Harriet Bradley had decades of full-time work under her belt when she was laid off from her job as a customer service representative at a paper company in 2003.



Bradley, who lives in Atlanta, Ga., signed up with a temp agency but had little luck finding work. When it was clear that job opportunities had dried up there, she began working part-time as a caregiver. The pay wasn’t great — at $7.25 an hour, she was earning $2 more than the state’s minimum wage — but it would be enough to cover her $600/month rent.



That was nine years ago. Since Bradley took up work as a caregiver, she’s asked for and received only one raise — a $2/hour bump, which she requested to help her cover her bus fare to and from work each day.



Meanwhile, like the rest of Americans, her expenses have quickly outpaced her earnings. A few years ago, her rent was raised from $600 to $660 per month. The $15 per week she spent taking the bus to and from work each day nearly doubled when fares were raised, bringing her weekly commuting cost up to $27.50. After cashing her most recent paycheck and paying her bills, Bradley had $4 left.



“I can definitely tell the difference,” she says. “You make the same money but you pay more. Food goes up. Everything goes up. But pay doesn’t go up.”



Bradley’s story is echoed across the country. Despite a much improved unemployment rate (now at a 4-year low at 5.8%), lagging wage growth has left a huge chunk of American households feeling as if the economy is as stifled as ever.



Between 1979 and 2013, median hourly wages for Americans rose just 6.1% (0.2% annually) and the lowest-paid workers (the bottom 10%) actually saw their earnings decline by 5.3%, according to the Economic Policy Institute. As such, household earnings have barely kept pace with the rising cost of fixed expenses — the roofs over our heads, the cars in our driveways, and the food on our dinner tables.



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Meanwhile, fixed costs have been on a tear. The cost of health care has more than doubled for American families in the last decade, rising from $11,192 a year in 2004 to $23,215 in 2014. Gas costs more than twice as much today as it did a decade ago. Higher education has become so expensive that the value of college has been thrown into question. College students paid just shy of $7,000 for a four-year college degree in 1981. Today the average degree costs nearly $17,000.



And when their paychecks became too small to cover their expenses, Americans overwhelming turned to debt to fill in the gap. According to the Federal Reserve, the average American household has more than $15,000 worth of credit debt and $32,000 in student loan debt.

The Great Recession threw wage stagnation into sharp relief, and made the ever-widening income gap a societal theme. Headline-grabbing movements like Occupy Wall Street have died down, but in their place, rallies for minimum wage increases have kept dialogue around wage stagnation from fizzling.



“There’s this American idea that you’re not getting ahead and it’s your own fault, but people are now understanding that individuals and families are part of a much larger trend of wage stagnation and growing inequality,” says Elyse Gould, senior economist and director of health policy research at the Economic Policy Institute.



In Gould’s latest study on wage stagnation, she found that increasing minimum wage at the state level has had an undeniably positive impact on the lowest earning households in the U.S. Between the first half of 2013 and the first half of 2014 — in the 13 states that passed minimum-wage increases — wages for the lowest-earning 10% of households grew by 0.9%, while they fell 0.1% in states without a minimum-wage increase. And while wages for all other households fell across both sets of states, the 10th percentile in states with minimum-wage increases was the only group where real wages actually increased, the report states.



Marcio Silveira, a certified financial planner in Arlington, Va., is often tasked with helping his clients figure out how to stretch their earnings to cover higher expenses. For older households — those led by adults who managed to rack up large amounts of debt in order to meet their financial needs — the first step is basic: get out of a debt as quickly as possible and start saving. If it’s possible, he recommends finding room in your budget to do both at once.



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