The Chief Economic Correspondent for The New York Times, Ben Casselman, recently posted a video piece on the economic condition of the average American worker over the past few years (2024-25), where we saw “slowing inflation and relatively solid wage growth.” However, he notes a recent reversal. Inflation has been increasing more than wages, meaning that on average, “Americans are losing ground.”
Casselman finds pay is not keeping up with rising prices in general, and within the group losing ground, low-wage workers are falling behind more quickly than others – their wage growth is slower than any other group. For some in North Carolina communities, life may be becoming less affordable, and the shift could be important to CED professionals in the short term.
The concern is in part because, as reported by NBC News in early January 2026, rising prices are primarily being seen across basic needs, rather than across (or in addition to) discretionary household items, such as the optional vacation or a dinner out. Households are seeing the impact of rising prices across goods that must be purchased – they are the basic goods everyone needs just to get by. In this post, we focus on increases in the costs of four basic needs: food, water and wastewater, housing and transportation.
In terms of food, the journal Consumer Affairs Research reports North Carolina has seen less increase in the cost of food for home consumption than in other states, closer to 3% than the over 6% increase in food costs being experienced in the Midwest, but still a significant single-year increase. In terms of water, market researcher Bluefield Research released data showing water and sewer rates hit a five-year high in 2025 nationally, growing over 24% cumulatively over the prior five years. According to the North Carolina 2025 Water and Wastewater Rates Survey Report, while less than ½ of rate structures increased prices, the median increase for those that did for water was over 7%, and over 8% for wastewater.
What about housing, which dominates the affordability discussion these days? To understand the trends in housing affordability across the state, one can review the excellent report by Scott Adams and Kyle Henson of the Kenan Institute of Private Enterprise at UNC-Chapel Hill’s Kenan-Flagler Business School released in January 2026, and their subsequent commentary published March 19, 2026. In the first report, the researchers developed a specialized index to measure housing affordability incorporating the price of homes, mortgage rates and household income. The researchers stated, “Among the most striking findings from the index is that housing affordability has deteriorated in every county in North Carolina over the past five years.”
While that statement seems discouraging, at the time the initial report was released national data trends still reflected the overall positive tone from 2025 mentioned at the beginning of this blog post – rising wages and slowing inflation. Unfortunately, the authors could not incorporate the reversal we have seen since then, mentioned above – rising inflation and slower wage growth – along with rising home prices and elevated interest rates in the post-pandemic era discussed in their more recent commentary.
Finally, while not as visible as the others, having access to transportation is a basic need for every household, whether that reflects the need to get to work, school, grocery store or doctor’s appointment via a car, bus or bike. In a related vein, we’ve seen how affordable fuel, in the form of fertilizer, represents a basic need for farmers across the state as well. In that regard, The Wall Street Journal reported data from the American Farm Bureau last week that the American South, including North Carolina, is in the worst position in the country in terms of rising costs. It is estimated 78% of farmers in that region cannot afford current fertilizer expenses.
Basic needs are often discussed as separate issues. CED professionals should be aware that an important issue in their community may be the limited options available for those just maintaining the overall basic needs for their households. A cost increase in any of the individual items means strain on affording one of the other basic needs. Long-term planning and investment, especially for lower wage workers, is affected. Making ends meet may lie in a household’s overall ability to pivot resources if, when and where they are needed on short notice, stretching the household safety net as far as it can go.