at two starkly contrasting sets of historical data: for men with only a high school diploma, they have experienced a substantial decline in earnings at every stage of their life cycle. For instance, the real annual income of non-college-educated men born in the 1960s at age 40 shrank by a full 13% compared to their predecessors born in the 1940s at the same age.

Conversely, men with postgraduate degrees or higher represent the other side of the coin. The real annual income of highly educated men with postgraduate degrees born in the 1960s at age 40 was about 19% higher than that of their peers born in the 1940s.

This gap determined by education level has directly widened the wealth divide among full-time working men. At age 45, the midpoint of life, the ratio of the annual income gap between high-earning men (the top 20%) and low-earning men (the bottom 20%) surged from 3.6 times for the generation born in the 1940s to 4.8 times for those born in the 1960s. Education has become an invisible barrier; the highly educated not only earn higher hourly wages, but thanks to better health or changes in the nature of their work, the upper age limit for maintaining high earnings has been greatly extended. Meanwhile, the less educated face the pressure of a downward income trajectory much earlier.

The Missing Half: The Invisible Breakdown of Family Structure

Beyond the divergence in individual working hours and educational attainment, the third and most easily overlooked mechanism stems from changes in family structure. In the past, the mainstream model was two adults forming a household and sharing financial burdens. However, over the past few decades, the downward trend in marriage rates has been very pronounced.

This decline in marriage rates has not been evenly distributed across social classes, but rather exhibits a strong “educational selectivity”. Among households with a college degree or higher, the marriage rate for those in their 40s has remained largely stable at 65% to 70%; whereas for households without a college degree, the marriage rate has plummeted to just around 55%.

Statistically, the decline in marriage rates is often accompanied by a reduction in the “second earner” within the household. In families without a college degree, the proportion of households with two or more adult earners has dropped significantly due to the rise in single-parent or single-person households. While this is not a simple causal relationship, the objective reality of “having no spouse” indeed makes it much harder for many less-educated families to achieve the financial complementary effect of a “dual-income” household, thereby objectively facing greater pressure to be supported by a single earner. This structural change at the family level has invisibly stripped ordinary families of their second line of defense against external risks.

After Reassembling the Puzzle: The Real Survival Struggle of Ordinary Families

When these three mechanisms—the divergence in hourly wages, the reduction in total working hours, and the increase in single-earner households—intertwine, we get the puzzle of severely imbalanced household income we see today.

A stark contrasting statistic is this: compared to twenty years ago, the total weekly working hours (the sum of the hours worked by the head of household and their spouse) for households headed by individuals without a college degree have decreased by a full 10% or more; in contrast, for households at the top of society, composed of highly educated individuals, total weekly working hours have seen almost no decline. This shows that it is not that ordinary families have become lazy, but rather that families with lower educational attainment are comprehensively losing out in terms of job opportunities and competitiveness in the labor market.

As a result, even if the hourly wages of individuals in low- and middle-income groups occasionally fluctuate, under the dual blow of reduced working hours and single-earner support, their total household income has barely moved forward, and has even regressed. Meanwhile, for high-income households (the top 20%) that enjoy the advantages of high educational attainment and dual incomes, the income curve continues to rise steadily.

What best illustrates this temperature difference in anxiety is an objective observation regarding the peak of the life cycle: high-income households only reach their peak household income after working desperately until around age 55, and can maintain this level for a relatively long time thereafter; in contrast, low- and middle-income households often reach their peak household income early, around age 45—precisely when the midlife crisis is at its deepest, with aging parents above and young children below—and begin to decline from then on. This is perhaps the most genuine source of the powerlessness and anxiety felt by ordinary people on their commute as they look at their bills.

---

Source institutions：U.S. Department of the Treasury

This content is for reading and understanding research reports. It does not constitute investment advice or trading signals.