America’s “Windchill Economy”: Why Voters Feel Worse Off Despite Rising Wages

Across the United States, public frustration with the economy remains one of the most influential political forces shaping voter sentiment. Poll after poll shows Americans overwhelmingly convinced that their financial situation is deteriorating—even as national economic data suggests a different reality. Economists are calling this disconnect the “windchill economy”: conditions feel much colder than they actually are.

On paper, most workers have been gaining ground. Since mid-2023, wage growth has consistently outpaced inflation, ending two years of pandemic-era financial erosion. By April 2025, average pay was rising by more than 4% year-over-year while consumer prices rose just over 2%. Yet despite these improvements, Americans broadly report that their money doesn’t stretch as far as it used to.

Part of this tension is political. Economic experiences and economic perceptions rarely move in sync, especially during an election cycle. As inflation began rising again over recent months and wage growth slowed, many households sensed that the fragile gains of the past year were slipping away. Median income growth has cooled to decade-low levels when adjusted for inflation, reinforcing the belief that progress is stalling.

The pandemic plays an even larger role in shaping attitudes. For a brief moment in 2020 and 2021, millions of Americans enjoyed unprecedented financial stability—boosted by stimulus payments, enhanced unemployment benefits, and steep reductions in travel and entertainment spending. Savings rose rapidly, and wage growth far surpassed inflation. For many, that fleeting sense of security reset expectations for what financial normalcy should feel like.

When inflation surged to a four-decade high in 2022, those expectations were shattered. Home prices soared, mortgage rates jumped, and affordable housing became scarce. The rapid decline in purchasing power hit hardest at a time when Americans believed they had finally achieved some footing. The result was a deep psychological shift: a feeling that the economic ladder had been pulled away just as they reached for it.

One of the biggest drivers of dissatisfaction is the rising cost of essentials. While overall inflation has cooled, the categories Americans can’t avoid—food, childcare, rent, electricity—have climbed at a much faster pace. Since 2020, wages have risen roughly 29%, but electricity costs are up nearly 40%, and home prices have surged more than 50%. Families can cut back on vacations or holiday spending, but they cannot escape the grocery store or utility bills. This disparity fuels the belief that economic progress is an illusion.

Income divides deepen the disconnect. Wealthier households with money in the stock market and rising home equity are gaining significant security. Meanwhile, many lower-income families are living paycheck to paycheck. Bank data shows paychecks for high-income households rising faster than inflation, while wages for lower-income groups lag behind. Retail patterns mirror the split: bargain-focused stores like Walmart and Costco are thriving as households stretch budgets further.

The “windchill economy,” then, is less about misleading data and more about lived experience. Political leaders face a challenging task: convincing Americans that the economy is improving when the improvements are uneven, essentials remain expensive, and the psychological scars of the inflation crisis remain fresh.