With the rising cost of everyday essentials outpacing wage growth, millions of Americans are feeling growing economic strain to make ends meet. When households allocate more money towards basic needs, they may be unable to save for emergencies or accumulate wealth for future investments like homeownership. Local governments can play a vital role in helping residents navigate this what has been deemed the “Affordability Crisis.” Using comparative data from February 2020 and August 2026, the three statistics below help illustrate the landscape of daily economic pressures facing residents so that local leaders are better equipped to be responsive to these needs.
Statistic #1: Groceries Up 32 Percent
According to data from the Federal Reserve Bank of St. Louis, the Food at Home Consumer Price Index grew by more than 30 percent since before the COVID-19 pandemic in 2020. That means, on average, households need to spend 30 percent more to get the same items at the grocery store compared to six years ago. These price hikes can be felt even more sharply on specific food products: the cost of a pound of ground beef is up 79 percent and the price for a dozen eggs is up 57 percent for over the same six-year period.
With these increasing costs on household staples, more municipalities are taking aggressive measures to combat not only the price of groceries, but also the availability of fresh, healthy produce in their communities. From community purchasing to municipal-owned grocery stores, local leaders are focusing on strategies that target specific neighborhoods or residents to ensure that vulnerable populations can purchase healthy and affordable products within their communities.
Statistic #2: Child Care Up 30 Percent
Based on data collected by the U.S. Bureau of Labor Statistics, the average cost of child care rose by nearly 31 percent over the past six years. With state average monthly child care costs ranging from $560 to $1,300, households with children, especially those with low- and moderate-income, must devote increasing portions of their income to child care.
As a result of these growing costs, parents re-entering the workforce or prospective parents face a dilemma: returning to the workforce and paying for child care or forgoing the return to work to become a stay-at-home parent. The challenges with this dilemma are often amplified in different households, including those with a single-parent, low-income households and in families with limited English proficiency. This increasing cost of child care means that parents, especially mothers, can’t always afford to go to work, resulting in lower wages and workforce participation for mothers, a decrease in productivity and revenue nationwide and a “family pay gap” in which fathers tend to earn more after having children while mothers tend to earn less.
Cities and their partners are tackling the child care affordability crisis through a myriad of strategies like supporting the child care sector via business and workforce development for providers and piloting expanded child care benefits for employees.
Statistic #3: Utility Costs Up Around 40 Percent
Water, electricity and heating/cooling help ensure that residents live in clean, healthy and comfortable homes year-round. The cost of these utilities ballooned in the six years since 2020. According to the Federal Reserve Bank of St. Louis, water and sewer costs have increased nearly 34 percent with natural gas, electricity and gasoline prices up 63 percent, 46 percent and 63 percent respectively.
Due to these rising energy costs, around one in seven households are falling into the high energy burden category in which energy costs constitute 6 percent or more of a household’s income. The rising costs of monthly utility bills can compound the high cost of housing (PDF), which is the largest monthly expense for most Americans. These difficult financial choices lead to potentially dangerous situations with nearly one in four households (PDF) reporting reducing or forgoing food or medicine to pay energy costs and one in 20 households (PDF) unable to use heating or cooling for their home. For millions of people, like those using power-dependent medical equipment or living in extreme weather conditions, any discontinuation of power can be deadly.
Connecting residents to utility assistance programs like the Low-Income Home Energy Assistance Program (LIHEAP) can provide much-needed relief for growing energy costs. Cities that manage utilities can also restructure payment plans and connect residents struggling to pay with financial empowerment services through strategies like LIFT UP (PDF). Local governments are exploring ways to lower energy bills through utility debt forgiveness, arrearage management programs and community choice aggregation programs.
Join the Economic Mobility Peer Network
If you want to learn more about the role that cities can play in addressing the Affordability Crisis, consider joining the Economic Mobility Peer Network. You’ll be connected with local leaders focused on economic mobility nationwide. It’s free to join, so don’t miss out.
About the Authors
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