Most people in the US live paycheck to paycheck as is, and it's not that they're spending frivolously. Our standards of living are based on what's needed for subsistence, yes, but also cultural and historical. Based on how we grew up and how our parents grew up, and how culture (e.g. hollywood) tells us we should be living. So most people are trying to live according to established standards.
It's already much harder for the present generation to live at the standard of the previous generation or two (e.g. buying a home is less of a possibility). Choosing, then, according to our "freedom", 20% less pay would require also choosing poverty according to established standards of living (i.e. it would look like poverty).
The narrative of "the individual" is a nice narrative from the perspective of the elites of our society to distract from the fact that, as always, there is class conflict and systematic forces in place. Of course, don't get me wrong: it is nice that there is some legitimate freedom on an individual level in the US. But for one, that legitimacy is overblown via mass media marketing (e.g. of course Jeff Bezos is going to tell his rags-to-riches story for everyone to hear). And more importantly, there is also the question of the overall structural forces that establish the population level structure.