Housing and childcare drive surge; cost of a minimal quality of life now exceeds $121,000 for family of four

WASHINGTON, Feb. 26, 2026 /PRNewswire/ — In 2024 the cost of achieving a basic but secure American life increased by 4.4%, further stretching household budgets as wages fail to keep pace, according to new data released today by the Ludwig Institute for Shared Economic Prosperity (LISEP).

LISEP’s True Living Cost (TLC) Index and Minimal Quality of Life (MQL) Index show the price of both essential needs and upward mobility increased 4.4% in 2024. Although lower than the sharp spikes recorded in 2023—9.9% for TLC and 9% for MQL—the increases still outpaced the 3.9% growth in median weekly earnings for full-time workers, resulting in a 0.4% erosion of purchasing power.

Unlike the Consumer Price Index (CPI), which measures overall price changes across a basket of more than 80,000 goods and services, LISEP’s indices focus specifically on the costs that determine whether households can meet essential needs and build toward long-term stability. The TLC tracks the change in cost for the essential goods and services needed to maintain a basic standard of living, including housing, medical care, transportation, food, childcare, technology, and miscellaneous (e.g. clothing, personal care, and household items).

The MQL expands on the TLC to include the costs necessary for well-being, growth, and upward mobility, such as education savings, modest leisure, and other quality-of-life expenditures. Because these indices emphasize the expenses that weigh most heavily on working families, they often show stronger and more sustained cost pressures than headline inflation measures.

While the CPI has risen 77.2% from 2001 to 2024, the TLC has increased 106% and the MQL 108.1% over the same period. On an annual basis, both the TLC and MQL have grown at an average rate of 3.2% since 2001, compared to 2.5% for the CPI. Between 2019 and 2024 alone, the TLC increased 31.3%, averaging 5.6% annually, and the MQL increased 30.9%, or 5.5% annually.

The 2024 increase in the TLC was driven primarily by a 10.6% increase in housing and a 7.7% increase in childcare—the largest annual increase in childcare on record and the second-largest increase in housing since 2001. Grocery costs rose 2.9% in 2024, while medical costs increased 1.2% and transportation costs rose 1.3%. Although medical cost growth slowed significantly from 2023, healthcare remains the fastest-rising expense over the long term, increasing at an average annual rate of 4.9% since 2001.

“The pace of inflation has eased, but the affordability challenge hasn’t,” said LISEP Chairman Gene Ludwig. “After back-to-back years of sharp increases, the cost of essentials continues to rise faster than wages. And the gap between headline inflation and the real cost of living remains significant, especially for low- and middle-income Americans with little margin for error.”

The MQL, which expands beyond basic necessities to include the costs associated with well-being, opportunity, and long-term mobility, also rose 4.4% in 2024. The annual cost of maintaining a minimal quality of life now stands at $47,100 for a single adult; $121,100 for a couple with two children. In addition to the essentials tracked in the TLC, cost drivers within the MQL include: college savings (up 3.6%), eating out (up 7.1%), television subscriptions (up 12.7%), and weekend leisure (up 6.7%).

“Headline inflation numbers don’t fully capture what families experience,” Ludwig said. “When housing and childcare rise at double-digit or near-double-digit rates, those increases compound quickly. Slower inflation doesn’t undo the cumulative pressure households have absorbed over the past several years.”

About TLC
In announcing the debut of the True Living Cost (TLC) metric in March 2022, LISEP issued the white paper “Determining More Accurate Living Cost for Median- and Lower-Income American Families” (updated June 2024). TLC assesses a set of minimal adequate needs that a household requires to function: housing, medical care, transportation, food, childcare, technology, and miscellaneous (e.g. clothing, personal care, and household items) that takes into account household size (the eight household sizes range from one to two adults and zero to three children) and the relevant census region (Northeast, Midwest, South, and West). The TLC tracks the change in price for these needs over time. By contrast, the CPI focuses on a diverse basket of more than 80,000 items that are less representative of the day-to-day household costs of LMI Americans.

About MQL
The Minimal Quality of Life (MQL) Index is a comprehensive cost-of-living measure tracking the cost of economic well-being. The MQL goes beyond traditional cost-of-living measures that have been focused principally on survival by tracking both essential expenses and those necessary for well-being, growth, and upward mobility. The MQL reveals how rising costs have drastically outpaced wage growth, making economic security increasingly unattainable for many Americans. The MQL and supporting data, including white paper and methodology, are available on the LISEP website at https://www.lisep.org/mql.

About LISEP
The Ludwig Institute for Shared Economic Prosperity (LISEP) was created in 2019 by Ludwig and his wife, Dr. Carol Ludwig. The mission of LISEP is to improve the economic well-being of middle- and lower-income Americans through research and education. LISEP’s original economic research includes new indicators for unemployment, earnings, and cost of living. These metrics aim to provide policymakers and the public with a more transparent view of the economic situation of all Americans, particularly low- and middle-income households, compared with misleading headline statistics. On X: @LISEP_org.

About Gene Ludwig
In addition to his role as LISEP chair, Gene Ludwig is a managing partner of Canapi LLC, a financial technology venture fund. He is the founder and CEO of Ludwig Advisors, which counsels financial firms on critical matters. Ludwig is also the founder of the Promontory family of companies. He is the former vice chairman and senior control officer of Bankers Trust New York Corp. and served as the U.S. Comptroller of the Currency from 1993 to 1998. He is also author of the book The Vanishing American Dream, which investigates the economic challenges facing low- and middle-income Americans. His new book, The Mismeasurement of America, was published September 2025 and is now available online or wherever books are sold. On X: @geneludwig.

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SOURCE Ludwig Institute for Shared Economic Prosperity