Is $140,000 really the new poverty line in America?

Economic IndicatorsIs $140,000 really the new poverty line in America?A viral claim that the poverty line should be $140,000 has ignited a fierce debate about what it really costs to raise a familyByCatherine BaabPublished 23 hours ago|Updated 1 hour agoShare to XShare to FacebookShare to RedditShare to EmailShare to LinkSpencer Platt/Getty ImagesLate last month, a long Substack essay from financial strategist Michael Green exploded across the internet with a simple, inflammatory claim: The real poverty line for a family of four isn’t $31,200. It’s $140,000.The argument landed like a thunderclap because it captured a widespread feeling, with millions of Americans saying that they make “good money” and yet never seem to get ahead.Blowing up the old standardGreen’s post walked through the history of the federal poverty threshold, originally set in 1963 by economist Mollie Orshansky. At that time, the federal government simply calculated a “minimum food diet” and tripled it, because food took up roughly one-third of a household budget.Today, however, food makes up only 5% to 7% of spending, Green argued, while other major line items in household budgets are now much more expensive. “Housing costs exploded,” Green wrote. “Healthcare became the largest household expense for many families. Employer coverage shrank while deductibles grew. Childcare became a market, and that market became ruinously expensive. College went from affordable to crippling. Transportation costs rose as cities sprawled and public transit withered under government neglect.” If you updated Orshansky’s logic to reflect current spending patterns, Green went on to say, the multiplier wouldn’t be three—it would be sixteen. Hence Green’s analysis, that a modern family of four needs roughly $140,000 to avoid what Orshansky defined as “crisis,” has now gone viral. Green’s post further explained why a two-earner household may still feel underwater. Childcare alone can cost over $30,000 in some states. A second income is helpful, arguably necessary, and yet can mean the cost of a second car and higher taxes — all of which creates what he calls the “Valley of Death,” with families losing advantages faster than their wages rise. In such a scenario, he said, a family earning $100,000 becomes merely “the new poor.”In short, Green concluded, America’s middle class isn’t imagining the affordability crisis. The math just doesn’t work. Why the post struck a nerveGreen’s argument not only went viral on Substack, but garnered coverage in Fortune, and many other outlets, even drawing reactions from influential think tanks. Meanwhile, across Reddit and X, many six-figure earners admitted that Green’s bleak math spoke to them, too. Of course, Green’s argument has also drawn rebuttals — swift and detailed, blunt and brutal. Researchers from the right-leaning American Enterprise Institute and the Cato Institute rather predictably argued that Green’s calculations overstate economic hardship.First, they argue, he uses the wrong median income. Green’s baseline — an $80,000 “typical” household — includes retirees and single adults. For households like the one he describes (a married couple with children), the median income is closer to $133,000. Second, critics say Green cherry-picked costs from one of the most expensive counties in America, using Essex County, N.J. When economists swapped in what they say is a more representative metro area like Lynchburg, Virginia, Green’s cost estimate dropped from $140,000 to around $94,000. That’s still a substantial figure, but nowhere near Green’s new “poverty line.”The same critics also argue that, in many U.S. metros childcare runs closer to $12,000 per year — yet that’s only the cost of one child, not two, and still skews lower than many estimates. Their idea that children, after the age of five, don’t need care also ignores the necessity and cost of after-school care and full-time summer care. “As any parent can tell you, childcare expenses shrink to nothing as kids get older,” wrote critic Scott Lincicome of the Cato Institute. Except that’s not quite accurate either. Parents don’t stop spending once a kid can stay home alone; the spending simply moves to categories that economists don’t call “childcare” but functionally serve the same role, from tutoring to extracurriculars and college applications. Anecdotally, many parents report spending more on teenagers than on very young children. Data from BLS’s Consumer Expenditure Survey shows that total spending per child rises — rather than falling — during the teen years.The same critics further argue that smartphones and home internet are more conveniences than necessities; they do this even as Green notes that a smartphone is needed to verify logins to banks and other services, and that home internet is required to check online-only school portals, not to mention answer work email. Other critics argue that Green ignores household wealth, especially home equity, which families can and do tap or convert by moving. Still, while having home equity may raise a family’s net worth, it does nothing to reduce the monthly carrying costs that define family’s lived economic reality. Wealth stored in houses does not help families pay their housing costs.Even Green’s harshest critics admit he exposed something importantMIT’s Living Wage Calculator and the Economic Policy Institute both show that a genuinely comfortable lifestyle for a family of four can easily top $100,000 in many states. And a recent Harris Poll found that 64% of Americans earning six figures say their income merely keeps them afloat. The virality of Green’s post itself suggests that traditional economic indicators don’t fully reflect how financially strained many American families feel.So is $140,000 the new poverty line? Perhaps not by any widely accepted definition. But Green has tapped into something politicians and economists often miss — the lived experience of precarity. A far wider swath of Americans express economic unease than meet the technical standard of living in poverty. In a time when the price of daycare, car payments, and smartphone plans — not the price of milk and Kraft Mac & Cheese — defines financial stress, the real argument is how much it costs just to participate, not to eat. 📬 Sign up for the Daily BriefOur free, fast and fun briefing on the global economy, delivered every weekday morning.Sign me upMan who hired girlfriend as his maid to extend her stay in Singapore gets jailCNA | SponsoredSponsoredRead MoreUndoKarawal Nagar – This AI-Powered hearing aid is a hit in India. Know why.Recommended by audiologistHear.com | SponsoredSponsoredLearn MoreUndoThe cost of hearing aids in Karawal Nagar might surprise youRecommended by audiologistHear.com | SponsoredSponsoredLearn MoreUndoStart Forex Trading. Get a 100% Welcome BonusFind out why you should join iFOREX, a regulated broker with over 25 years of experience. Open your iFOREX account and enjoy a 100% Welcome Bonus. Sign up today!iFOREX | SponsoredSponsoredSign UpUndoOption Trading: Mr.

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