48% jump in living costs, just 17% more pay: These nations show the squeeze

Living costs rose nearly 48% in Greece and more than 50% in Ireland between 2020 and 2025, outpacing wage growth and eroding workers’ purchasing power, according to a new study by trading firm Atmos.

A bigger salary is no guarantee of a better standard of living. In Greece, average wages rose 17.1% between 2020 and 2025, but the cost of everyday life increased 47.6%. In Ireland, the gap was even more striking: living costs climbed 50.7%, against wage growth of 23.4%.

These countries top a list of 10 economies where rising living costs have outpaced pay increases, according to a November 2026 study by Atmos. The research compares changes in average annual wages with per-person living costs over five years to assess where workers have lost the most purchasing power.

Greece recorded the widest gap between wage growth and living-cost inflation, at 30.5 percentage points. The average annual wage increased from €16,100 in 2020 to €18,800 in 2025. But annual living costs per person rose from €11,000 to €16,200. According to the study, a paycheck now covers 20.7% less of living costs than it did in 2020.

Ireland ranked second, with a 27.3-percentage-point gap. Average annual wages rose from €51,300 to €63,400, but living costs per person increased from €18,400 to €27,700. The study estimates that wage coverage of living costs declined 18.1%.

The United States ranked third. Average annual wages increased 23.8%, from $70,200 in 2020 to $87,000 in 2025. Living costs, however, rose 43.6%, from $41,400 to $59,500. In absolute terms, annual living costs increased by about $18,100 per person, exceeding the $16,800 increase in average wages.

The Netherlands and Italy completed the top five. In the Netherlands, wages rose 23.6%, while living costs increased 40.4%. In Italy, the corresponding increases were 19.6% and 36.2%.

Here’s a look at the top 10 countries where wages have fallen furthest behind living costs:

Key points:

Yearly living costs for the average American climbed 44% in five years, nearly twice as fast as the 24% rise in pay.
Wages in Poland and Lithuania rose by about 65%, but prices kept pace, leaving workers roughly where they started five years ago.
Denmark is the only country in Europe where pay grew faster than costs, but still by a tiny 1% margin.

The research examined countries around the world to find where pay has fallen furthest behind the cost of living. It compared average yearly wages in 2020 and today with how much households spend per person on everyday goods over the same period. The report then calculated how much each of those amounts grew and measured the difference between the two. Countries were ranked by how far wage growth trailed behind the rise in living costs, revealing where paychecks have lost the most buying power.

The squeeze is not limited to countries where wage growth has been particularly weak. Spain, for example, recorded a 26.7% increase in wages, but living costs rose 41.2%. In the United Kingdom, wages grew 28.5%, compared with a 41.7% increase in living costs.

Canada and Australia also feature in the ranking. Canadian wages rose 18.5%, while living costs increased 31.2%. In Australia, wages grew 20.4%, against a 32.6% increase in living costs.

Denmark was the only European country in the study where wage growth exceeded the rise in living costs, and then by just one percentage point, according to Atmos.

Why lower inflation does not mean lower bills

The findings underline a distinction that often gets lost in discussions about inflation: a slowdown in price increases does not mean that prices have fallen.

Nick Cooke, chief executive officer of Atmos, said the inflation surge of 2022 had left a lasting impact on household budgets.

“Inflation peaked in 2022. It hit 9.1% in the US in June and 10.6% in the eurozone in October. Since then, price growth has cooled, and many people think that means costs are coming back down. They are not,” Cooke said.

When inflation falls, prices generally continue to rise, but at a slower rate. The higher price levels reached during the inflation surge remain part of household budgets. Wage increases, meanwhile, often arrive in smaller increments, making it difficult for workers to recover lost purchasing power quickly.

“Wages, on the other hand, usually rise in small steps once a year. So workers spend years trying to catch up with a price jump that took only a few months,” Cooke said.

For households, the implications go beyond the monthly grocery or utility bill. When a larger share of income goes towards essential expenses, less may be left for discretionary purchases, emergency savings and long-term investments.

1. Greece

Wage growth: 17.1%
Cost of living growth: 47.6%
Average yearly wage: €16.1K in 2020 to €18.8K in 2025
Living costs per person: €11K in 2020 to €16.2K in 2025
Pay vs. living costs: a paycheck covers 20.7% less than in 2020

Greece is where paychecks have lost the most ground to rising prices. The average yearly wage grew from €16.1K to €18.8K over five years, a raise of 17%. In that same stretch, what a person spends on everyday living went from €11K to €16.2K, an increase of almost 48%. That means prices rose nearly three times as fast as pay. Greek workers now find that their wages cover about a fifth less of daily life than they did in 2020.

2. Ireland

Ireland is another EU country where prices outpaced wages. Living costs per person here went from €18.4K to €27.7K, a rise of more than 50% and the steepest in the top five. Irish workers did get bigger paychecks, with the average wage moving from €51.3K to €63.4K, but a raise of 23% could not keep up with costs growing more than twice as fast. Even with an average wage above €63K, pay now covers nearly a fifth less of daily spending than in 2020.

3. The US

The United States takes third place, with prices growing nearly twice as fast as pay. The average yearly wage went from $70.2K in 2020 to $87K in 2025, up 24%. Living costs per person rose 44% in that time, from $41.4K to $59.5K. In dollar terms, that is an extra $18K a year to cover everyday spending, more than the $16.7K added to the average paycheck.

4. The Netherlands

The Netherlands comes next on the list. Dutch pay grew 24%, from €49.8K to €61.5K, about the same pace as in the US. However, living costs also rose 40% over those years and reached €27.5K per person. As a result, a typical Dutch paycheck now covers about 12% less of everyday life than it did a couple of years ago.

5. Italy

Italy rounds out the top five countries where living costs are growing too fast. Pay moved the slowest of the five after Greece, rising about 20%, from €29.1K to €34.7K. But in the meantime, living costs per person went from €16.1K to €22K, up 36%. With that, wages in Italy now cover about 12% less of those costs than they did in 2020.