In the United States, the significance of a six-figure annual salary is no longer what it used to be, according to a Harris Poll. The poll results suggest that by 2025, a six-figure income can barely cover basic living expenses and does not necessarily mean success.
Today, a six-figure income is seen as a mere survival marker rather than a symbol of financial stability, as stated by Libby Rodney, Chief Strategy Officer of the Harris Poll, as reported by USA Today.
One-third of those earning a six-figure salary expressed financial strain in the survey, with two-thirds feeling that a six-figure income does not symbolize wealth.
The Harris Poll, conducted on November 14, surveyed 2,109 Americans, including 728 individuals with annual incomes of at least $100,000.
The notion of high-income individuals facing financial constraints may seem counterintuitive. Economic data shows that high-income Americans are playing an increasingly vital role in the economy, continuing to spend comfortably even during economic hardships affecting others financially.
Research by Mark Zandi, Chief Economist at Moody’s Analytics, reveals that the top 10% of earners contribute over 49% of consumer spending, the highest level in decades. Rising property prices and record stock gains have further enriched America’s wealthy.
Ryan Sweet, Chief U.S. Economist at Oxford Economics, notes that overall, high-income households are doing well economically. They have been consistent consumers, essentially driving consumer spending.
Considering the median annual income of full-time American workers at around $62,000, a $100,000 yearly income should be sufficient to qualify as middle class. While the American middle class may not be affluent, they are accustomed to a certain level of financial stability.
Yet, many high-income earners in the Harris Poll indicated struggling to make ends meet. Three-quarters admitted to using credit cards due to cash shortages, and over half stated they would need to double their income to feel financially secure.
The survey found that high-income individuals are more likely to turn to credit cards when short on cash compared to other consumers, and are also more inclined to use installment financing for daily expenses.
Some earners in the six-figure range mentioned resorting to selling personal items, cutting medical expenses, and even tightening their belts to make ends meet.
Like in other parts of the U.S., high-income earners have been grappling with years of accumulated inflation. Prices surged during the COVID-19 pandemic, with current inflation rates surpassing those of early 2020 by at least 24%, according to Bankrate’s data.
Comerica Bank’s Chief Economist, Bill Adams, calculates that by 2025, an individual would need an annual income of $170,000 to maintain the same purchasing power as $100,000 in 2005.
A 2025 analysis by the personal finance website LendingTree revealed that even in many U.S. cities, a household earning six figures may still struggle to make ends meet.
In the top 100 largest metropolitan areas in the U.S., 25 cities have basic monthly living expenses exceeding the monthly income of a family of three earning $100,000 annually.
Adams noted that those earning six figures are concentrated in the highest cost of living urban areas of the U.S., where expenses are considerably higher.
Living in Manhattan on a $200,000 salary versus residing in Toledo, Ohio, is a vastly different situation.
The latest report from the Harris Poll, titled “Income Paradox Survey,” reflects the paradoxical descriptions of the current economic situation provided by recent economic data.
While consumer confidence is decreasing, with the University of Michigan’s Consumer Confidence Index hitting a three-year low of 53.6 in October, federal data shows continuous growth in consumer spending, driven by wealthy Americans.
Sweet emphasized, “Consumer actions often speak louder than words. If I were to investigate the situation personally, I would closely monitor consumer behavior rather than their words.”