How far your salary stretches depends on a variety of factors, such as where you live, the size of your family, and your individual tastes.
In the U.S., earning $20 or less an hour may be enough in some cities, but fall short of what’s needed in other areas. However, earning a modest salary doesn’t necessarily preclude you from having financial stability.
Many Americans Earn Less Than $20 an Hour
Here are four facts about earning $20 or less an hour in the U.S.
More than a third of Americans earn $20 an hour or less, which comes to roughly $41,600 annually.
An Economic Policy Institute analysis of Census data found that more than 50 million workers, or 35% of the working population, earn $20 or less.
$20 an Hour May Not Be Enough to Get By
In metropolitian cities like New York City, Boston, Los Angeles and San Francisco, $20 is well below what’s considered a living wage.
A living wage is defined as the amount of money a person needs to earn to cover essential expenses like food, housing, transportation, childcare, and more.
In metropolitian cities like New York City, Boston, Los Angeles and San Francisco, $20 is well below what’s considered a living wage.
The living wage for an individual with no children in New York City is $28.87, according to MIT’s Living Wage Calculator, which uses data on an individual’s typical expenses to calculate what a living wage is. For someone in San Francisco, it’s more than $30.
However, for people who live in cities with a lower cost of living—such as Mobile, Alabama, or Springfield, Ohio—earning about $20 an hour as an individual with no children is considered a living wage.
All States Have Minimum Wages Less Than $20
The federal minimum wage hasn’t changed from $7.25 per hour since 2009, but many states and cities have adopted higher minimum wage laws.
In states and locales where the minimum wage is higher than the federal minimum wage, employees are paid the higher amount.
Washington state has the country’s highest minimum wage: $17.13, effective at the start of this year.
Even on a Lower Salary, You Can Save
Taking small steps like building up an emergency fund and contributing a portion of your salary to a retirement account can make a big difference when it comes to your financial fitness.
A JPMorgan Chase study found that having cash savings can help stave off financial instability more so than having lots of discretionary income.
Researchers looked at low-income households making less than $49,000 annually and found that those with a greater proportion of their savings in cash were less likely to miss a payment than those without that.
So how much should you aim to save?
Experts generally advise saving three to six months’ worth of expenses. You can start low, aiming to save $1,000 by cutting out discretionary expenses like dining out, subscription services you don’t use, or excessive shopping—though this may be more challenging for people who have less disposable income.
Additionally, if you have access to a 401(k), you should consider taking advantage of it and contributing at least enough to receive your employer’s match if they offer one.
If you don’t have a 401(k), you could open a Roth IRA. In order to be eligible for a Roth account, a single filer must have an income of $168,000 or less in 2026.