You Make Six Figures. So Why Does It Feel Like You’re Falling Behind?

There was a time when hitting a $100,000 salary meant you’d made it. These days, in some cities, it barely covers groceries — and there’s a real reason that gap feels so wide.

The U.S. poverty line, the benchmark we still use to define who’s struggling in this economy, was set back in 1963. The formula was simple: take the cost of a minimum food budget, multiply it by three, and that’s your line. At the time, the math worked, because housing was cheap, healthcare barely cost anything, and childcare wasn’t really a paid expense at all. Fast-forward 60 years, and none of those things are true anymore, but we’re still using roughly the same formula. 

On this week’s episode of the HerMoney Podcast, Jean Chatzky sat down with Mark Hamrick, Chief Economic Analyst and writer of The Hamrick Brief, to dig into why the economy can look fine on paper and still feel so tight on your wallet in real life, and what you can actually do about it.

The HAPI Index: A New Way to Measure the Economy

For years, one of the most widely used tools for understanding the economy has been the Misery Index, which combines the unemployment rate and the inflation rate. Add them together, and you get a rough sense of how much financial pain people are feeling.

But Hamrick wanted something that captured the other side of the economy, the side where people are actually getting ahead, not just avoiding disaster. So he built the HAPI (Hamrick American Prosperity Index) by combining two numbers: the employment-population ratio (how much of the population is actually working) and real wage growth (how much paychecks are growing once you account for inflation).

The logic is simple. If more people are working, and their paychecks are outpacing inflation, that should translate into people feeling better about their place in the economy. When either of those things breaks down, so does the feeling of progress.

What the Economy’s Numbers Are Actually Telling Us

According to Hamrick, the HAPI has been trending up recently, a modestly encouraging sign. But he’s careful not to call it a clear trend just yet. Inflation, driven in part by conflict in the Middle East and its ripple effects on gas, jet fuel, and diesel prices, hasn’t fully cooperated the way many economists hoped it would this year.

At the same time, the labor market tells a more complicated story than the unemployment rate alone suggests. Unemployment is historically low, but so is the pace of hiring — what Hamrick calls a “low-hire, low-fire” economy. Some of what’s driving the employment numbers isn’t job losses; it’s more people retiring and stepping out of the workforce voluntarily, often because gains in the stock market and home values gave them the confidence to do so.

The takeaway: the economy isn’t in crisis right now, but it isn’t sprinting ahead either. As Hamrick described it: “not too hot, not too cold. That’s not the worst place to be.”

What You Can Do About It

So how should you navigate an economy that’s sending mixed signals? Hamrick’s advice comes back to fundamentals:

• Build (or rebuild) your emergency savings. “Prioritize savings and specifically emergency savings,” Hamrick said. With most Americans living paycheck to paycheck, an interruption in income is one of the biggest risks in any economy, recession or not.
• Keep your professional network active before you need it. Hamrick recommends treating networking like an ongoing habit, not something you scramble to do the moment you’re job hunting.
• Consider upskilling. Especially around technology and the “soft skills” employers consistently say they wish more candidates had.
• Take a long-term view with your investments. Headlines will always tell you to panic or celebrate. Hamricks’s advice: “Don’t panic, try to maintain calm, and maintain a long-term perspective.” Focus on the fundamentals — a good credit score, on-time payments, and steady savings — and let time do the rest. 

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