By Paul K. Sonn
October 30, 2026
As the 2026 midterm elections reach their fever pitch, the political discourse in Washington has been almost exclusively dominated by the "affordability crisis." Families across the United States are currently navigating a brutal financial landscape, squeezed between the relentless upward pressure of living costs and the stagnation of household income. From the grocery store checkout line to the monthly utility bill, the purchasing power of the average American is evaporating, leaving policymakers and organizers to scramble for a "lifeline" agenda.
However, a critical examination of the current economic debate reveals a glaring, systemic omission. While the discourse has successfully centered on the need to lower the costs of gas, childcare, healthcare, and consumer goods, it has conspicuously ignored the other side of the affordability equation: the stagnating wages of U.S. workers. Without a concerted effort to raise earnings, any progress made on cost-reduction will be nothing more than a temporary bandage on a structural wound.
The Economic Squeeze: A Multi-Front Assault
The current financial strain facing American households is not the result of a single policy failure, but rather a perfect storm of macroeconomic pressures. The ongoing conflict in Iran has disrupted global supply chains, driving up energy costs and fueling inflationary pressures that ripple through the entire domestic economy. Simultaneously, the protectionist tariff policies enacted by the Trump administration have acted as an additional tax on consumption, forcing retailers to pass rising costs onto consumers.
Coupled with high interest rates, which have made financing for homes, cars, and small businesses prohibitively expensive, these factors have collectively increased the annual cost of living for the typical U.S. household by thousands of dollars. According to recent economic indicators, the result is an "extreme cost squeeze" that has made affordability the defining issue of the midterms. Yet, despite the intensity of this debate, the conversation has remained focused almost entirely on the supply side—the price of goods—while failing to address the fundamental erosion of labor value.
The Shrinking Worker’s Share
The silence on wages is particularly alarming when viewed against the backdrop of historical data. While prices for essential goods have spiraled upward, the wages of U.S. workers have failed to keep pace. The disconnect between productivity and pay has reached a critical juncture; an ever-increasing share of corporate revenue is being diverted to executive compensation and shareholder dividends, while the labor share of national income has plummeted.
Recent reports indicate that workers’ share of corporate profits has hit a record low of barely 50%. This shift represents a massive redistribution of wealth from the working class to the capital-owning class. When the share of income flowing to labor shrinks while the cost of basic survival rises, the result is a systemic decline in the standard of living for millions of American families. Paychecks are buying less every month, forcing households to choose between essential services, deplete their savings, or take on unsustainable levels of high-interest debt.
The Trump Administration’s Anti-Worker Agenda
The situation has been significantly exacerbated by the regulatory stance of the current administration. The Department of Labor (DOL), under the Trump administration, has moved aggressively to dismantle decades of worker protections, effectively tilting the playing field in favor of employers at the expense of those who perform the labor.
The Independent Contractor Rule
A cornerstone of this erosion is the rollback of the DOL’s independent contractor rule. By making it easier for employers to misclassify their employees as independent contractors, the administration has stripped workers of essential rights, including minimum wage guarantees, paid sick leave, unemployment insurance, and workers’ compensation.
A landmark report by the National Employment Law Project (NELP) and the 75 Million Project, titled How Misclassification Shortchanges Women Workers, reveals the devastating human cost of this policy. The study found that misclassification costs women workers an average of $10,000 annually. Furthermore, immigrant women are disproportionately concentrated in industries where the threat of misclassification is most acute, creating a two-tiered labor system that exploits the most vulnerable.
Watering Down "Joint Employer" Standards
The administration’s efforts to weaken the "joint employer" rule represent another direct attack on wage security. By making it increasingly difficult for subcontracted workers to hold parent companies accountable for labor violations, the administration has created a loophole for wage theft. This policy allows major corporations to outsource labor to low-road contractors that frequently cut corners and engage in exploitative practices. When these contractors fail to pay earned wages, the parent company—the entity that actually benefits from the labor—remains insulated from legal liability, leaving workers with little to no recourse.
The Attack on Homecare Workers
Perhaps the most egregious example of the current administration’s strategy is the attempt to strip homecare workers of minimum wage and overtime rights. Homecare workers are among the most essential and underpaid members of our workforce. Predominantly women of color, these professionals provide the critical, physically demanding care that allows our nation’s seniors and individuals with disabilities to live with dignity in their own homes.
The industry is already facing a severe labor shortage, a crisis that will only intensify if the administration succeeds in slashing pay. Recognizing this, NELP is launching a new initiative to lobby state legislatures and governors to bypass federal inaction and "lock in" these protections at the state level. Oregon has already set a successful precedent by passing such legislation this year, providing a roadmap for other states to follow in the face of federal indifference.
The Path Forward: A Call for Structural Reform
If policymakers are serious about addressing the affordability crisis, they must move beyond the narrow focus on consumer prices. A comprehensive solution requires a two-pronged approach: reducing the cost of living while simultaneously enacting a robust wage-growth agenda.
1. Raising the Federal Minimum Wage
The federal minimum wage has remained frozen at a stagnant $7.25 for seventeen years. This failure is a policy choice, not an economic inevitability. Congress must act immediately to raise the federal minimum wage to a level that reflects the reality of the 2026 economy, and, crucially, implement an automatic indexing mechanism to ensure that the wage keeps pace with inflation in the years to come.
2. Empowering Workers Through Labor Law Reform
Raising the minimum wage is only the floor, not the ceiling. The majority of workers earn more than the minimum wage but are still struggling to make ends meet in today’s economy. To lift these workers, we must address the systemic barriers to collective bargaining. Our broken labor law system needs a total overhaul to empower workers to organize, join unions, and engage in meaningful collective bargaining—historically the most effective tool for driving up wages and improving working conditions.
3. A Legislative Pivot in January
When the new Congress convenes in January, the fight for worker power must become a central priority. Lawmakers must move to push back against the administration’s unrelenting attacks on the workforce. This means throwing the weight of the federal government behind policies that increase the labor share of income, strengthen overtime protections, and hold corporations accountable for wage theft and illegal misclassification.
Conclusion
The affordability crisis is not merely a matter of high prices; it is a matter of wage suppression. For too long, the economic debate has treated the worker’s paycheck as an afterthought, focusing only on how much that paycheck buys rather than why the paycheck is so small in the first place.
As we look toward the future, the message is clear: workers need both lower prices and higher wages that more than keep pace with the cost of living. NELP and our allies remain committed to this holistic policy agenda. We invite policymakers to stop ignoring the other side of the equation and to finally champion an economy that works for the people who actually build it. It is time to stop the race to the bottom and start building a future where work is valued, protected, and properly compensated.
