Is the Real Poverty Line $140,000?

Last week, a comment from Simplify Asset Management Chief Strategist Michael Green blew up across financial Twitter: He argued that the real poverty line in America isn’t $32,150 for a family of four, but closer to $140,000.¹
This number exposed a quiet truth about American life; our economic metrics haven’t kept up with economic reality.

Below we review where the poverty line actually comes from, why Green says it’s wrong, and why so many six-figure earners still feel like they’re drowning.

Where the Poverty Line Came From (and Why It’s Broken)

The U.S. poverty line was created in 1965 during Lyndon Johnson’s “War on Poverty.”² Back then, the calculation was fairly simple:

• Determine the cost of feeding a household for one year
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• Multiply that by three
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• Compare that number to your annual income
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That’s it. The government essentially decided that food represented one-third of a family’s budget, and built a national economic benchmark around a grocery bill.

But now It’s 2025, and food is no longer the only thing crushing American households.

Healthcare is. Childcare is. Housing is. Insurance is. College tuition is.

Yet our official poverty measure still rests on a 60-year-old assumption about the cost of food (which also, is really high).

Green’s Claim is that Poverty Isn’t About Food, It’s About Feeling Financially Safe

Michael Green argues that the official metric is so outdated that it borders on useless.³

Here’s his math in plain English:

• Food is no longer the big share of household spending
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• Essential expenses include housing, healthcare, childcare and insurance. These costs have all skyrocketed.
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• When he re-weights the poverty formula to reflect modern necessities instead of 1960s necessities, the poverty line jumps from $32,150 to roughly $136,500–$140,000 for a household of four
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His point is not that families earning $140K are literally “in poverty”, but that below this level, families often cannot fully participate in the economy the way policymakers and corporations assume they can.

Participation means:

• Affording predictable housing
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• Accessing healthcare
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• Covering childcare
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• Saving for emergencies
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• Saving for retirement
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• Keeping up with rising costs of education and transportation
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Many households under $140K cannot meet all those needs at the same time, and that’s why the argument resonated.

The Backlash is that “Most Americans Aren’t Actually Poor”

Economist Noah Smith called Green’s recalculation “very silly,” arguing that:⁴

• Most families earning under $140K are not living in conditions anyone would call poverty
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• Green is blending subjective lifestyle standards with objective poverty measures
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• Poverty metrics should not be a proxy for “financial comfort” or “middle-class frustration”
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And he’s right: earning less than $140K is not the same as being impoverished.

But that’s not the point.

Green’s point, and why so many people nodded along, is that the official poverty line fails to reflect economic pressure in modern America. You can be far above the poverty line and still feel financially fragile, stretched, or one emergency away from real trouble.

Why This Debate Hit a Nerve

Officially, only about 10% of Americans live below the poverty line.⁵
But a recent Harris Poll found that one-third of Americans making six figures feel financially stretched and 47% of Millennials earning $100K+ live paycheck to paycheck.⁶

Meanwhile:

• Median household income for a family with two kids is $109,300⁷
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• National average cost of childcare for two kids is $22,000–$30,000+⁸
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• Average cost of employer-sponsored family health insurance premiums is $24,000⁹
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• Median home price is over $400,000¹⁰
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• Rent affordability is at a 40-year low¹¹
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When you line up the numbers, it becomes clear that the poverty line doesn’t measure modern financial strain. It measures a 1960s version of scarcity. Millions of Americans are technically “not poor,” yet feel financially stuck.

The Real Question Isn’t “What Is Poverty?” It’s “What does it take to feel financially safe in America today”? And for many families, the answer is much higher than the official number.

How much do you think it takes for a family of 4 to feel comfortable in our economy? Feel free to send me your answers, I read every email.

Best,

Roxana

Footnotes

1. Washington Post — coverage of Michael Green’s argument
   ​ https://www.washingtonpost.com/business/2025/11/29/poverty-line-green/​
2. U.S. Census Bureau — historical basis of the federal poverty threshold
   ​ https://www.census.gov/library/publications/2025/demo/p60-287.html​
3. Michael W. Green — “Part 1: My Life Is a Lie”
   ​ https://www.yesigiveafig.com/p/part-1-my-life-is-a-lie​
4. Noah Smith — critique of the “$140,000 poverty line”
   ​ https://www.noahpinion.blog/p/the-140000-poverty-line-is-very-silly​
5. U.S. Census Bureau — official poverty rate
   ​ https://www.census.gov/library/publications/2025/demo/p60-287.html​
6. MarketWatch — six-figure earners feeling financially stretched (Harris Poll data)
   ​https://www.marketwatch.com/story/why-the-real-poverty-line-is-140-000-this-strategist-argues-f459ed96​
7. U.S. Census Bureau — median household income data
   ​ https://www.census.gov/library/publications/2025/demo/p60-287.html​
8. Economic Policy Institute — national childcare cost estimates
   ​ https://www.epi.org/child-care-costs-in-the-united-states/​
9. KFF (Kaiser Family Foundation) — employer-sponsored family health premium data
   ​ https://www.kff.org/report-section/ehbs-2024-summary-of-findings/​
10. Federal Reserve Economic Data (FRED) — median home price
    ​ https://fred.stlouisfed.org/series/MSPUS​
11. Moody’s Analytics — rent affordability analysis
    https://www.moodysanalytics.com/articles/2024/us-rent-affordability-2024