Century Foundation Says Debt Payments Jump 14.8% Since 2022 as Real Income Rises 1.7%
Updated
Updated · The Washington Post · Oct 10
Century Foundation Says Debt Payments Jump 14.8% Since 2022 as Real Income Rises 1.7%
1 articles · Updated · The Washington Post · Oct 10
Summary
Debt service has eaten up much of workers’ pay gains since late 2022, with required non-mortgage payments rising 14.8% versus 1.7% real income growth, according to a Century Foundation and Protect Borrowers report.
For a single earner, real monthly take-home pay rose $109 while debt payments climbed $57, absorbing 52 cents of every extra dollar; for a dual-earner household, combined debt increases of $114 slightly exceeded a $109 income gain.
About 80% of working-age adults carry consumer debt, and required monthly payments now take roughly 10% of after-tax household income, up from 8.9% at end-2022, driven mainly by credit cards and auto loans.
Auto borrowing is adding to the squeeze: 21.2% of new-car buyers took on $1,000-plus monthly loans in the third quarter, with average new-car payments reaching $787.
The groups argue standard wage measures miss that pressure and propose a new metric, Real Income Net of Debt, as affordability and household finances loom over the midterm elections.