As Affordability Crisis Grows Under Trump, Workers Are Losing Half Their Income Gains to Debt Payments
“Families are going further into the red just to cover basic essentials, all while the Trump administration touts hollow talking points about a booming economy.”
A person shops at a grocery store in Brooklyn on December 12, 2025.
(Photo by Spencer Platt/Getty Images)
Jake Johnson
Sep 29, 2026
COMMON DREAMS
Research published Tuesday shows that more than half of the income gains seen by the typical American worker since 2022 has been swallowed by debt payments, as high and still-rising costs of housing, groceries, utilities, and other essentials force families to turn to credit cards and other sources of borrowing to stay afloat.
The new report released by The Century Foundation and Protect Borrowers estimates that take-home income for a typical US household rose by approximately $109 per month while the average worker’s debt payments rose by $57. In households with a single earner, the groups noted, “52 cents of every dollar a worker gained went to paying down their debt before they could actually spend it on other things.”
In two-income households in which both earners faced the average debt payment increase, “the household’s entire real income gain was lost to debt, and then some.”
Credit cards and auto loans—which often come with extremely high interest rates—account for most of the debt burden carried by typical US households, which have seen their debt payments grow more than eight times as fast as their income over the past four years, according to The Century Foundation and Protect Borrowers.
“The economy is rigged against working families, and this report shows one big reason why,” US Sen. Elizabeth Warren (D-Mass.), the top Democrat on the Senate Banking Committee, said in a statement. “For the typical worker, more than half of every dollar of income growth is going right back out the door in debt payments. Instead of letting lenders rip off families, [President] Donald Trump and congressional Republicans should act today to protect families from getting trapped in cycles of debt, including a cap on credit card interest rates.”
Trump repeatedly vowed during his 2024 presidential campaign to cap credit card interest rates at 10%, but he has since done nothing substantive to fulfill that promise as the nation’s credit card debt crisis continues to spiral amid deteriorating economic conditions, with sluggish hiring and inflation—fueled by the president’s illegal war on Iran—outpacing wage growth.
“Families are going further into the red just to cover basic essentials, all while the Trump administration touts hollow talking points about a booming economy and fails to deliver on promises to lower costs,” said Aissa Canchola Bañez, policy director for Protect Borrowers. “Today’s report shows just how dire the affordability crisis is for working people who are being forced to surrender their hard-earned income gains to paying off debt and padding the pockets of credit card executives and debt collectors.”
“Growing household debt is burying America’s workers,” she added, “and policymakers must take action to get them real relief.”
The new research warns that, in the absence of ambitious policy action, the debt emergency facing working-class US households “is about to get worse,” with many student-loan borrowers about to be forced into expensive repayment plans due to the Trump administration’s assault on Biden-era relief efforts.
“Cancelling student and medical debt, capping interest rates, and restraining employer debt traps are all examples of solutions available to provide help to struggling households,” the new report states. “We should also address the ways workers end up in debt in the first place through stagnant wages, eroded bargaining power, and lack of public provisioning. Together these interventions represent a coherent alternative to the status quo so that economic growth is measured by what workers actually keep and not just by what employers pay.”
“Families are going further into the red just to cover basic essentials, all while the Trump administration touts hollow talking points about a booming economy.”
A person shops at a grocery store in Brooklyn on December 12, 2025.
(Photo by Spencer Platt/Getty Images)
Jake Johnson
Sep 29, 2026
COMMON DREAMS
Research published Tuesday shows that more than half of the income gains seen by the typical American worker since 2022 has been swallowed by debt payments, as high and still-rising costs of housing, groceries, utilities, and other essentials force families to turn to credit cards and other sources of borrowing to stay afloat.
The new report released by The Century Foundation and Protect Borrowers estimates that take-home income for a typical US household rose by approximately $109 per month while the average worker’s debt payments rose by $57. In households with a single earner, the groups noted, “52 cents of every dollar a worker gained went to paying down their debt before they could actually spend it on other things.”
In two-income households in which both earners faced the average debt payment increase, “the household’s entire real income gain was lost to debt, and then some.”
Credit cards and auto loans—which often come with extremely high interest rates—account for most of the debt burden carried by typical US households, which have seen their debt payments grow more than eight times as fast as their income over the past four years, according to The Century Foundation and Protect Borrowers.
“The economy is rigged against working families, and this report shows one big reason why,” US Sen. Elizabeth Warren (D-Mass.), the top Democrat on the Senate Banking Committee, said in a statement. “For the typical worker, more than half of every dollar of income growth is going right back out the door in debt payments. Instead of letting lenders rip off families, [President] Donald Trump and congressional Republicans should act today to protect families from getting trapped in cycles of debt, including a cap on credit card interest rates.”
Trump repeatedly vowed during his 2024 presidential campaign to cap credit card interest rates at 10%, but he has since done nothing substantive to fulfill that promise as the nation’s credit card debt crisis continues to spiral amid deteriorating economic conditions, with sluggish hiring and inflation—fueled by the president’s illegal war on Iran—outpacing wage growth.
“Families are going further into the red just to cover basic essentials, all while the Trump administration touts hollow talking points about a booming economy and fails to deliver on promises to lower costs,” said Aissa Canchola Bañez, policy director for Protect Borrowers. “Today’s report shows just how dire the affordability crisis is for working people who are being forced to surrender their hard-earned income gains to paying off debt and padding the pockets of credit card executives and debt collectors.”
“Growing household debt is burying America’s workers,” she added, “and policymakers must take action to get them real relief.”
The new research warns that, in the absence of ambitious policy action, the debt emergency facing working-class US households “is about to get worse,” with many student-loan borrowers about to be forced into expensive repayment plans due to the Trump administration’s assault on Biden-era relief efforts.
“Cancelling student and medical debt, capping interest rates, and restraining employer debt traps are all examples of solutions available to provide help to struggling households,” the new report states. “We should also address the ways workers end up in debt in the first place through stagnant wages, eroded bargaining power, and lack of public provisioning. Together these interventions represent a coherent alternative to the status quo so that economic growth is measured by what workers actually keep and not just by what employers pay.”
“The Trump SEC is seeking to bail out the struggling private equity and private credit industry with hardworking Americans’ retirement savings.”
US Securities and Exchange Commission Chair Paul Atkins and President Donald Trump smile at each other during a meeting with cryptocurrency executives in the Roosevelt Room of the White House in Washington, DC on August 19, 2026.
(Photo by Jim Watson/ AFP via Getty Images)
Jessica Corbett
Sep 30, 2026
COMMON DREAMS
The US Securities and Exchange Commission on Wednesday proposed policies that SEC Chair Paul Atkins framed as an effort to promote private market investments by retail investors—or everyday Americans—while also “protecting those investors from bad actors and fraud,” but critics accused the Republican-dominated federal agency of serving Wall Street at the expense of the public.
“Chair Atkins talks about the ‘responsible retailization’ of the private markets, but the rules the SEC proposed today are irresponsible,” declared Benjamin Schiffrin, director of securities policy for the nonprofit Better Markets. “The SEC is supposed to protect retail investors from risky private market assets. Instead, it is encouraging investors saving for college and retirement to direct their savings to private market investments that do not offer greater returns but that do offer less disclosure and more limited legal recourse when harmed.”
“Although hedge funds may charge fees based on performance to their investors, the SEC has long prohibited investment advisers from charging retail investors performance-based fees,” Schiffrin explained. “This protects them from arrangements that might encourage advisers to take undue risks with retail client funds to increase their compensation. Yet the SEC’s proposed rules would make such arrangements permissible. This change would eliminate a limitation on the ability of private funds that charge performance-based fees to sell to retail investors and would incentivize advisers to push retail clients into risky private funds that have performance-based fees.”
The new rules would also make it easier to sell interval funds, which “hold complex and illiquid assets and charge high fees,” Schiffrin noted. “Given that many interval funds have faced heightened redemption requests from existing investors seeking to exit these funds in recent months, now hardly seems like the time to further expose retail investors to these funds.”
“Perhaps most troublingly, the SEC expands the categories of individuals who qualify as so-called ‘accredited investors’ to whom private market assets may be sold,” he continued. Specifically, the agency said it is considering letting individuals with some certificates or licenses—such as certified public accountants, research analysts, and financial analysts and planners—qualify.
“Accredited investors are supposed to be institutions and individuals with enough assets to bear the risk of loss inherent in private market assets,” Schiffrin stressed. “Now, the SEC would allow individuals to qualify as accredited investors without regard to their ability to lose money in the private markets.”
The expert also highlighted the timing of these proposals, pointing to the agency’s Monday statement that “reminded the private funds industry of its obligations regarding valuing assets and providing disclosure to investors,” which Schiffrin said was “obviously intended to provide cover for the SEC’s desired expansion of the private markets.”
“Having previously downplayed the turmoil in the private credit markets, continued redemption requests by private credit investors forced the SEC to acknowledge that private market assets are particularly risky and to reassure investors it was not asleep at the switch,” he said. “Yet the statement begs the question of why the SEC would seek to expose retail investors to the private markets at the same time it acknowledges the risks that private market assets pose even to institutional investors.”
“The answer is that the SEC has lost its way,” he concluded. “Its agenda is now the financial industry’s agenda, and private funds need access to retail investors and their savings as institutional investors increasingly pull back from private markets. So the proposed rules the SEC issued today have nothing to do with ‘democratizing access’ to the private markets and everything to do with allowing the financial industry to prey on unsuspecting retail investors.”
The SEC chair said Wednesday that the agency’s latest moves “complement efforts undertaken pursuant to” President Donald Trump’s August 2025 executive order on Democratizing Access to Alternative Assets for 401(k) Investors—which Schiffrin warned last year “exemplifies the administration’s determination to prioritize the interests of Wall Street over the interests of Main Street and retail investors.”
“Let’s be clear: Neither 401(k) plan sponsors or 401(k) plan participants—regular, hardworking Americans—are asking to replace stocks and bonds in their 401(k)s with risky private assets,” Schiffrin said at the time. “Instead, the private funds industry needs a way to get its hands on the $12 trillion in Americans’ retirement accounts to boost its profits and make up for the fact that institutional investors are fleeing the private markets due to mediocre returns, higher fees, and more risk.”
Despite such criticism of Trump’s order, the US Department of Labor unveiled its related proposal in March. Jim Baker, executive director of the nonprofit Private Equity Stakeholder Project, pointed to the pending DOL policy in a Wednesday statement responding to the SEC action.
“With the proposed rules, combined with the DOL’s 401(k) rule, the Trump SEC is seeking to bail out the struggling private equity and private credit industry with hardworking Americans’ retirement savings,” he said. “Private equity funds have lagged public markets while charging much higher fees, and institutional investors are pulling back from the asset class. These rules risk shifting more financial risk onto workers who rely on their retirement savings for long-term security.”
“Private equity firms are already under pressure from a backlog of unsold assets and declining distributions to investors,” Baker emphasized. “At the same time, policymakers are giving private equity access to retirement savers’ 401(k) plans, raising serious questions about whether these investment risks are being shifted onto everyday retirement savers.”
“Retirement accounts exist to provide security, not to bail out private market investments by shifting liquidity risk onto workers when markets turn,” he added. “At a minimum, the SEC should hold private equity to the same disclosure and transparency standards expected of publicly traded stocks, mutual funds, and [exchange-traded funds], including clear reporting on what funds are investing in, the fees and expenses retirement savers are paying, the amount of debt funds are using, and how these investments are actually performing compared with stocks.”
Key members of Congress also responded to the SEC’s Wednesday proposals. While Republicans on the US Senate Banking, Housing, and Urban Affairs Committee welcomed the push to expand the accredited investor definition, which aligns with Chair Tim Scott’s (R-SC) Empowering Main Street in America Act, Ranking Member Elizabeth Warren (D-Mass.) was critical.
“Today, the SEC proposed a new rule that would override decades-old protections for Americans’ retirements to allow Wall Street to start charging high, private equity-level fees on lower-cost retail funds,” Warren said. “Americans already struggling to save in Trump’s economy shouldn’t be used as piggy banks to boost the profits of Trump’s Wall Street buddies.”
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