A viral claim states that $140,000 is now considered the poverty line. Let's break down the numbers.

A Wall Street strategist recently sparked widespread discussion with a blog post proposing a dramatic shift in defining poverty for a typical American family of four: an annual income of $140,000. For context, the official Federal Poverty Level for a family of this size is $32,150, while the median household income in 2024 was $83,730.

The post, published on November 23 by Michael Green, chief strategist and portfolio manager at Simplify Asset Management, challenges conventional notions of middle-class financial security. Green argues that households earning around $80,000, often considered comfortably middle class, may struggle to cover fundamental expenses.

While $80,000 might seem adequate, factoring in the real costs of housing, childcare, healthcare, and other necessities in 2025 shows this family is far from secure, Green wrote.

To illustrate, Green constructed a Basic Needs budget for a family of four with two working adults and two children. After accounting for taxes, the total income needed approaches $140,000a figure Green claims is required simply to survive without financial strain.

Not surprisingly, the claim drew strong criticism. Economist and blogger Noah Smith described it as completely disconnected from reality, while Scott Winship, a senior fellow at the American Enterprise Institute, called it the worst poverty analysis he has seen. Critics highlight that such a high poverty line exceeds the median income and does not reflect widespread access to food, shelter, transportation, and healthcare.

Specific aspects of Greens calculations, such as a $30,000 estimate for childcare, were also questioned. Winship noted that only a fraction of families with young children actually pay for center-based care, and even fewer with older children do so. He emphasized that poverty traditionally implies lacking essential resources, not merely having to make difficult budgetary choices.

Green clarifies that his argument is about precarity rather than absolute poverty. Families earning $80,000 might avoid starvation but face significant financial pressures, including skipping medical care, relying on low-quality food, or one parent leaving the workforce due to childcare costs.

Greens analysis aligns with efforts by think tanks and financial experts to calculate realistic living costs. For instance, the Economic Policy Institutes Family Budget Calculator estimates that a family of four in Essex County, New Jersey, requires roughly $123,000 annually for a modest, adequate standard of living.

Investopedia offers similar calculations for emergency savings and long-term financial goals, noting that current poverty metrics fail to capture the true costs of modern life. Caleb Silver, editor-in-chief of Investopedia, remarked that inflation and rising living expenses mean the official poverty line underestimates household needs.

Green emphasizes that Americas middle class faces growing financial vulnerability amid rising income inequality. He proposes progressive taxation as a solution, shifting more of the tax burden to the wealthiest households and corporations while easing pressures on the rest.

Interestingly, Green supported Donald Trump in the 2024 election, despite advocating policies typically associated with reducing inequality. He notes that much criticism of his viral post comes from those invested in maintaining the current system, uneasy with a six-figure poverty threshold.

Green plans to continue discussing solutions to support Americas middle class in future posts, stressing that the real question is whether the middle class is thriving, not merely existing.

Author: Sophia Brooks